Whether rooted in misconduct or a more amicable separation, the decision to terminate an employee can be a complex process that requires careful consideration and a whole lot of planning, say human resource and legal professionals.
Sarah Miller, a Calgary-based associate at JSS Barristers, has a civil litigation practice that focuses on employment, shareholder, constitutional and regulatory disputes. The first thing she encourages an employer to do when considering an employee termination is to determine whether there’s cause or not – in other words, are they being let go for workplace misconduct?
“If you don’t have cause, you want to look at the employment standards code or whatever statute applies to that employment,” she says. “You want to look at their contract to ascertain if there’s terms there that describe what should happen at termination.
“And then you want to consult with a lawyer to figure out what kind of severance is required, what kind of notice or pay in lieu of notice, otherwise referred to as severance, would be required.”
Preparing for a with-cause termination, meanwhile, is more complicated. It requires the employer to not only demonstrate that the employee has engaged in significant misconduct, but that the misconduct was repeated, and the employer can show it did everything it could do to rectify the situation.
“If I have an employer saying they want to terminate this employee without cause, I would first need to see the (employee’s) contract. I’m then going to do some research to figure out what that the reasonable terms are,” says Miller.
“If it’s a for-cause termination, I still need to see that contract. But I’m also going to ask for what kind of communication they had with them. Whether they have any policies in place regarding this issue? How have they failed to meet them?”
Miller says these policies are important because they set out the expectations a company has of its employees. Yet just having those policies is not enough. They also need to be properly communicated to employees. She provides the example of an employee caught drinking at work on a Friday afternoon.
“I would ask whether they have a drug and alcohol policy in place? Have they communicated to this person about this expectation? Is it one of those offices that just have Friday drinks in the office? You want to keep in mind that you’re not just going to terminate somebody on a whim.”
Inspired HR founder and CEO Debby Carreau has worked with small, medium and large organizations in dozens of industries across Canada to establish structures and guidelines around business change, restructuring and people management. She agrees that having well-defined policies and processes ahead of an employee termination is a must.
“Companies need to develop a good proactive strategy long before they get to that point,” says Carreau, who founded the human resources consulting firm in Calgary in 2006. “The more you can put in the contract, the cleaner it makes it and the more you can be consistent.”
Both the Chartered Professionals in Human Resources (CPHR) Canada and Society for Human Resource Management (SHRM) in the U.S. also encourage organizations to have a termination checklist that walks managers through the steps before, during and after an employee termination. The list can vary, but should generally include additional items to consider, such as:
- Whether approvals need to be obtained
- Has training been provided to those conducting the meeting?
- Are there at least two people present?
- Does there need to be a safety risk assessment?
- Does the severance and/or termination package contains all the required documents and deadlines?
“And these are just a few examples,” says Carreau. “This is where, if you don’t have an HR department in house, I would really encourage you to either call an HR firm or an employment lawyer and just make sure that you talk through all these different pieces to make sure that you’re not forgetting an important step.”
Despite the benefits of having a defined plan in place for leaving employees, recent data on employee exit processes indicates many Canadian companies are still lagging behind.
Earlier this year, online marketplace vendor Capterra revealed only around a quarter of employees (26%) contacted in a survey say their employer has an “offboarding” strategy. Nearly half of respondents (45%) say no strategy has been implemented, while the remaining survey-takers don’t know if one is in place.
Furthermore, although the majority of employees (37%) said their company does offer support to laid-off employees, 30% also said their company doesn’t provide anything after a layoff.
Carreau believes these, among others are, “very basic things an organization should be thinking about to mitigate risk, to treat people with respect and to make sure they’re supporting the culture of all the people who are left behind. That’s not even really being proactive. That’s a basic expectation of employers today to do the right things.”
Miller says it’s important to not skip any steps along the way either. She brings up the example of a soon-to-be-terminated employee going on stress leave.
“Really, at that point, you just have to accept it,” she says. “There’s little you can do in advance of receiving that because you can’t really rush a termination. Mental health issues, even temporary, are protected under human rights law. So, if they are going on stress leave, it’s something that just needs to be accommodated and allowed to run its course.”
The consequences of poorly executed employee termination can be costly, says Miller.
“If you can’t negotiate a resolution, then you could be in litigation for years. You’re going to pay a lawyer and maybe pay this employee for severance, discrimination damages – aggravated or even punitive damages,” she says, noting grievances often trace back to not paying the right amount of severance, alleging cause that they can’t prove or discrimination.
“And that’s really the outcome that everybody wants to avoid. The employee wants to avoid that, too. Nobody wants to be embroiled in employment litigation. Employees deserve certain respect, and we should treat everybody fairly and appropriately.”
In fact, one of the biggest misses that Carreau sees is when employers drag out the termination process. She believes that employers waiting too long before terminating someone is doing an even greater disservice to everyone involved.
“A lot of time, a lot of energy and stress, is wasted when it can be the best thing not just for the organization, but for the individual who they’re parting ways with,” she says.
“When an employer knows a person’s not the right fit and they’re going to make a change, then they should make the change as quickly as possible so that person can move on with their life. There’s nothing worse than dragging it out for two years when both parties would be better served making the change soon rather than later.
“At the end of the day, most people are going to be better served moving on to an organization that values the skills that they bring to the table or that’s a better fit for them.”