Firing an employee. That sounds like a pretty simple thing to do doesn’t it? Well if you think that’s true then you are in for a surprise. Employee dismissal is becoming a very complicated affair. It’s not as simple as leaving a pink slip on an employees desk anymore. Employee dismissal is a very serious matter and if it’s not done properly it can be very costly for your business. Every manager will have an employee who doesn’t fulfill their job the way that they should, which means that every manager should have the proper knowledge of how and when to fire an employee. In this paper I will go over the difference between properly firing an employee and wrongful dismissal of an employee. I will also help you to learn how to make firing an employee as pain free for you and them as possible. What do you do with a lousy employee? An under performing or troublesome employee can be a costly disturbance and weaken the work and spirits of other employees. But be careful in disciplini!
ng an employee. Pink slipping or disciplining an employee are actions that employers must take after careful consideration, making sure that the actions stick to company employment policies and laws regarding employee dismissal.
II. When is an Employee an Employee?
Your employer accuses you of stealing $100 from the petty cash box at work. You are able to prove your innocence, but your employer fires you anyway. This sounds like a clear case of wrongful termination, but unfortunately it is usually not. The term “employment at will” refers to the legal rule that presumes that an employer can fire workers without just cause, if the employer and employee do not enter into a separate legal contract during the hiring process. If there is not a separate contract signed guaranteeing job security, the employment is presumed at will, which permits the employer to terminate the employee for any reason, as long as no statute is violated. Statutory protections prevent employers from discharging employees based on discrimination, such as age, race, or sex. Although collective bargaining agreements negotiated by unions typically include just-cause protections against termination, when it comes to individual employment agreements, fixed terms are unusu
al; just-cause contracts are even less common. Which means if you are not a union member you should carefully look over your contract to make sure that you have a just-cause agreement in it, or else you could be spending some time in the unemployment line.
III. Wrongful Termination
Wrongful termination of an employee can be broken up into two general categories. The first is activities that, when participated in by an employee, protect the employee from retaliatory actions from the employer, such as firing or disciplinary action. Any retaliation by the company could result in potential legal trouble, such as a wrongful termination lawsuit.
Here are three areas of protected employee conduct that employers should be aware of:
· Voicing concerns about workplace issues
Understandably, most employers want their employees to feel free to raise workplace concerns. Raising issues regarding health, safety or other legal violations is a protected action. When the concern involves a person in authority, the employee is protected whether they tell someone within the company or an outside labor organization. If an investigation proves that the complaint was legitimate, the company should take immediate action to address the complaint. But even if a complaint is later proven to be unfounded, the employee is still protected by law. The company should be careful to deal with all the grudges of both the accused and the accuser, making sure that the accuser does not experience any retaliation.
· Personal lives
Information regarding the choices an employee makes regarding their personal lives can’t be used against them. For example, if an employee shares that they often drink alcohol during his or her off time, that information is protected. Other actions that could be considered protected include taking time off to tend to a sick family member, or collecting worker’s compensation because of an on-the-job accident.
· Cooperation with investigations
Complaints about a company can lead to investigations and often time’s employees are asked to participate in the proceedings. Whether the investigation is conducted internally or externally, those asked to cooperate are protected from company retaliation. Such proceedings usually include answering questions, submitting statements or offering evidence. If an investigation leads to a trial, the employee could be called upon as a witness. Any retaliation based on cooperation with such an investigation would be illegal.
After an employee has participated in any of the above-mentioned protected activities, an employer should make an effort to protect that employee from retaliatory action. Obvious retaliatory actions include firing or demoting an employee. However other actions, such as reducing benefits, transferring the employee, changing their work hours or negative job evaluations, could also be considered forms of retaliation.
Obviously, there are situations where an employee who participates in one of the protected activities described above may require discipline for a following and unrelated action. The employer must make sure that there is no connection between the disciplinary action and the protected action. Any misconduct should be immediately addressed, and all disciplinary actions should strictly follow company policies.
The second and final category of unlawful dismissal is the laws regarding employee dismissal. If a situation arises where the only choice is to terminate an employee it is very important to read these laws regarding employee termination before hand to make sure that you are not putting your employer at risk of a lawsuit. Here is a list of the current laws that an employer should refer to before hand:
Federal Law Employment-Related Prohibition Who’s Subject to the Law?
Title VII of the Civil Rights Act Prevents discrimination against employees on the basis of race, color, religion, sex or national origin. Employers having at least 15 employees.
Age Discrimination in Employment Act Prevents discrimination on the basis of age against employees who are over 40 years old. Employers having at least 20 employees.
Americans with Disabilities Act Prevents discrimination against disabled employees. Employers having at least 15 employees.
Immigration Reform and Control Act Prevents discrimination against employees on the basis of national origin or citizenship status. Employers having at least 4 employees.
National Labor Relations Act Prevents discrimination against employees who engage in or who refuse to engage in union activity. Also protects nonunion employees who act together in an effort to improve or protest working conditions that affect them on the job. Employers whose business has a significant impact on interstate commerce.
Employee Retirement Income Security Act Prevents employees from being discharged solely to prevent them from vesting or qualifying for benefits under qualified pension plans. Employers who maintain qualified pension plans for their employees’ benefit.
Remember that these laws do not make it illegal for you to fire an employee who falls into one of these categories. These laws are made to protect these groups from discrimination, not to guarantee them employment. For example, in a 1990 case involving the National Labor Relations Board (NLRB), a federal court ruled that the NLRB had lawfully terminated a Hispanic law clerk where the NLRB proved that the law clerk’s performance was the reason for his dismissal. The plaintiff had poor writing abilities and he was unable to investigate and research cases thoroughly. In addition to the evidence of poor performance, the NLRB was able to show that the Regional Office implicated by the charge of discrimination had given excellent appraisals to other Hispanic employees and many Hispanic employees had been promoted to higher positions within the organization. This is a good example of why it is important not to be afraid to fire an employee just because they are part of a protected gr!
oup. If any employee doesn’t do their job properly and you can prove that then you shouldn’t be afraid to fire them.
I know that all the laws and regulations can be very intimidating when considering firing an employee but it is important to remember that it is your responsibility to fire employees who don’t do their job properly. If you never fire employees because you are unsettled by the risk of being sued it is important to know that your company can also be sued for failing to fire employees. This problem arises when an employer becomes aware or should have become aware that an employee may cause harm to others, yet fails to take any action to prevent the employee from causing harm. If the employee should subsequently injure another employee, a customer, or other person, the injured party may sue the employer for being negligent in retaining the dangerous employee. An employer’s continuing obligation to guard against employing individuals with dangerous behavior is one that first arises during the hiring process. Clearly, you need to screen people carefully before you hire them to find !
out if they have a past history of violence or erratic behavior.
IV. Legitimate Dismissal
I know after reading all the laws resulting in wrongful dismissal it seems impossible for there to be such a thing as legitimate dismissal, but believe it or not there is. These are situations where the employer is not at fault for the employees’ dismissal. Under the Employment Rights Act of 1996, there are six circumstances in which a dismissal can be fair if it is due to:
· Capability: Capability might mean skills, aptitude, health, etc. In some cases there is some inherent problem, which prevents the employee from doing their job. In other cases they are capable but for some reason they are not achieving the standard they can and which the employer requires.
· Qualifications: These could be academic, technical or professional and related to the job. Loss of a driving license where this is vital for the job is the most common reason for dismissal on these grounds.
· Conduct: The disciplinary code which applies to you probably defines three types of misconduct: minor lapses, major events which justify a final warning without going through the earlier disciplinary stages and gross misconduct which justifies instant dismissal without notice. However, acts of minor misconduct leading to warnings under the disciplinary code and which continue to be repeated, may lead to fair dismissal. Examples would be persistent lateness or short-term absence.
· Redundancy: There are three types of redundancy:
Job redundancy, where there has been a closure of the employer’s business.
Employee redundancy, where there is a lack of work or the nature of work has changed.
Place of work redundancy where the business is relocating.
· Legality: The concerns a situation when an employee could not continue to work in the job without contravening a legally imposed restriction or duty, for example the need for a mechanic to hold a driving license to be able to road test a vehicle after repairs.
· Miscellaneous: This is something of a broad category and includes any other reasons, which might justify dismissal. Examples of cases where dismissal was held to be fair include a wife dismissed because her husband was starting up in a rival business, a manager who moved too far away from a factory to be on call in emergencies as his the job required and employees who resisted changes to working conditions which were accepted by their colleagues and justified in the particular circumstances.
V. How To Avoid Wrongful Termination
After reading various cases of wrongful dismissal I must admit that it seems like a real headache for both the employer and the employee, that is why I would like to help you learn the best way to fire an employee without causing a wrongful dismissal lawsuit. According to a study done by Jerald Greenberg (professor of management and human resources at Ohio State University’s Fisher College of Business) you can significantly reduce the risk of an employee lawsuit by using more effective human relations practices. Greenberg estimates that companies could save an estimated $13,200 per employee simply by being honest with employees who are being fired. Greenberg interviewed 996 study participants as they left offices of the Bureau of Employment Services (state employment offices) in central Ohio. They were asked a series of questions concerning topics such as how they were treated at their last job, how they were treated when they were terminated, whether they had thought about fi!
ling suit against their former employers, and whether they had actually filed suit. Of those participating, 163 were re-interviewed about four months later to get more information. Greenberg said results showed that employees had two basic motives for filing suit: economic and psychological. Workers were more likely to report filing suit if their job loss caused them financial problems, or if they believed they could successfully win a large award from the company. But there was also a revenge factor among workers who believed they were treated in an unfair or undignified manner at their firing, Greenberg said.
“Nobody likes to lose their job, but just being fired or laid off isn’t enough to get most ex-workers to file a claim,” he said. “The way the termination is handled is key. A worker has to feel aggrieved enough to want to lash back at the company.”
The results showed:
· Of those participants who felt they were treated with “very much” dignity and respect at the time of their dismissal, only 0.4 percent reported filing claims against their ex-employer. However, of those who said they had “not at all” received respectful and dignified treatment, 14.9 percent reported filing claims.
· Only 1.7 percent of those who said they received a complete explanation of why they were being dismissed reported filing suit. In contrast, 20.3 percent of those who said they received no explanation at all reported filing a claim.
I found these findings very interesting because it proves that there is a clear advantage to explaining the reason for termination to the employee and showing them respect when firing them. I realize that many of these cases would probably be won by the employer if they had a solid reason for firing the employee, but when you think of the legal costs and the irritation of going to court, it seems a lot easier to simply explain the dismissal to the employee and treat them with respect. As Greenberg said: “If you don’t give reasons for the dismissal, you’re allowing the employee to assume the worst about the company and develop reasons in his or her mind to file suit,” he said.
VI. Properly Firing an Employee
Properly firing an employee isn’t as simple as it sounds. If an employee does something that makes them deserve dismissal it is easy to lose your temper and talk down to them, but it is exactly that type of behavior that may make you find yourself in court. The most important thing is to be prepared; you may want to role-play the firing process with someone else so you are properly prepared. Next notify your superiors of the termination and the termination date. Set up an appointment with the employee to meet with you in your office and make sure you have a witness present. When the employee comes in be honest with them and tell them why they are being fired whether it be due to poor performance, tardiness, or unacceptable behavior. Answer any questions that the employee might have and notify him or her of any benefits (unemployment, health insurance, severance pay, etc.). Finally give him or her a written statement of the termination stating the reason for termination.
Thanks to our federal government I know all of this may seem intimidating. The more I learned about the laws the more sense they made to me. It is important to remember that if you do discriminate against an employee for age, race, sex or any reason other than their performance you could be facing a very ugly lawsuit. If you fire an employee based on poor performance or any other good reason, it is important to have some proof to back it up incase they do file a suit against you. The best way to avoid a lawsuit all together is to be very particular during the hiring process and when it is necessary to fire an employee be sensitive, particular and remember to tell them the specific reason for their dismissal and any benefits that they are entitled to. No matter how closely you follow these steps you will still run into the occasional employee who is simply looking for a free handout but the best way to fight back is to follow the proper steps and keep good documentation of the employees termination.
Setting up the termination meeting” CCH Inc. Go Business, Business Owner’s Toolkit.
Berman, Eileen. “The Victims of Downsizing.” Industrial Management Sept.- Oct. 1998: 5-9
Chapnick, Samantha. “Forward Observer (Employee Termination)” Training & Development July 2001, 7-11.
Friedman, Robert. Upstart Small Business Legal Guide. Dearborn Financial Publishing, Inc. 1998.
Greenberg, Jerald. “Bad Treatment at Termination Leads Many Ex-Employees to File Suit” Research Today. Fisher College of Business. Columbus, Ohio.
Leblang, Theodore R. “Legitimate Termination or Wrongful Discharge?” American Druggist June 1998: 51-54.
Various Contributors. “Firing the Boss” The Economist October 1999:17-19.
Various Contributors. Dismissing Staff, Unfair Dismissal. Department of Employment,
Workplace Relations and Small Business. www.dewrsb.gov.au/smallBusiness/advice/ workplaceRelations/dismissingStaff/dismissal.htm
Wiggins, Dave. “Firing: When and How to do it (dismissal of employees).” Journal of Environmental Health September 1998: 38-40.
Zigarelli, Micheal A. “Can They do That? A guide to your rights on the job”.Lexington, 1994.
...(download the rest of the essay above)