Termination

Purpose of Process (also see how HRSource can help):

To end the employment of a person who is not willing to leave the company voluntarily. The company can terminate the employee for:

• Poor performance
• Serious misconduct
• Reduction in Headcount (layoff)

Recommended Steps in the Process:

1. Complete and document the disciplinary action process.
   
   
2. Determine if you with to offer a severance package in exchange for the employee signing a release (see Creating and Obtaining Releases process).
   
   
3. Prepare termination paperwork:
   • Mandated state notifications (see example for state of California)
   • COBRA Election form
   • Certificate of Group Health Coverage form
   • Health insurance conversion
   • Notification of state unemployment
   • Retirement plan (401(k)) information, including vesting, rollover options, and outstanding 401(k) loans (see Selecting and Administering a 401(k) Plan process)
   • Employee Assistance Plan (EAP) brochure, if available
   • Career Counseling, if available
     
     
4. Determine if the employee has company property, computer passwords, or security clearances.
   
   
5. Obtain the final paycheck from payroll. The employee must be paid for all hours worked including the termination notification time. Consider paying the employee an additional amount equivalent to one or two weeks salary. This has several advantages:
   • Decreasing the likelihood of a lawsuit,
   • Enhancing the company's reputation of treating employees with compassion, and
   • Provides more time to issue final paycheck and termination paperwork.
   
   In cases of termination for serious misconduct, it is not necessary to pay beyond the date of termination notification.

6. Be prepared to answer the following questions:
   • When should I leave? A: You may leave now
   • What about the project I'm working on? A: Your manager will handle it.
   • When can I clean out my desk? A: Now
   • Can I return tonight or this weekend to clean out my desk? A: It's desirable to allow the employee to avoid the embarrassment of cleaning out the desk in front of co-workers, but if you allow after-hours access, arrange to have the manager present.
   • Whose decision was it to terminate me? A: The decision was made based on an evaluation of your performance (or your misconduct) by your management with concurrence from Human Resources.
   • Can I continue to use my voicemail? A: Your voicemail will be turned off at the end of the day.
     
     
7. If there's a risk of a physical reaction by the employee being terminated, alert security to be prepared. Security personnel should be close by, but maintain a low profile.
   
   
8. It may be advantageous to have two people (typically the immediate manager and Human Resources) notify the employee of the termination, for support and collaboration of what was communicated.
   
   
9. It's preferable to communicate the termination decision early in the shift and early in the week. However, consider how the employee gets to and from work. The timing of the notification of termination may need to be adjusted if the employee commutes and is not able to go home before the end of the shift.
   
   
10. Avoid debating the merits of the termination. Be courteous and firm. Acknowledge disagreement and state that the decision to terminate your employment has been made by the company and is final. If the employee has borrowed company property, request that it be returned immediately. Keep answers to questions short.
    
    
11. Politely escort the employee out of the building. Offer to help them pack or to carry their items out to the car.
    
    
12. Cancel passwords or clearances as appropriate.
    
    
13. Document the discussion and actions that occurred during the termination notification, as a defense against possible wrongful termination lawsuits.
    
    
14. Inform others in the work group, as needed, that the employee is no longer with the company. Do not discuss the why's or the details. State that you cannot discuss the details. Reassure remaining employees relative to staffing plans and work assignments.
    
    
15. Evaluate the termination and determine if something could have been done to prevent it. Consider the following questions:
    1. Should you have been able to predict during the interview period that this would not work out?
    2. Was the job clearly defined?
    3. Were reference checks conducted?
    4. If this employee was a transfer, from what department did they transfer? Have there been other problem transfers from that department?
    5. Could the employee's manager use additional management training?
    
    Consider conducting an exit interview

Process Tips:

Involuntary terminations are very challenging. They are often packed with emotion. It's important to remain in control. Be both firm and compassionate. Just because the employee is being terminated doesn't mean he/she is a bad person. Perhaps the skills of the employee just didn't match the requirements of the job because of an erroneous hiring decision made by both the employee and the company. The more dignity the employee can maintain, the less likely a lawsuit or other complications will occur.

In addition to the involuntary termination reasons listed under the "purpose" section, many companies choose to be "employers at-will." An "employment at will" relationship between the employee and company means the employment relationship may be terminated at any time by either the employee or the company with or without cause, as long as the termination reason is non-discriminatory. To establish an "employment at will" relationship, the employee should be notified of the relationship during the offer process (see sample offer letter) and in the employee handbook (include an Acknowledgment of Receipt of the Employee Handbook agreement). To maintain that relationship, avoid communication to the contrary, such as assurances of continued employment.

Avoid making statements in the personnel manual or other places that specify the steps that you will follow in making layoff decisions, promising progressive discipline, or otherwise limiting your right to terminate an employee.

Use extra caution when terminating an employee who has previously made a complaint to the government or the company involving discrimination, harassment, a violation of safety, or a violation of some other law. The likelihood of a lawsuit is high and a charge of retaliation will almost certainly be added to the suit. Make sure the reasons for the termination and all the steps in the disciplinary process are clearly and thoroughly documented. Have legal counsel review the case before notifying the employee of termination.

How HRSource™ Can Help:

Use HRSource™ to document the disciplinary action. The notes section of HRSource can be used to track each level of disciplinary action including the termination, including the documents given to the employee and notes from counseling sessions.  The Documents module can be used to link to the related documents.