For
employers: How to terminate and negotiate severance agreements
So, you've decided to fire your problem employee. What happens
now? Well, besides officially letting them know you have terminated
them, you will now need to negotiate severance agreements. Keep
in mind that this is an area where the former employee can take
advantage of you. It helps to know what you must do for severance
agreements and what is optional. Remember every situation is
different. Even though some offerings like severance pay are
not necessary, they make the termination process go much smoother.
Consider Why You Are Firing Them
The types of severance agreements you may offer your employee
will have a lot to do with the grounds for termination. If you
lay them off due to a company restructuring, they will leave
on better terms than if you fire them for violating company policy.
The reasons will affect the types of severance agreements you
will negotiate. No laws require you to offer severance pay. However,
you may choose to if the termination had nothing to do with the
employee's performance.
Severance Agreements Basics
To develop the best package of severance agreements, it helps
to hire a lawyer. Severance packages are legal documents and
it may take a specialist to get the jargon correct. Each company
has its own policies on severance agreements. Some offer severance
pay, others offer other benefits, and still others will only
allow a former employee to get severance if they promise not
to sue the company.
When you are working with the lawyer, it helps if you have a
clear idea of what you want to include in the severance package.
Do you want to offer a benefits package and a certain percentage
of pay? It is also a good idea to outline who will be eligible
for the severance plan. You can specify a clause that if an employee
is terminated for certain reasons, than they will not be eligible
for any severance benefits.
Understand Where You Stand
Your attorney will help you understand the legal implications
of the severance plan that you have in place. Even if you have
a standard written package, using it to fire specific employees
can get complicated. Before offering a terminated employee any
severance agreements, contact your lawyers or legal department
to get advice on how to proceed. It may help to have them present
at the termination meeting.
Why Have a Severance Plan?
There are a few benefits to having a severance plan. First,
it helps alleviate any harsh feelings your terminated employee
has toward the company. A severance plan gives them an opportunity
to search for a job while still getting paid. That way, they
can still provide for their families. It helps foster a sense
of goodwill that will help the overall moral of the company.
"Before
our workplace was hateful. Now, after I fired James, everyone is
working together. This is what I used to fire James."
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