Severance Agreements

Why is it the worst employees, the ones that you simply must fire, are always the ones most likely to sue you? Many small business owners and Human Resources Managers find themselves asking this question. They must know how to terminate an employee while limiting their liability if the case goes to court. With the sue-happy nation we live in, it is easy for a terminated employee to bring a case against you and claim that you had no real ground for termination. In fact, the employee may claim that you discriminated against him or her. This can get you in both financial and legal troubles. Therefore, you must know how to terminate an employee properly to keep yourself out of hot water.

How to Terminate an Employee Step 1: Document

The first step you need to take when terminating an employee is to document everything. You may think that writing down every little detail is time-consuming and tedious – and it is. Nonetheless, it is necessary. Pay attention to details when documenting problems. This can be a life saver if legal troubles follow the termination. Make sure you write down everything that took place, including the situation, the time it took place, and the actions you took to correct the problem.

How to Terminate an Employee Step 2: Discuss it with the Employee

In step two, you must discuss the issue with the employee. During your discussion, you must tell the employee what he or she did wrong, tell him or her the actions you will take, and warn him or her of the consequences if the action reoccurs. Document this discussion and have the employee sign paperwork proving you addressed the matter and that he or she is aware of the outcomes.

Sometimes, an employee will refuse to sign this documentation. If this is the case, have another supervisor sign as a witness to your discussion. If there are no other supervisors, document the date and time and note the employee refused to sign.

How to Terminate an Employee Step 3: The Exit Interview

If you have completed the first two steps in the termination process and the employee still is not working up to your expectations, it is time to begin termination proceedings. To do this, you will need to coin an employee termination letter that details the reason for dismissal and the effective date of termination. It should also include whether the employee is eligible for rehire and any benefits that he or she may or may not still receive after termination. Finally, sit down with the employee and discuss the termination letter. Keep the exit interview brief and avoid saying too much, as anything you say can be used against you later if the employee decides to file a lawsuit.

"Before our workplace was hateful. Now, after I fired James, everyone is working together. This is what I used to fire James."