Employers don’t typically hire employees with the intent to terminate their employment, but sometimes it’s the only feasible option or simply the best course of action for the organization. Many circumstances can lead to a termination, such as surreptitious recordings [see article by Dave O’Neill], breaches of the employment contract, or other considerations that warrant termination without cause, or in plain language, at no “fault” of the employee.
Terminations are not black and white. Many factors contribute to the employee’s specific circumstances and, in turn, the financial impact on the employer. The legal obligations during terminations directly translate to dollars in the employee’s pocket. Still, there are also human factors that can significantly impact how the news is taken and, therefore, the outcome of the termination.
Effective terminations actually start with effective management. Utilizing soft skills such as showing empathy, kindness, and respect throughout the employment relationship [and during a termination] will reduce the liability if the employment ends in a termination. Here is how effective management can impact the bottom line:
While some of these hypothetical impacts are hard to measure, they can have significant financial implications. For example, consider the impact of one soured employee that is left after their colleague was terminated and was perceived to be treated unfairly. That employee’s attitude could influence an entire department or even organization, and their negativity could lead to the need for a further termination or resignation, triggering yet another cycle of avoiding termination pitfalls, cost of termination, cost of rehiring and training, and the threat of legal action. Legal actions from termination decisions can cost an employer up to 2 years of the employee’s compensation in damages, plus legal costs.
The best course of action to avoid unnecessary costs, resources and stress is to start from the beginning of an employee’s employment – take the time to hire the right people for the right roles and then ensure that there is a strong emphasis on a positive, value-based workplace culture. From there, effective management of both good and poor performers is critical for maintaining a strong culture.
As mentioned, each employee’s circumstances differ, so it is important to approach terminations carefully to ensure legal obligations are met — and it is best practice to seek legal advice with each case. Human Resources professionals can also be utilized to assist with performance management and any other (grey) considerations for each situation.
Contact our Human Resources Consultant and Employment Law Specialists at Spraggs Law today.
Please note: This article does not contain legal advice. If you would like advice on your specific situation, please contact Spraggs Law.
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