Ethical Terminating Practices

May 28, 2014
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Ethical Terminating Practices
In our previous post, we asked this question:
Even businesses need Emergency Supplies. How many days’ worth of emergency supplies are recommended to be kept on hand for the average number of people on the premises?
Answer: 
For a business of 5-20 people, prepare a minimum of 72 hours worth of supplies. Choose food that is shelf-stable for several years (up to 5, if possible), and store it in a location that is easily accessible in the event of an emergency.
Did you know the answer?
Now for this post’s question!
True or False: Written employment contracts can reduce employer liabilities.
Check back for the answer in our next post!
One of the most painful duties that falls to managers or business owners is the termination of employees.  Being fired is one of the most traumatic experiences we ever undergo in life and having empathy for the person across the desk from you is natural and important.
As the employer, there are important “do’s and dont’s” that you need to comply with to ensure that employee termination is handled smoothly and ethically—and to minimize the risk of future negative consequences.
Of course, an employer cannot terminate an employee for reasons of discrimination.
How can you be assured that you won’t be slapped with a discrimination charge? And what constitutes termination with cause? Let’s take a look at some of the basic “do’s and don’ts” of employee termination.
Keep Proper Records
Maintain clear, complete records for all your employees.  Every success and every violation should be recorded, in order to present a balanced perspective—and regular performance reviews will go a long way to protecting both your and the employee’s interests.
If you ever meet with an employee to review a concern over performance, be sure to document this in their file. If it becomes clear that an employee simply needs better training—which you have not yet provided—make an effort to provide this, and note it on record.
Termination without Just Cause
In the event of a termination without cause, you as the employer have a greater responsibility to the terminated employee than in other situations. The Employment Standards Act 2000, S.O. 2000, Chapter 41 outlines your responsibilities in regard to providing a notice of termination; you may also provide termination pay in lieu of notice, provided it is equal to the pay that would have been received if notice had been given.
You’ll also need to familiarize yourself with the guidelines concerning severance pay. If the employee has been with your company for five or more years, and if your business has a payroll over $2.5 million, the employee may be entitled to severance.
Termination with Just Cause
On the other hand, termination with just cause leaves your business less obligated to the now-former employee—however this is a difficult route to take, as it is often hard to prove employee misconduct without hard evidence or testimony.
And of course, the burden of proof falls on you as the employer.  Just cause for termination would include acts of: theft; dishonesty; insubordination (ie. willful refusal to follow directions / do their job); incompetence and/or poor and/or negative performance.
These can all be difficult to prove which is why careful and complete documentation of employee records are vital.
Constructive Dismissal
Should you, as the employer, impose a fundamental change to your employee’s job, it may be interpreted as constructive dismissal. That is, the working conditions seem to have deteriorated to the point that the employee feels forced to leave their employment.   The change in the job position must be a substantial departure from the previous position, and if the employee does not accept the change, you may be required to pay severance or termination pay. However, if the employee does accept the change, they automatically forfeit their rights to claim constructive dismissal if they are terminated in the future.
None of these situations are ideal, because in a perfect world, everyone would do their job well and no one would ever be unemployed. However, termination is simply the nature of business, regardless of whether the fault lies on the employee or the business.
If you find yourself ready to terminate an employee, don’t go it alone.  Ensure  that there is a second authoritative figure also attending the meeting. The reason for termination and any post-termination obligations should be clearly outlined, and you should be ready to answer any questions the employee might have.

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