12 Thoughts on Employee Terminations

Some time ago Rob Hyndman invited me to wade into a discussion about ways to reduce the risk of employment claims (10 HR Tips for General Counsel). 

Although it's taken me more time than I'd hoped, here are some off-the-top thoughts (not necessarily about reducing risk, just thoughts, more generally on employee terminations).

1.    You can't eliminate risk you can only manage it - I start from the premise that, no matter what you do, no matter how well and carefully you plan the termination, you cannot eliminate the risk that an employee will sue.  All you can do is position the company in the best light in the event that the employee does sue.  Remember that in most cases what you do pre-termination will form the basis of the company's defence if challenged.  The optics of the termination are important, because those optics will influence the judge, if you're challenged.

2.    It is personal - While the termination should not be personal for the manager, don't ever think that it's not personal for the employee - it is. I guarantee that the employee is taking it personally.  In saying that, if the manager carrying out the termination isn't nervous or somewhat emotional regarding the enormity of the task he or she is carrying out, it may be time to change jobs. 

3.    It is emotional - This gets back to what was said at #1 (above).  These issues involve "people", each of which is unique.  Never lose sight of the fact that deep and strong emotions are at play here.  A termination will affect people, even when you suspect that the employee knows its coming.  I have heard that people who are terminated will move through the stages of grieving (denial or shock, panic, anger, reconciliation, hope).  Some people move from one stage to the next quickly, others not so much.  Some get stuck - for example on anger - which is why, 4 years after the termination, when your in court, the termination wound is as fresh as the day that it happened.

4.    Never lose sight of the fact that you have initial control - In most cases, and while it may sometimes feel otherwise, the employer is in control of the pre-termination process.  Resist the temptation to rush the process.  This may involve trying to control the operations folks who are "pushing" the HR folks to take action.  So be it - re-read #1.  Once the termination is carried out, you have lost control.  The process is over, the decision has been implemented, and the employee is largely in control of what happens next.

5.    Use employment contracts or letters of offer - Employers are sometimes reluctant to start the relationship on such legalistic terms.  They say "why should we spell out, at the front end, what will happen on termination?  Doesn't that start things off on the wrong foot?"  Those are questions that each employer will have to answer.  I can tell you that many employers wish they had these carefully drafted and properly entered into employment contracts in place when the point of termination comes and they hear the bad news about how much, at common law, they will likely be required to pay the employee.  Don't believe me, have a look at the recent Lloyd v. Oracle Corporation of Canada on how these agreements can be used effectively and in a manner that protects the employer's interests.  Also, see the Supreme Court of Canada case of H.O.J. Industries Ltd. v. Machtinger.  Care must be taken about entering into these agreements mid-employment given the issue of fresh consideration (see Francis v. C.I.B.C.). 

6.    Do your homework - If there is something to investigate, do so, thoroughly and completely.  Document your investigation through careful notes (dated, signed etc...).  Keep the notes and other file material in a safe and secure location and preserve the evidence.  If you're going to terminate for just cause, then make sure you have the goods.  Objectively assess the evidence against the legal standards.  If you don't have just cause, don't allege it.

7.    Get advice - This may seem self-serving, but it's generally better to be proactive and get some legal advice before carrying out the termination.  It's generally easier to place the pieces on the board than to pick them up off the floor.

8.    Prepare, prepare prepare - here's a partial list of things to think about (by no means is this complete):

• Try to get into the head of the employee - who is this person?  what's he/she going to be concerned about? how can we best deal with this individual?  Each termination is different, because each person is different. Figure out what those differences are and factor in to how you carry out the termination.  Resist the cookie-cutter, one size fits all termination approach. 
• Assuming you're terminating without cause, and are providing a severance package, what will that package be?  Will you go in with the bottom-line "last-offer-first" position or will you leave some room to negotiate?  Many employees (for a number of reasons) want to have the last-word.  Should you leave some room between the offer and the so-called bottom line to allow the employee to have the last word or will you go in with your "bottom-line" and say "take it or leave it"?
• If you're terminating for just cause, how much detail should you provide the employee?  Have you done your homework?  Re-read #6. 
• In most cases, a termination letter should be prepared and available at the termination meeting along with all other documents (i.e. a release) that the employer will require the employee to sign.  Give the employee reasonable time to obtain legal advice. 
• Who will attend the termination meeting?  Who will do the talking?
• Be sensitive to issues of location (you want a private location) and timing (you want to carry out the termination at a time when the office is quiet).  In short you want to avoid the employee having to take the long-walk through the office past co-workers and customers carrying a box of personal belongings.   
• What day of the week?  There's no rule here, but Friday terminations should be avoided, if possible, because the employee will not be able to get legal advice over the weekend and will turn to anyone with an opinion (typically family who will supply well meaning, though possibly less than qualified, "legal" advice with the effect that, come Monday, the employee will be all fired up and itching for a fight).
• Does the day on which you are intending to carry out the termination have any significance for the employee (i.e. it's his/her birthday)?  If so, think of another day.
• I wrote about some of these matters at Some Thoughts on the Timing of the Termination. 

9.    Don't let the meeting get out of hand -  Be firmly and politely decisive.  Once the business has committed to terminate, the sole purpose of the meeting is to carry out that decision.  It's not an opportunity to engage in debate or to be convinced of "how wrong you are".  That train has left the station.  Keep the discussion focused.

10.    Terminate the employee as if he/she was your best friend - With the development of the principle of "bad faith discharge" that started with the Supreme Court of Canada in Wallace v. United Grain Grocers the manner of termination will come under analysis.  Don't lose sight of this, nor of the fact that what you do and say will come under scrutiny by the Court and that you will be called upon to explain your and the company's actions. 

11.    Don't say or do anything that you wouldn't want to have published in your local paper - No elaboration required here.

12.    Eat crow while it's young and tender - Translation: be fair and reasonable (that's not the same, by the way, as writing a blank cheque to the employee).

I'd be interested to hear if you have other suggestions.