Firing Employees the Right Way (Avoid these common mistakes)

Saying goodbye to employees is a common situation within companies and one that is uncomfortable for both parties involved. Whether you are carrying out massive corporate layoffs or firing an employee for other reasons, the situation is never easy to navigate.  You must keep in mind that there will always be two perspectives when an employee is fired or laid off (we’ll get into those differences later on). 

• Employer Perspective: The employee is no longer a good fit for the role (this could be for many reasons).
• Employee Perspective: They may feel their dismissal is unfair, and are unable to understand the rationale behind why they have been fired or laid off. 

A dismissal, no matter what the reason, is a decision that should not be taken in the heat of the moment. Knowing how to fire an employee is a task of the HR team. It is crucial that the human resources department has a proper HR  plan in place when firing or laying off employees. The right plan helps avoid possible errors within the process, such as not providing the employee with the correct dismissal documents. A simple error like this could spell detrimental for the company. 

Before we get into the Dos and Don’ts of firing, let’s clear up the differences between firing an employee and laying off employees.

Firing vs. Layoffs

The difference between the two is mainly due to the reason for the departure and the permanency of the decision. 

Firing:  The dismissal of an employee from their duties. When you chose to fire people, this is often a final decision. The decision of firing employees often results when the company feels that there are performance issues or attitude problems with a particular employee.

Layoff: When a company lets go of an employee for the main reason for downsizing during an economic situation. Temporary Layoffs occur mostly when the economy is in a downward spin. Laid-off employees often are entitled to unemployment benefits for health insurance.

Do you know the most common errors of firing, and how to avoid them when saying goodbye to an employee? 

The hiring manager must know the correct steps and procedures for letting go of an employee. For a guide on the key steps required when firing an employee, continue reading on. We’ll share with you the proper dismissal process, common errors when firing, and Do’s and Don’ts of letting go of employees.

Let Factorial help you manage your hires and terminations. 👇

Dismissal Process

• Communicating a dismissal – Disciplinary or Objective

Based on the legislation in your country, the laws differ for how much notice you have to give before termination. In many cases, 15 days is the standard length of time. Although, in some situations, 30 days is mandatory. If an employee is under probation, or if the dismissal is due to disciplinary based on employee conduct, in most cases, notice is not required. 

Give enough notice time required by law, no more, no less.

Wondering what may happen when too much notice is given to an employee?

• The employee decides to take advantage of the situation and request medical leave the day after the notice is received. For a small business, paying out medical leave could result be a huge loss for the company. 
• The employee chooses to talk badly about the company to its customers or suppliers. Or, they choose to tamper with the systems of the company before leaving (ie. deleting valuable content, etc.). All of the above can lead to a potentially hostile work environment. 
• The employee steals the company database. When a worker is fired and asked to continue working, they often slowly disconnect and lose loyalty for the company day by day. This could have massive negative effects depending on the relationship the employee has with the company.

Recommendation: Having a standard dismissal procedure in place for letting go of employees is essential: however, what’s more important than the way you choose to dismiss an employee is how you decide to communicate the dismissal.  Every employee has a unique temperament and handles news in a completely different way. Before delivering news to an employee, make sure you know how they are likely to respond. This is vital to evading any problems coming up!

• Termination Letter

By law, in most countries, the moment a dismissal is verbally communicated, a formal written letter also has to accompany it be signed by the outgoing employee. The most common error at this stage is that the employer allows the employee to return on another day to sign the termination letter.

Recommendation: If the employee refuses to sign the letter, you can inform them that even though they may not agree with the decision, they must sign in acknowledgment the termination has been communicated.  

If the terminated employee still refuses to sign their termination letter, there are two options. 

• 1st Option – Have two witnesses to the verbal dismissal, sign the termination letter. This action confirms that the employee has been correctly terminated yet has refused to sign the letter. 
• 2nd Option –  You can send a couriered notice to the employee’s address. In this way, the dismissal is formally communicated. Make sure you sent the termination letter to the most recent address of the worker. As a tip, before firing or laying off employees, make sure to verify their latest address, in the case they refuse to sign the termination letter, you will have the proper address to send them formal notice.

• Observance of Special Circumstances 

Before firing an employee, it is essential to ensure the employee is not protected under any special laws (ie. pregnant women, union members, or legal representatives of workers). 

When a worker is associated with a union, remember to abide by the state law regarding unions in your area. Employment laws differ from region to region, and union laws are no different.  Most unions require that the employer give the worker a period of time in which they must defend themselves before the termination is final. In most cases, this is between 3-5 days. 

• Communicate Dismissal Reasons 

When letting go of an employee, it is necessary to communicate the correct reason. This is so that you are legally following the proper dismissal procedure, and so that the employee knows the exact reason for their termination.

Also, if you’re wondering, can an employer tell other employees why you were fired, the answer to this isn’t so clear. Although not regulated by law, it is a good idea to decide as a company, whether you feel it is appropriate to share this information with your employees or whether it is protected with your workplace confidentiality policies.

Recommendation: If you are firing employees based on conduct dismissal, be sure you have the correct information. If you fire someone without adequate reason or proof of their wrongdoings, the company could be at fault. 

• Issuing Final Pay

Whether you have laid-off workers or dismissed an employee because they were a poor performer, make sure you pay out the proper final pay. This will depend on the reason for their termination, the length of time they have been with the company,  and their contract stipulations. 

Recommendation: One mistake you don’t want to make when letting go of employees is forcing them to leave voluntarily. Many companies do this so that the employee doesn’t have access to their unemployment insurance benefits. This behavior on the company’s side does nothing more than start a war between the worker and the company. Also, taking this type of action could result in accusations towards the company for the illegal firing of an employee. 

Errors in Firing

There are two categories of errors that often come up when firing. They are as follows:

• Legal infractions – these result from when the company breaches the law. Take a look at the section on legal observations below for more information.
• Business Practice – these errors tend to result from the way the dismissal is made. Sometimes, these errors come up from ignorance, speed, or poor business practices.  Firing with integrity isn’t always standard. 

👉 The decision to fire an employee is not one to take lightly.  Without the proper steps and procedures in place, your decision can backfire on you. 

Do’s and Dont’s of Firing an Employee & Legal Matters

Do’s

• Set the proper criteria for employee laying offs (loyalty is not enough, performance assessment is key).
• Prepare a process for firing an employee.
• Before making any decision to lay off employees, it is vital to identify which positions you value least and which you wouldn’t want to lose.
• Have sympathy. Understand that the decision you are making has a serious effect on someone else’s life. Approach each layoff or firing with care and compassion. It’s crucial to know how to lay off employees the right way and when to lay off employees in the company. 

Don’ts

• Make a quick decision. Instead, spend time analyzing your decision; make sure you made it for the right reasons. 
• Give too much notice when terminating an employee. This could backfire on you. 
• Following the departure of an employee, don’t forget to change passwords, eliminate accesses to accounts, etc. 
• Burn bridges. It’s a good idea that when an employee is leaving, to do your best to fire them with dignity and provide them with constructive feedback they can take away with them. 

Legal Observances

In most countries, there are laws in place to protect workers.  Before firing or laying off anyone, make sure to review the rules:

• Give proper notice. This normally depends on the length of time the person has been with the company.
• Determine if you need to give notice in writing.
• Do you know if you need to pay severance to your employees, and if so, how much?
• Know the laws on mass layoffs.
• When a union is involved, pay special attention to the rules of how to fire employees under union protection. 
• Reference the terms and conditions of the employee contract. The contract may state that the employee is entitled to more than the regular legal standards. 

Firing an employee for whatever reason is never an easy decision as it affects many workers and the company as a whole. The human resources department must effectively plan the steps of dismissal to avoid falling into the firing errors we’ve mentioned in this post. The most common errors include not providing sufficient notice to the worker, allowing them to sign the termination letter another day,  or not verifying the grounds for dismissal. Use the steps we’ve shared with you, to create your plan for firing employees the right way. And, don’t forget…

You can manage your team better by registering them on Factorial. Keep track of their hours, absences, and documents all in one place!

Manage your team better by registering them on Factorial!

Keep better track of their hours, absences, and documents, all in one place!