Termination of Employment

Guide

Companies take incredible steps to build a winning workforce. In the process of creating this team, there are sometimes individuals who are not the right fit for the company. On noticing this, the human resource department will need to take specific steps to terminate the employee. There are several reasons that termination may occur, with each having a legal implication. It is essential to understand the legal aspects of termination as employees are also aware of their rights.

Termination of Employment

The Equal Employment Opportunity Commission enforces four primary laws. They guard against any inequality in the workplace and are in force to keep employees safe. They are: –

  • The Pregnancy Discrimination Act
  • The Civil Rights Act of 1964
  • Title I Americans with Disabilities Act of 1990
  • Age Discrimination Act of 1967

Proper paperwork is key to ensuring that termination is legal. Documents are for reference and to ensure that there is credibility on the side of the employer.

Types of Termination of Employment

Termination differs depending on the process of hiring the employee. Where there is no employment contract in place, the employees are working on an at-will basis. Employers are legally able to fire them at will, with no reason. Employees who are under contract can be terminated based on the specifications of the contract.

Another way to terminate an employee is to follow due process as laid out in the employee handbook. This could include several warnings in writing before termination occurs. This allows the employee to understand the expectations of the company and gives them time to take corrective action if possible. Termination only happens if there are no corrections to clear, specific and objective guidelines provided by the employer.

Some situations may force an employer to terminate that are outside the conduct of the employee. With these situations, reduction in force comes under consideration. This occurs when an employer needs to terminate due to political or economic uncertainty to reduce labor cost. There are at least six steps to comply with and they are: –

  1. Management alignment and review with legal counsel
  2. Justification of redundancy
  3. Selection of employees that are to be terminated
  4. Consultation with the employees
  5. Giving notice and proposed severance packages
  6. Release from the company

Employers need to make sure that when they terminate any employee, no matter what the contract situation is, they avoid wrongful termination. It is necessary to prevent any type of discrimination. Furthermore, employees cannot lose their jobs for exposing violations in public policy.

The right way to keep with the termination of employment legislation is with separation agreements. All the terms of the separation are within these documents. They include a host of conditions such as: –

  • The full severance package if there is any financial payout.
  • The amount payable and the method of delivery
  • All the details of the separation, such as clear identification of both parties, the reason for termination and termination date.
  • Clarification on taxes owed as well as insurance statements.

Non-compete clauses for employees seeking further employment or going into business.

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