HUMAN RESOURCES / APR. 21, 2015
version 4, draft 4

Legal Issues to Consider When Firing Employees

Dismissing employees is one of the most unpleasant tasks that business owners have to undertake. Worse still, you might also find yourself having to deal with a wrongful termination suit. Such lawsuits could prove very costly for your business in terms of time and money. Most countries all around the world have laws which govern how and when an employee can be terminated.

Here are some of the issues you need to look out for when dismissing employees:

See also: How to Fire an Employee You Don’t Like

1. Breach of contract

Contracts can either be written or implied. Written contracts are those where employees are required to sign an official document. On the other hand, implied contracts are those made orally or in any other implicit way between employers and employees. Firing an employee under both written and implied contracts is considered illegal, and could be grounds for a wrongful termination lawsuit. To avoid a breach of contract, you need to ensure that all your company policies are made clear to employees upon recruitment. And avoid making unconditional commitments to employees such as: ‘The job is yours for as long as you want’.

2. Retaliation

Employee retaliation refers to any drastic action taken against a staff member for protesting against discrimination or harassment happening in the workplace. This could also apply to staff members who testify on behalf of their colleagues’ complaints. Employee complaints should therefore be handled with utmost care. You might find yourself facing retaliation claims even if your actions are unintentional. For instance, when an employee complains about a supervisor, you could move them to a new department to alleviate the problem. However, the employee could interpret this as retaliation despite your best intentions.

3. Discrimination

In many countries all over the world, the law prohibits the firing of employees on the basis of nationality, sex, religion, age, disability or race. However, even if your actions are not intentional, they might be construed as discrimination. For instance, if you always find yourself disciplining individuals of a certain gender, it might be interpreted as discrimination. To avoid such claims when firing, be sure to keep detailed records of warnings for all employees.

4. Defamation

Defamation involves making negative remarks which destroy an employee’s character. This is something that can happen way beyond the date of dismissal. You could find yourself facing a defamation suit if your former employee can prove that you made malicious or untrue remarks that thwarted their chances of finding a new job. To avoid such claims, you need to carefully monitor your correspondence concerning former employees. When a potential employer asks you for a reference or review, avoid giving any false information since this could come back to haunt you.

See also: How To Fire an Employee the Easy Way

One of the best ways of avoiding a wrongful termination suit is by remaining compliant in all your dealings with workers. Be sure to display the current labor laws of your area in an open area where all the workers can see them. This way, none of your employees can plead ignorance. Finally, it would be advisable to ask employees being fired to sign a Termination and Release Agreement. By signing this agreement, the employee would be agreeing not to make any claims against the company.

Have you ever had a bad experience in firing an employee? Share your experience with us in the comments section below!

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