You’ve just terminated one of your employees. Now what?
In some respects, the termination meeting is the quickest part of the process: there’s a lot of paperwork that needs to be done.
As you disengage from the dismissed employee, there still are plenty of items to take care of – not only for the dismissed employee, but for other remaining employees and people outside your organization.
Your HR department will need to complete a Record of Employment (ROE), which the employee will need to qualify for unemployment benefits. This states when the employee started and when they were terminated as well as the reason for termination. By law, this must be provided to the employee no later than 5 days after the termination and there are strict penalties for employers who fail to file an ROE – $2,000 fine or up to 6 months imprisonment – so don’t skip this step!
Payroll will need to do a final reconciliation on wages, commissions (if applicable), vacation allowance, benefits and withholding taxes. Also, you should prepare a T4 for the employee and provide that to the him/her, while also filing with CRA. Should you have to pay out a settlement to the employee as a result of a negotiated claim, you also need to ensure this is properly recorded on the T4 and declared to CRA.
If the company has a pension plan, the pension administrator will need to provide a T2033 E form so the employee can either take the pension entitlement as a lump sum in cash or transfer it to a Locked-in RRSP. If the employee has sufficient service to be fully vested in the pension plan, the employee may opt to receive a company pension. This makes sense when the termination is due to a layoff.
Most insurance carriers allow employees to continue to participate in a health, dental and/or life insurance plan (though at a higher premium than they might have been paying as an employee). so you should have something from your carrier that outlines what options the employee has. COBRA (Consolidated Omnibus Budget Reconciliation Act ) exists in the US to enable employees to maintain health coverage while they are in transition.
Some employees may have been entitled to company equipment, such as a company car, phone, laptop/computer etc. Usually, the smaller items can be recovered while the employee collects his/her personal effects.
Of these, company-owned vehicles are probably the most difficult to recover – especially if the employee works outside the office. Since employees will use such vehicles as their primary mode of transport to and from work, if the employee works out of your main office, we suggest you have someone drive them home or arrange for (and pay for) a taxi to take them home. If the employee vehicle is away from your main office, contact your leasing company to determine how they wish to handle the return of the vehicle.
WORKING WITH AN OUTPLACEMENT COUNSELLOR
If you are using an outplacement counsellor, that person should be provided complete details on the employee’s exit package so the counsellor can go through it with the employee. You can also have someone from Human Resources sit in to help ensure all the employee’s questions can be answered.
This will allow the counsellor to explain the things that are probably topmost in the employee’s mind at this point: will I be paid? How much will I receive?, What happens to my benefits? How do I qualify for unemployment?
The counsellor is specially trained to assist the employee in handling the emotional impact of dismissal – whether it be grief or anger. Very few executives have such training or experience.
If you have agree to offer the employee an outplacement program as part of their severance package, the outplacement counsellor can explain to the employee what their options are and how to participate in the program. Most outplacement programs are modular and include such things as assessments, resume writing, networking and other job search skills. Often the program has some flexibility, so the counsellor can outline the options the employee can take – perhaps more resume support or interview coaching than the standard program – so the employee gets a program that matches his/her needs while also coming within the budget the employer has allowed for.
The outplacement counsellor will most likely suggest the employee take some time to review the company’s settlement proposal and suggest he/she have it reviewed by a lawyer to ensure it the employee’s rights have been addressed and to assess the fairness of the offer. Having a lawyer review the agreement is one of the employee’s fundamental rights: they do not have to immediately sign back on the company’s offer.
When one person is terminated, the office rumour mill will churn.
“Is this the first of many?” “Will I be next?” “What did Joe do?”
As soon as possible after the termination meeting, you should immediately have a staff meeting with those who need to know. Tell the staff briefly what happened and why so you can clear the air.
It’s important, once you have concluded the termination meeting, that you post an announcement so the entire office staff are informed of the employee’s departure and so that normal business routine is maintained. This actually is something you should have prepared in advance so you don’t lose time while trying to compose something. We recommend you do so using neutral language, otherwise the employee could have grounds to sue for defamation. Common phrases used are “… has left the company to pursue other interests” or “… has resigned from his/her position”. This allows the departing employee to save face with his/her peers while informing office staff the employee will no longer be part of the team.
The announcement should also specify how the functions of the employee should be handled internally. If the employee held a supervisory role, specify who the employee’s direct reports will report to. If you have a replacement selected, you can announce that.
Remember to brief your receptionist on what to say to outside personnel who call in asking for the terminated employee. He or she is the first contact most people outside your organization will encounter when they call or visit your office.
If the employee liaised with a number of people in other companies, it may be worth making a personal visit – or at the very least, a phone call – to each client, customer or partner to ensure continuity and to explain whom they should communicate with inside your company. If you have appointed a replacement/successor, then it is even more important to accompany them to meet with external contacts to help introduce them and pass the relationship on to them.
Consider having an auto-response email set up to inform people outside the organization that the employee they’ve sent an email to is no longer with the company. That’ll be much better than having incoming emails to that employee bounce and can be set up in advance so it can be activated during the termination meeting.
Usually, it’s best to have a staff member accompany the employee while he/she collects personal items from their office. This is to safeguard against an employee removing company documents or damaging company property. If the employee is especially trustworthy and professional, and the termination is more of a layoff than dismissal, you may want to consider allowing them to clean out their office without supervision. This shows trust in the employee and it will be noticed by other employees.
If the employee is comfortable with it, clean-up can be done immediately after the termination meeting. If the employee is concerned about image and/or privacy, make arrangements for the employee to come back in after hours, but ensure you have a staff member on hand to provide them access to the office and to supervise the collection and packing of personal items.
If you follow the guidelines we’ve presented here, you’ll be treating your employees fairly and significantly reducing your risk of being sued for wrongful dismissal. You’ll be helping your former employees move on so they can concentrate on finding their next opportunity. if the dismissed employee was a trouble-maker of under-performer, you might even see an improvement in morale among the remaining employees.
In this series, so far, we’ve discussed the process of terminating an employee in a professional manner. What if you’re thinking of leaving your current employer on your own volition?
There also is a professional way to quit, and we discuss that in the December issue of our newsletter, GRAY MATTERS. If you’d like to receive a copy, go to our CONTACT page and complete the form there.
SETTING the STAGE
The first thing you must do is to get the employee to the room where you will deliver the news that the employee will be terminated.
This can be done, for example, by sending someone to the employee to ask you to come to an urgent meeting with you. This is much better than personally confronting the employee in an angry tone and asking him or her to accompany you to an office (or worse – your office)
Let’s start by showing you how NOT to conduct a termination meeting, using a clip from “Up in the Air” , a 2011 movie starring George Clooney as an outplacement consultant who travels the globe, to illustrate.
Note how the meeting is being conducted via videoconference, not in person. The employee being terminated is in a room by himself. What’s worse is the people leading the termination are actually in the next room. This is an example of a very impersonal, callous way to terminate an employee.
Ms Keener doesn’t get to the point of the meeting(though we’re sure the employee knows) by leading off with saying we’re here to talk about your options. Her conversation doesn’t seem natural and the stilted delivery probably makes things even worse for the employee.
Last week (and as above), we suggested you do the termination in person. However, that does not mean you should do it alone.
We strongly suggest you have a third party attend the meeting to serve as an Observer.
This could be another employee who is at least one of your peers or it could be someone from Human Resources.
The Observer’s primary role is to serve as a third party who can substantiate the flow of the termination meeting should the termination result in a wrongful dismissal lawsuit. Underlying this, the Observer’s role is to verify the termination is done without prejudice or malice and that the employee’s rights and privacy were respected.
When you are ready to deliver the news, think about how you would want the news to be delivered if you were on the receiving end. Empathy for the employee’s situation will significantly reduce the stress for the employee – and for you as well.
It’s best to get right to the point and tell the employee at the outset that they are being terminated.
Usually, employees anticipate when they are about to lose their jobs, so, when they meet with you, they are waiting for the news to be delivered, and the longer it takes to hear the news, the more stressful the meeting becomes for them.
The best approach is to start out with something like, “ Good Morning, John/Jane. I’m afraid I have some band news to share with you. We have to let you go effective today.”
You should then describe the reasons for the dismissal. If it’s an economic decision, explain how the company has been faring. If it’s dismissal for cause, you must re-iterate the steps the company has taken with the employee to improve his/her behaviour and that this is the final alternative.
At this point, it’s important to convey that the decision has been made and is non-negotiable.
The whole meeting should last only 5 – 10 minutes and, once you’ve asserted the company’s decision is final, you should prepare to leave the room.
Before doing so, you should stand up, shake the employee’s hand, look them in the eye and thank them for their service/contribution to the company and wish them well in their new endeavours.
DO NOT say things like “You should have no trouble finding another job”. Not only can this backfire in a wrongful-dismissal lawsuit, it can sound dismissive of the employee and the emotional impact of the termination.
The best – and easiest – way to disengage is to have an outplacement consultant on hand who can either be brought into the meeting room or who could be waiting in an adjacent private office.
“I know this is a lot to absorb, so we’ve brought in John Smith from Outplacement Experts to help take you through the rest of the process.”
Here’s another clip from “Up in the Air”. Watch how diplomatically Clooney’s character, Ryan Bingham, handles a hostile employee.
Note how calm Bingham remains throughout the meeting. We think this helps him maintain control over the flow of the meeting and turn a negative situation into something constructive.
He makes a significant step in turning the meeting to a more positive tone by demonstrating that, although he is not an employee of the company terminating the employee, he has researched the background of the individual and identifies something the employee is passionate about. The meeting takes a more positive tone as Clooney’s character suggests the termination represents an opportunity for the employee to pursue something he IS passionate about.
You also see in this clip, how Clooney’s associate fails to engage the employee because her language is stilted and formal and comes across as academic instead of empathetic.
Because the Clooney character is a consultant brought in to do the firing, he also is prepared for the follow-up (you see this in other clips) and has a package prepared for the employee to review.
Normally, a termination is done one-on-one. A possible exception is when you are laying off large numbers of people, in which case you can bring an entire group (e.g., a shift crew) together to present the news. You’ll have to be prepared for an emotional backlash driven by group dynamics, in which case it’s important to remain calm to maintain control over the meeting. It’s probably a good idea to have breakout sessions immediately afterward – ideally one-on-one or at least small groups – so the employees can meet with someone from Human Resources who can answer their questions, guide them through their packages and provide some emotional support. In a layoff situation, it’s less about employee performance and more about company performance that has resulted in the layoffs. Be honest about prospects for a recall or how long the layoff might last. If the outlook is bleak, say so, and advise the employees to actively seek alternative employment so they don’t waste time by hoping for a recall and foregoing a job search while they exhaust their unemployment benefits.
The preparation remains the same; the execution is modified for the numbers involved and the situation.
So far, we’ve shown you how to prepare for a termination and how to present this to an employee.
Next week, we’ll take you through the aftermath, to show you some of the things that must be done under regulation as well as some things that go beyond what is required under law.