Law and Regulations When Firing an Employee

Letting go of an employee can be one of the hardest things any employer can do, but if the reasons are justifiable, then it is a perfectly legal and acceptable course of action to take. With that in mind, terminating an employee is not a decision to be taken lightly when running a business; making a calculated judgment means taking into account the numerous potential costs that come with letting an employee go, as well as the potential legal ramifications. Businesses today often fear the possibility of a lawsuit when letting a worker go, and they can incur extra costs if the matter is brought to court.

As with any important business decision, firing an employee first requires a good reason. This could be due to poor performance, misconduct or the lack of demand for the position an employee holds, whereby it becomes disadvantageous for a company to keep him or her. However, it is important to stay within legal boundaries, so firing an employee based on personal reasons or discrimination is always unacceptable. Firing employees on the spot for misconduct is also a legally risky move; it is always better to investigate an incident, gather evidence and ask the employee in question to explain their actions. These steps may add some length to the termination process, but they only help an employer in the long run to avoid the risk of legal action being brought against them.

In extreme cases where termination matters risk being taken to court, employers may consider settling the matter directly with the employee in order to avoid excessive legal fees for the company. A settlement allows an employee to leave the company without being fired, and to receive a payment in return for signing away their right to take future legal action. Even in cases where a company is confident they would win the case in a tribunal, it is usually the cheaper option to pay a settlement and save the company from an unnecessarily lengthy process.

In the difficult case where an employee is part of a trade union, it is still possible to let them go. Many union collective agreements state that an employee can only be dismissed under ‘just cause’; essentially this means the basis for the termination of the employee must adhere to the aforementioned points in this article to ensure there are no legal quarrels. Giving an employee severe notice before firing them is especially important in this case, as well as written evidence and previous performance reports to present to the union. Unions will normally demand that employers make an effort to discipline or give a fair chance to employees before firing them, which is why it is good practice to ensure that good evidence of this is kept.

In any case when firing an employee, it is useful to weigh up the potential disadvantages such as the cost of replacing an employee, training a new one and the potential temporary disruption it may cause to everyday operations, where colleagues may be expected to make up for the lost workload. In addition, firing an employee can also potentially affect employee morale and the reputation of a company, depending on the circumstances.

All in all, letting an employee go needs careful deliberation, while taking into account the potential legal issues and costs that come with the process. Even if the reasons are just and fall within legal jurisdiction, it should only really be used as a last resort because of the drawbacks it can cause for a business. Paying attention to legal rights and giving sufficient warning should allow for an otherwise tedious termination process to turn out better for employers.

Edward Mah

Sources
www.lexology.com/library/detail.aspx?g=05eb272e-df3f-4f03-b5ff-84ff7f58c946
http://www.xperthr.com/topics/labor-relations/unions/union-employee-layoff/
http://www.hrreporter.com/columnist/hr-policies-practices/archive/2015/08/11/is-it-really-impossible-to-fire-a-unionized-employee/
http://www.ehow.com/info_11415369_advantages-disadvantages-laying-off-employees.html