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Blog: Discipline and Termination: Offsetting Liability

By September 15, 2018 July 24th, 2019 Blog

Disciplining: Never fun, always necessary.

One aspect of business ownership and management which is an unfortunate necessity is the idea of discipline and termination. Sometimes, things happen at work which require the disciplining of an employee.

That discipline can sometimes lead to employees being terminated from the business entirely. From a human resources (HR) perspective, it can be favorable at times to rush through the process of terminating an employee to get it over with as quickly as possible. Rushing things in this situation is a mistake. Instead, termination processes should be in place ahead of time, just like onboarding processes are.

Have a plan

According to statistics from the Equal Employment Opportunity Commission (EEOC), more than $525 million was secured for victims of terminations stemming from employment discrimination in 2015. Additionally, over half of wrongful termination lawsuits are won by former employees. With statistics like that, and how expensive penalties and lawsuits could potentially be for your business, it is clearly important to have a plan in place and offset some of that potential liability. With a clear termination process, you ensure that employees part with you on good terms and that your company is protected from liabilities in the future.

What’s a business owner to do?

Consider including the following in each employee personnel file in order to further protect your business:

  • Employee handbook acknowledgement, signed by the employee.
  • A progressive discipline policy which outlines clear steps in the process.
  • Documentation of performance, including performance failures. This is essential if you are terminating employees due to past performance issues.
  • Documentation of all warnings or suspensions the employee has received.
  • Statements regarding infractions (reported by managers or co-workers).
  • Attendance records.
  • Termination letter confirming details of the termination and what the employee needs to know.
  • Employment dates.
  • Formal performance reviews.
  • Workplace posters – not necessarily in the file, but around the workplace. These will explain unemployment benefits and compliance information.

Above all, when terminating an employee, having tact is essential. The employee should already be aware that there is an issue and usually should have already been given ample opportunity to improve. If that has not succeeded, preparation should begin for the termination, including review of personnel files and associated policies. Communicate with HR and IT to find out what needs to be done regarding work related devices and access. Meet the employee in person in a private location and keep it short. Be honest, communicate about benefits, and treat the employee with respect. Finally, consider having security on hand just in case things go badly.

Let’s talk

Having a plan in place for terminating employees and being strict about company policies and documentation is essential to success in offsetting potential liabilities. For help reviewing your current discipline and termination policies (or developing new ones), contact the Sterling Insurance Group Business Insurance Team: 888.525.7575.