Logo - Business Development Bank of Canada - BDC

6 steps for terminating an employee

4-minute read

It’s never easy to terminate an employee, but most entrepreneurs have to face the task at one time or another.

When you terminate an employee, you want to avoid repercussions such as being pursued for wrongful dismissal and being held liable to pay damages or reinstate the employee following an unjust dismissal complaint.

Following these steps can help to better manage the termination process.

1. Let employees know where they stand

An employee shouldn’t be surprised that she or he is being dismissed. Whether the employee is not performing up to standard or does not work well within their team, you need to be clear about problems as they occur.

Take notes so you can provide precise details about issues such as customer complaints, inappropriate behaviour during meetings, missed deadlines or failure to meet sales targets. Meet with the employee and give examples of problems regarding their performance or behaviour.

2. Develop a plan and timeline for improvement

Whenever possible, develop an improvement plan with the employee, and be clear about when you expect to see changes. Set realistic goals that are measurable.

Discussion of this type with an employee should be followed up with a written recap of the conversation in an email or on paper. State what is expected of the employee and when. Be encouraging. State you are confident the employee will make the necessary improvements, but also be clear on the possible consequences if the employee fails to improve.

3. Prepare documentation

If the employee fails to improve and you intend to proceed with the termination of employment, have your documentation ready. You need to prepare a written notice of termination and determine if a severance is necessary.

Calculate the proper severance based on the employee’s total compensation the employee earned upon termination. If you have an employment contract, it is a good idea to verify if the contract addresses the issue.

The severance depends on many criteria, including the circumstances surrounding the hiring and firing, the employee’s age and experience, the position held and the length of service with the organization. The severance can never be less than the minimum provided by employment legislation. It’s always preferable to check with a lawyer or a human resources specialist.

4. Hold a face-to-face meeting

You should never do terminations of employment over the phone or by email. Instead, be brief and to the point in a face-to-face meeting.

Depending on the situation, you may want to have a third person present. But don’t drag the employee’s colleagues into it. Choose a neutral party, such as the person responsible for human resources.

5. Allow the employee to leave with dignity

After the meeting has taken place, depending on the situation, the employee may be asked to stop work right away or be required to work a termination notice period.

You should make sure a dismissed employee is allowed to leave with dignity. For example, there is usually no reason to prevent a departing employee from personally packing up his or her belongings and saying goodbye to coworkers. And there is certainly no need, under normal circumstances, to have someone escorted to the door by a security guard or supervisor.

Additionally, if you present employees with a severance offer, give them reasonable time to review the information you have provided and consult their advisors.

6. Get off to a good start for an easier end

An employment contract that outlines working conditions makes things clear from the start and helps you avoid problems down the road. Make sure to include the obligations of the parties upon termination of employment. Consult a human resources specialist or a lawyer to make sure your contract respects applicable legislation and is valid.

Next step

Create your own guidelines to promote a safe and respectful work environment by downloading our Code of conduct and zero tolerance policy templates.

Your privacy

BDC uses cookies to improve your experience on its website and for advertising purposes, to offer you products or services that are relevant to you. By clicking ῝I understand῎ or by continuing to browse this site, you consent to their use.

To find out more, consult our Policy on confidentiality.