How to terminate an employee ǀ BDC.ca
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6 steps for terminating an employee

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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 forced to rehire the employee or pay damages.

“Cases that end up being disputed are usually where a problem has not been addressed and there is no back-up documentation,” says Geneviève Desmarais, BDC’s Assistant Vice-President of Legal Affairs. “Without proper documentation to support a decision to terminate, it becomes a question of ‘he said, she said’ and the burden lies on the employer to demonstrate the termination was made for a just and sufficient cause and was properly conducted.”

You can help ensure a smooth termination of employment by following these steps.

1. Let employees know where they stand

An employee shouldn’t be surprised that he or she is being fired. 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 performance or behaviour.

Keep your notes in the employee’s file.

2. Develop a plan and timeline for improvement

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

“After every discussion of this type with an employee, follow up with a written recap of the conversation in an email or on paper,” Desmarais says. “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 will be terminated, 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 total compensation the employee earned upon termination. If you have an employment contract, it is a good idea to verify if a termination clause settles the question of severance.

“The severance depends on many criteria including the circumstances surrounding the hiring and firing, the employee’s age and experience, the position held and length of service with the organization,” Desmarais says. “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

“Never terminate an employee over the phone or by email,” she says. Instead, be brief and to the point in a face-to-face meeting.

Depending on the situation, you may want to have a witness. 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 firing 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 fired 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 have presented the employee with a severance offer, he or she should be given time to review the information you have provided. “You shouldn’t expect the person to respond right away, but should give them at least a few days to review the details, consult their advisors, and get back to you,” Desmarais says.

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

Desmarais recommends that entrepreneurs have workers sign an employment contract when they’re hired. This should outline working conditions and severance to be paid in case of termination.

“An employment contract makes things clear from the start and helps you avoid problems down the road. Consult a human resources specialist or a lawyer to make sure your contract respects applicable legislation and is valid.”

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