What Should HR Prepare before Terminating an Employee?

May 23, 202210:48 am5436 views
What Should HR Prepare before Terminating an Employee?
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Terminating an employee is one of the most uncomfortable, yet necessary, tasks that a company must do when the going gets tough. Things can get heated during the process and depending on the circumstances, it should be handled carefully so as to maintain the employee’s impact on relationships, productivity, and morale. Oftentimes, HR should deal with the court and legal problems when they come unprepared for their employee’s dismissal. If you have ever been or are currently in the same situation, here are some tips to legally terminate your employee. 

Review your company policy and employee handbook

Each employer must have an employee handbook, company policy, and employment policy. Before talking about terminating employees, do read the company’s policy on termination and dismissal. Does the reason for termination align with your company’s rule? Have you fulfilled all the requirements for the dismissal? 

After that, make sure you review your employee handbook to avoid misunderstanding or confusion. This should also be done to ensure that your employee handbook and employment policy are in line.  Hence, you can lessen the chance of legal problems in the future. 

Inform in Prior

An employee should not be shocked if he or she gets to cut loose. Never fire employees over the phone or over email. Instead, do it in a face-to-face meeting while being informative and to the point. You may want to have a witness depending on the circumstances. However, do not involve the employee’s colleagues. Choose a third party who has no conflict of interest, such as the person in charge of human resources. Whether the employee is underperforming or not working well with their team, you must be open about any problems that arise. Make detailed notes regarding issues such as customer complaints, unacceptable behavior during meetings, missing deadlines, or inability to fulfill specific goals. 

Handle with Care

Remain cool, give the employee time to vent, and then reiterate the message if the individual replies with rage. Show sympathy and empathy to someone who reacts emotionally to the news, but then returns to the company message that he or she is being terminated from the job. Avoid phrases like “I know how you feel” or “it will be okay,” because it is not okay for them, and saying such things will just belittle their feelings. Remember that stress might make it difficult for an employee to absorb all of the information you provide, so have a folder of relevant items ready for him or her to review later.

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Strategize an Exit Plan

As an employer, when seeing your employees are underperforming, you should not put all the blame on them. You should first ask and self-reflect on the company culture. It can be that your employee is undergoing a family problem and there is no support from the employer. Or, your employees might be disengaged because the company fails to provide well-being or growth programs. After you understand the reason, make sure you do everything to help employees out of their situations and document everything possible of your effort. That said, when it comes to terminating employees, you can showcase that you have done your best to help the said employees. 

You can also put the difficult employees on a Performance Improvement Plans (PIP) program to help them go through their tough situations. PIP programs are often launched by managers to give underperforming employees the opportunity to succeed in their job. It can be an effective way to address employee’s failure who are unable to meet specific job goals or to ameliorate behavior-related concerns. If you want to conduct a successful PIP, see the steps here

Keep a Thorough Documentation

While it is necessary to act decisively when terminating an employee, it is just as important to fully prepare for the termination meeting ahead of time. Prepare a termination letter and have it reviewed by counsel before the meeting. Moreover, make sure that you have estimated and arranged all severance, leave, and other compensation owed to the employee. Severance is influenced by a lot of factors, including the factors that impact hiring and termination, the employee’s age and experience, the position performed, and the employee’s length of service with the company. The severance payment must never be less than the statutory minimum. It is usually best to consult with a lawyer or a human resources consultant.

 Review the state law 

State employment law is constantly changing, thus, there is a great chance that the termination law has also been renewed by your government. Therefore, you should once again read your country’s law about employment practices before terminating difficult employees. Here is a short review of termination law in Indonesia, Singapore, Malaysia, and India. 

  • Indonesia 

Termination of employment in Indonesia is regulated under Labour Law and Law No. 2 of 2004 of the Settlement of Industrial Relations Disputes. GBG Indonesia mentioned that there are two termination practices, including termination with cause and termination without cause. In addition, an employer should provide severance payments (Manpower Law No 13 the Year 2003) depending on the length of work of the terminated employees. A 30-day notice period must also be given to terminate an employment contract. 

  • Singapore 

MOM Singapore divided termination into four parts, including termination with notice, termination without notice, termination due to employee misconduct, and wrongful dismissal. Termination with notice means employers should give termination letters to employees days or weeks before the dismissal. The days and weeks are depending on the lengths of service of employees. Employers and terminated employees must also make CPF contributions for salary earned during the notice period. 

Termination without notice can happen in such a situation when an employer breaks the terms of the contract, the employer fails to pay salary, and employees take absences without valid reasons. In this case, employers still need to pay monetary compensation for terminating the contract before a specified period. This, however, is not covered by the Employment Act. This is only based on the contract of service between employer and employees. 

Termination due to misconduct is a serious disciplinary matter that should be handled carefully. Employers must conduct a formal inquiry before taking any disciplinary action. Once the misconduct case is found, termination can be done without notice, and no salary in lieu of notice will be paid. Wrongful dismissal is meant for employees who think they have been wronged by employers for the termination practice. 

  • Malaysia 

According to the Department of Labour Peninsular Malaysia, there should be a notice of termination unless dismissed for misconduct or poor performance. The minimum length of the notice period should be an agreed term in the employment contract. Employers can serve a garden leave to employees during their notice period. In addition, only employees under the Employment Act are entitled to statutory termination benefits upon retrenchments. Employees under non-Employment Act are at the discretion of employer for retrenchment benefits unless provided.

You may have tolerated disappointing performance for months in the hope that the situation will improve on its own. However, things just do not work out and you need to take action by terminating one of your employees. Now that the end is near, prepare the transfer to minimize the potential amount of chaos to the company and employees. Explain the grounds for termination openly and courteously, avoiding quarrel on the subject. Carry out the termination with empathy, seeing them as a person rather than a commodity. Best of luck!

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