BLR s Human Resources Training Presentations

Transcription

1 BLR s Human Resources Training Presentations The Termination Process This training session will focus on what you need to know from the legal issues to the practical steps involved when handling the termination process. Firing an employee is probably a supervisor s most unpleasant responsibility. No matter what the reason for the termination, misgivings, resentment, bitterness, and other strong emotions usually surface. To further complicate matters, discharging an employee isn't as straightforward as it used to be. Congress and the courts have greatly expanded employees' rights in recent years, resulting in greater employer liability. A combination of federal and state laws, and numerous court decisions designed to protect employees, have limited employer s rights to terminate. Of all the different phases of the employment process hiring, training, promoting, discharging discharging is the most legally challenged. Termination decisions account for roughly half of all job discrimination claims filed with the federal Equal Employment Opportunity Commission. Before you fire an employee, you should have exhausted all other possibilities through appropriate progressive disciplinary actions, and have documented the case thoroughly. 1

2 Goals Recognize the many laws that place restrictions on the termination process. Know the four steps of progressive discipline and how to implement them. Be prepared to handle the compensation and benefits aspects of a termination. Learn how to conduct an exit interview. We ll begin this session by looking at how many different laws impact the termination process. Then, we ll discuss the four basic steps involved in progressive discipline. Are you clear about how to handle the compensation and benefit issues that must be addressed at the time of termination? We ll go over those during this session. Finally, we ll conclude this session with important information about exit interviews and how you can make the most of them. 2

3 Legal History Breaking with tradition Laws Fair employment Legitimate and nondiscriminatory reason Under the traditional doctrine of employment at will, individuals without an employment contract serve at the pleasure of the employer. The employer has an absolute right to fire them at will for any reason or for no reason. Some states still are employment-at-will jurisdictions, and, in those states, employers retain this enormous power. But the trend is definitely running against the employment-at-will doctrine. In unionized workplaces, employers bargain with labor unions, and there are rigid procedures for taking discretionary action and challenging disciplinary decisions. Congress passed laws in the 1930s expanding employees rights. Employers were forbidden to fire people for their union activities. Federal fair employment laws that included explicit anti-retaliation provisions came next. Under these measures, employers are barred from retaliating against workers who file discrimination complaints or who oppose discriminatory practices. In the past decade, state legislatures began enacting numerous whistleblowing laws that protect employees that engage in certain activities, such as filing civil rights charges, wage/hour complaints or workers compensation claims, serving on a jury, or reporting safety violations. Today, judges and juries look at the circumstances of an employment action to determine whether an employer had a legitimate, nondiscriminatory reason to fire the employee. 3

4 Restrictions on Termination Today, there is less emphasis on employment contracts But sometimes promises of employment are made unintentionally Some types of promises can put employers in unwanted contractual relationships In the past, an employment contract was generally understood to be a set of written agreements signed by the employer and the employee. There is much less emphasis on written agreements than there used to be. Today, however, employers are more likely to be held by commitments they weren t even aware they had made. For example, employers may find themselves bound to promises made by a personnel manager at an initial interview, or by the head office in an employee handbook, or even by a manager in a memo posted on a company bulletin board. Often, the promise whether real, implied, or imagined means the employer cannot discharge the employee except for good cause. Although the enforceability of such promises varies considerably from state to state, employers in every state should be extremely careful about the promises and representations they make. Certain types of promises can put an employer in an unwanted contractual relationship and can take away whatever right it may have had to fire people without cause. 4

5 Restrictions on Termination (cont.) Title VII of the U.S. Civil Rights Act prohibits retaliatory discharge Other federal laws also protect employees from retaliation A number of states have reference immunity laws Although most laws concerning retaliatory discharge are state enactments, the federal government also prohibits employers from firing people for certain kinds of activities. Title VII of the U.S. Civil Rights Act prohibits employers from retaliating against employees who oppose any unlawful employment practice or who make a charge, testify, assist, or participate in any investigation, proceeding, or hearing under the law. Similar job protections are extended to employees under the Age Discrimination in Employment Act, Family and Medical Leave Act, and Americans with Disabilities Act. Employers may also be held liable for retaliation under Title VII when they provide negative employment references for former employees. On the state level, an increasing number of states have enacted job reference immunity laws that exempt employers from liability for giving out accurate job reference information to prospective employers. Under federal labor laws, employers are forbidden to discipline workers for banding together in order to bargain with the employer. Under the Occupational Safety and Health Act, employers may not impose discipline in retaliation for the filing of a complaint about work safety. Employers are prohibited from disciplining employees for making complaints about wage and hour violations. The Whistleblower Protection Act of 1989 prohibits discrimination against federal employees for reporting unlawful activities. 5

6 When It s Safe to Terminate Three examples of legitimate reasons for discharge: 1. For acts listed in employee handbook as cause for discharge, such as sabotage. 2. For acts listed in employee handbook as cause for discharge following progressive discipline steps. 3. Poor performance that follows warnings, performance appraisals, etc., for which the employee has had the opportunity to correct. Despite all the laws and court rulings favoring employees, you can still fire someone relatively quickly for incompetence or misconduct. Examples of legally permitted reasons for termination include: Acts listed in employee handbooks or in published plant rules as cause for immediate discharge (e.g., attacking other employees, insubordination, working under the influence of alcohol or narcotics, sabotage.) Acts listed in employee handbooks as cause for discharge following progressive disciplinary steps, if those steps were followed. Misbehavior or poor performance documented in warnings, performance appraisals, etc., that the employee has had a chance to correct. No matter what you base termination decisions on, be sure to always treat employees evenhandedly. For example, you will be safer ground legally if you always handle alcohol use on the job in the same manner. 6

7 Termination Preparation The four steps of progressive discipline: 1. Verbal warning 2. Written warning 3. Suspension 4. Discharge Progressive discipline is discipline in steps, by handing out light punishment for a first offense and progressively harsher penalties for subsequent offenses. Typical progressive-discipline systems follow four basic steps: 1. An oral warning or counseling session. Issue a verbal warning and get employee agreement on a plan for correcting behavior. 2. A written warning, usually entered in the employee's formal work record. Fill out the warning form objectively. State the specific rules violated, date, time, place, and other facts. Work out a corrective action plan with the employee and add it to the warning form. Sign the form and ask the employee to do so. Note any refusal to sign on the form with comments such as Reviewed with employee who refused to sign. 3. Suspension or unpaid layoff ranging from a few days to a few weeks. This last-resort step lets the employee think over the seriousness of the offense and hopefully commit to change. It also lets the supervisor and HR decide if further discipline is necessary. Document all actions and meetings on forms signed by you and the employee. 4. Discharge. Act only in consultation with HR and, where appropriate, after the other escalating disciplinary steps. Work with HR to follow all company termination procedures, assemble documentation that can stand up to legal challenge, and prepare all necessary information and paperwork. 7

8 Termination Preparation (cont.) Make full use of performance appraisals Avoid inflation Keep detailed documents In addition to being a very important part of the personnel process, a good appraisal system also provides documentation of substandard performance. In many companies evaluation inflation remains a problem. Keep in mind that if an employee s evaluations have been excellent (at least on paper) for years, it is going to be difficult to justify a termination on the basis of one or two poor ratings. Be sure to maintain complete records of incidents. It is exactly this kind of documentation that could make the difference when it comes to justifying a discharge. Make sure that all documentation is consistent with your expectations and discipline. In other words, ads for jobs, job descriptions, evaluations, policies, handbooks, etc., should have consistent expectations of employees. Be wary of discipline if the reasons for your disciplinary action conflict with other correspondence available in the company. 8

9 Is Termination the Right Course of Action? Keep in mind, termination may create more problems than it solves. Before you proceed, carefully consider the ramifications. Many of the legal issues associated with termination are complex; however, there are several particular situations that should alert you to possible problems. Here are the basic questions you must ask: Are you moving too fast? These issues have to do with giving proper notice and having proper documentation of the situation. Do you have the records you need? Questions here center on the issues of progressive discipline, performance evaluations, and fairness of treatment. Does it look as if you re out to get this employee? The important factors here are those like length of service, pension vesting, retaliation, and so on. Is there a possibility of discrimination? Be sure to ask yourself questions about the appearance of discrimination on the basis of sex, marital status, national origin, religion, disability, or age. 9

10 Are Any Alternatives Available? Your decision to terminate may be clear-cut. However, sometimes other alternatives may be an option. For example, instead of discharging an employee, you may be able to: Reassign the employee to another position Provide further training Send the employee to counseling Suspend the employee Naturally, there are clear-cut cases where termination is the only alternative. In many cases, however, there may be other possibilities to consider. Reassignment. If the situation involves poor performance, are there other positions for which the person might be better suited? Further training. Is it possible that the employee could perform well with the benefit of further training? Counseling. Has anyone talked to the employee about the problem? Often, difficulties at work are reflections of other problems the organization may be able to help with. Suspension. This may be a good alternative in the case where you have an employee with good skills and potential who has stepped out of line. 10

11 The Termination Meeting Who will handle the termination? Where will it take place? Firing an employee is never easy. It is a stressful situation for both the worker and the supervisor who must do the firing. The more advanced planning you do, the better the chances are that things will proceed smoothly. The first decision that needs to be made is who will do the firing. This is usually the supervisor of the employee or the person who was responsible for hiring the worker. Have a definite location set for where you will inform the employee. This should be in an office, conference room, or any other private location where no other workers can hear what is going on. Under no circumstances should co-workers be within hearing distance of a termination conversation. If you need to reserve the room, you should set aside up to 30 minutes for the meeting. Arrange to have someone from the next management level present, unless company policy says otherwise. If you believe there is a possibility for violence, have a member of Security sit outside the meeting room. 11

12 The Termination Meeting (cont.) When will the meeting take place? What exactly will you say at the meeting? Determine ahead of time what time of day and which day of the week you wish to do the firing. Some employers choose the end of the day in order to keep the peace for other workers. But that may be difficult, particularly for the supervisor who knows what will happen at the end of the day. Your decision here should be based on doing what is best for the employee. Know what you will say to the employee ahead of time. Rehearse your opening statements, if necessary. Bring notes or a checklist, if necessary. Make sure you tell the employee he or she is being fired and why. Give true reasons for the action; don t try to sugarcoat with untrue reasons that could later lead to legal challenges. Make sure the employee understands that your decision is final and nonnegotiable. Be respectful, not angry, sarcastic, or insulting. State the date and time employment ends. Give the employee a chance to vent his or her feelings. Respond calmly and quietly to emotional reactions. Give the employee a list of what he or she is entitled to (e.g., severance pay, COBRA, outplacement services). Tell the employee what you need from him or her prior to departure (e.g., keys, credit cards, laptop computer). 12

13 Compensation and Benefits COBRA protects workers from losing their health insurance when they lose their jobs. COBRA is intended to be a stopgap until the terminated employee finds insurance from another source. The discharged employee must be allowed to continue insurance coverage for 18 months. COBRA is a federal law that was enacted to ensure that employees and their dependents do not lose their health insurance when workers lose their jobs. COBRA requires group health insurance policies to permit group members to continue their insurance when they leave the group for any one of a number of reasons. COBRA s protections are temporary and are intended as a stopgap until insurance is obtained from another source, such as a new employer. COBRA applies only to employers of 20 or more. In some situations, insured employees have continuation rights under both state and federal law. In such cases, employees may choose the more favorable law. Under both state and federal laws, continuation requires the insured pay the full premium (including the former employer s share), but the insured does get the advantage of cheaper group rates. The length of time an insured must be allowed to continue coverage for termination of employment is 18 months unless termination was for gross misconduct. This includes coverage for the employee s spouse and dependent children. If any beneficiary was determined to be disabled within 60 days after termination, coverage is continued for 29 months for all beneficiaries. Detailed recordkeeping is crucial for COBRA compliance. 13

14 Compensation and Benefits (cont.) Severance packages are most common when employees are separated as part of a reduction in the workforce. Employers usually base severance on length of service. Many state laws govern how employees must be paid for accrued but unused vacation pay. Federal law does not require nonunion employers to give terminated employees any kind of severance pay; however, many employers do so voluntarily, especially for permanent layoffs. Federal labor law does require unionized employers to bargain over severance pay when a unionized plant is shut down. Generally, larger employers have formal termination policies, including allowances for severance pay. However, many employers have an informal means of determining the amount. Severance pay is most common when employees are separated as part of a reduction in the workforce. It is least common when employees quit or are discharged for cause. Employees who are terminated for poor performance are sometimes given severance in lieu of notice to avoid retaining, even for a brief period, individuals whose behavior has the potential of damaging general employee morale. Employers usually base severance on length of service, most often one week s pay per years of service. Some companies pay a fixed benefit amount, either one week s pay or two week s pay. Some companies combine length of service with other factors such as employee classification. The most common form of payment is a lump-sum. Some companies pay installments, and others offer a choice of a lump-sum or installments. There is no federal law requiring employers to provide paid vacations for employees. However, there are many state laws that govern how employers administer vacation time, including whether and how much employees must be paid at termination for accrued but unused vacation. 14

15 Final Paycheck and Company Property No federal law regulates payment of final wages Pay questions Minor accounts W-2 Securing company property There are no federal laws regulating the payment of final wages, although many states have such laws. Many employers pay immediately in the event of a termination, and on the next regular payday in the event of other separation, including layoff. Payment is often made by mail. Questions about vacation pay, severance pay, and any debts or obligations to the company should be established as definitely as possible and as soon as is practicable. If there are minor accounts between employer and employee, such as reimbursement for lost property or repayment of a loan, settle at separation. If the amount is substantial, have the employee pay off the sum separately. The W-2 form may be issued at any time after termination but no later than January 31 of the following calendar year. To protect company property, assign someone preferably, security personnel to escort the employee off the premises. 15

16 Layoffs and Shutdowns Legalities Discrimination issues Continued health care WARN Although any time an employee is discharged there is a risk of a wrongful discharge lawsuit, economic layoffs caused by deteriorating business conditions create fewer legal risks than terminations of specific employees, if decisions are made equitably. Employers must be very careful about making promises to employees, either in writing, orally, or through conduct. Employee handbooks and policy statements should avoid statements about continuing job rights. Representations about rights in the event of a layoff can create contractual obligations and should also be avoided unless they are carefully thought out, and the employer is 100 percent committed to carrying them out. Careful termination procedures should be followed if there is no reasonable expectation that employees will be called back within a month or so. Employers should inform employees of their rights and benefits under health insurance and other benefit programs. Layoff decisions should be made according to objective, business-related criteria that are consistently followed. Every layoff decision should be documented; supervisors and managers must explain and justify how the decisions were made. Layoff lists should be reviewed by management to ensure that the procedures are being fairly and uniformly applied. Employers must be particularly sensitive to discrimination issues. After layoffs have been proposed, it is wise to compare percentages of particular groups being laid off against the workplace population in general. It is extremely important no group be singled out in a layoff situation. The federal health care continuation law, COBRA, requires employers of 20 or more employees to allow employees to continue their group health insurance after being terminated for any of a number of reasons, including some layoffs. The federal Worker Adjustment and Retraining Notification Act (WARN) requires employers who are about to lay off large numbers of employees, close a plant, or reduce work hours beyond a certain point, to give employees 60 days advance notification of these plans. 16

17 The Exit Interview Use as a reality check Benefits Explain company policies relating to departing employee Ensure the return of company property I. Background for the Trainer: Provide participants with an exit interview form, if your organization uses one. I Ideally, employers should conduct exit interviews with all employees leaving the company. Sometimes it may not be practical to conduct interviews in cases of major layoffs or discharge for serious misconduct. An exit interview is a voluntary conversation between a departing employee and a representative from the company. Employees who leave voluntarily or involuntarily are sources of valuable information. But the real value of the exit interview is for the employer, who can use it as a reality check, a trend-spotter, and an informal but significant review to see how the company is doing. Properly conducted, the exit interview provides the employer with the opportunity to: Discuss and clarify the reasons for the termination. Clarify pay and benefits issues (e.g., receipt of the last paycheck, the amount of unused vacation, conversion or continuation of benefits terms of a severance package). Explain company policies relating to departing employees (e.g., trade secret confidentiality, freelance work). Ensure the return of keys, security cards, and company property. 17

18 The Exit Interview (cont.) Obtain information and feedback about management practices Determine the best time to conduct the exit interview Choose a neutral setting Get the most from an exit interview by using a form Obtain information about improper or questionable management practices connected with the employee s termination. Obtain information about a supervisor s management skills. Obtain feedback about employees opinions and attitudes about the company. Protect itself against subsequent charges that the employee was forced to resign. The exit interview should take place on the employee s last day. The exit interview is sometimes more effective when done a short time after the employee has left because the interval allows the employee to think about the answers free from the pressures of the workplace. The interview should be conducted in neutral, informal, and pleasant surroundings so that employee feels comfortable. An exit interview form can enhance the value of the interview. A form helps guide the interviewer in asking questions and eliciting employee opinions. The form serves as a written record of the information gleaned and gives the company something to work with when analyzing termination trends. Many employers collect information from exit interviews, look for trends in the responses, produce periodic reports, and then distribute the reports to supervisors and managers. 18

19 Quiz 1. Employers are required by law to do an exit interview. True or False 2. All terminated employees are entitled to continued health care coverage under COBRA. True or False 3. What is employment at will? 4. It is perfectly acceptable to issue a letter of termination to an employee without a face-to-face meeting. True or False 5. What is an illegal retaliatory discharge? 19

20 Quiz (cont.) 6. Only former employees are allowed to continue health care coverage under COBRA, not their families. True or False 7. Which employers are not covered under COBRA? 8. During a massive layoff, it is okay to tell employees about their benefits and health insurance. True or False 9. What is progressive discipline? 10. How many days notice must an employer give employees under WARN when the employer is planning a large layoff? 20

21 Quiz Answers 1. False. Doing exit interviews is voluntary. 2. False. Employees are not entitled to continued health care coverage if fired for gross misconduct. 3. Either party may end the working arrangement at any time, for any reason or for no reason. 4. False. You should always do so at a face-to-face meeting. 5. When an employer fires an employee for participating in a protected activity. 21

22 Quiz Answers (cont.) 6. False. Dependents are also covered. 7. Employers with fewer than 20 employees. 8. True. Employers should inform employees of all their rights and benefits. 9. A method of imposing discipline in steps. 10. The WARN Act requires 60 days advance notice. 22