The ethics of firing an employee can be quite complicated and can have a direct impact on many aspects of a business. Whether you are a business owner, a CEO, a CFO, or a department manager, it is almost inevitable that eventually it will become necessary to terminate someone’s employment. Thinking about how this should be done, what laws may govern the process, how it will impact the morale of other employees, and other factors is very important.
Ethical Obligations Prior to Termination
Firing an employee should only be done as a last resort. Your ethical obligations toward an employee in this situation will depend largely on the reason they are being terminated. The three most common reasons why someone will be fired is because of poor job performance, a negative attitude, and because their position is no longer needed.
Firing Due to Poor Performance
When firing an employee because of poor performance, the right thing to do is make sure that you have given them every chance to succeed. This means making sure they are aware of the issues you have with their performance and giving them opportunities to improve. In some states, it is legally required to go through specific steps prior to firing them. Even in ‘at-will employment’ states, however, it makes sense provide struggling employees with the following things:
Additional Training – The first thing that should be done with an employee who is struggling with poor performance is to provide them with additional training. If they can learn how to do their job properly, then termination won’t be necessary.
Written Explanation of Issues – Documenting the areas where an employee is failing to perform will not only ensure they know what they need to do to improve, but also serve as just cause on the termination should that be the only option.
Reasonable Time to Improve – An employee must be given time to make changes to their performance.
Option to Change Jobs – If possible, it may make sense to give an employee the option to move into a different role within the company. Just because one job isn’t a good fit doesn’t mean they won’t be able to contribute effectively in another.
Firing Due to Attitude
When an employee has a bad attitude it is a good idea to fire them before it causes problems with other employees as well. A bad attitude can include things like arguing with co-workers, treating customers poorly, having a lack of work ethic, or being disrespectful of management. Of course, you will still need to provide them with an opportunity to change. As soon as someone displays a bad attitude at work, you need to take action. Letting this type of thing drag on for weeks, or even months, will make the issues far more challenging.
After giving the employee corrective counseling, they should be terminated if their attitude doesn’t improve right away. This will not only help to remove the negative influence from the workplace, but it will also set the standard for a positive attitude in the workplace.
Firing Due to Downsizing
Terminating someone because it becomes necessary to downsize is often the most difficult because it is typically not the fault of the employee. Regardless of the reasons, however, it is typically best to alert the employees as soon as possible so they can start looking for employment, filing for unemployment benefits, and plan their lives.
It is the ethical responsibility of the employer to do everything possible to make the process as painless as possible. This means providing employees with letters of recommendation, filing out any information requests from the unemployment offices, and more. While it may be difficult, downsizing is a often a part of being an employer so being ready is critical.
Is Your State an At-Will State?
As an employer it is important to know the legal requirements when it comes to firing an employee. People generally talk about whether or not a state is an ‘at-will employment’ state. This implies that each state either does, or does not, have laws governing the termination of employees. In reality, all states recognize that employers have the right to fire employees. Some states, however, have certain restrictions. They are generally broken up into the following three:
Public Policy Exemption – This exemption applies when an employee can show that they were wrongfully discharged in violation of a well-established public policy of the state. An example of this would be firing an employee because they refuse to break the law, or after they are injured on the job (through no fault of their own).
Implied Contract Exemption – This exemption applies when employers require employees to sign a contract or employee handbook that says they will only be fired for ‘just cause.’
Covenant of Good Faith Exemption – This is the broadest exemption, and makes it so employers can only fire employees for just cause, regardless of what their employee handbook says.
Understanding what laws are applicable is critical. If an employer has employees in multiple states, the laws of the state where the employee is working will apply. Regardless of legal situations, however, employers should consider themselves ethically responsible for their employees, and only fire them when it is in the clear best interests of the company. Whenever possible, working with an HR team to ensure the ethics of firing an employee are followed will help get the best results.