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Employee separation is usually implemented by an employee resigning, or by the employer firing or laying off an employee. There are other separation situations such as constructive discharge and retaliatory discharge.
In each setting, you want to proceed with caution. In this article, I will explain the differences in these terms and offer some tips for best practices.
Employee Resignation
Employees resignation is also called voluntary termination. Sometimes employees choose to leave on his or her own. Sometimes the separation is due to a mutual agreement between employer and employee.
In mutual agreement, an employer may offer benefits to the employee if he or she chooses to leave. Benefits can include severance. A mutual agreement may also occur if the separation was agreed upon at the hiring date– for example, if the employee was hired for a six-month internship.
Be very careful with mutual agreements that were not arranged at the time of hiring. You can be held liable for coercion in certain situations. For example, if you tell an employee that he or she may either resign or face demotion or dismissal, you can be sued.
Firing an Employee
Firing is sometimes called involuntary separation. An employee is usually fired for behavior or performance, though other reasons may exist. Unless you created a contract, implied or otherwise, employees are at-will in Texas. This means you can fire an employee without cause. You can also, however, expose yourself to liability without a legally defensible reason.
To minimize liability, provide accurate and timely documentation. Make sure the documentation does not show the situation to break any federal or state employment laws. Complete terminations as quickly as possible. Do not pre-warn an employee that he or she may be fired, as you risk creating an implied contract and disrupting the at-will state.
Employee Layoffs
Layoffs are also called “reductions in force”, due to the part layoffs play in managing a workforce surplus. When considering which employees to lay off, factor in each employee’s skills and work record. Determine which employees are the least productive. Consider whether you could be held liable for discrimination. If your company has over 100 employees, you must abide by the Worker Adjustment and Retraining Notification Act (WARN). This means you must provide 60 days notice in advance of mass layoffs or employment loss.
When conducting layoffs, do it fast. Don’t allow time for debate or confusion. Communicate with the entire team so rumors don’t develop. The company’s approach will speak volumes. Some businesses set up workshops for laid-off employees in which they learn interviewing skills. Others offer severance packages to tide the employee over until his or her next employment. Be sure to check state laws regarding severance packages if you choose to offer any.
In any layoff, remaining employees may feel insecure. They will also have an increase in workload and possibly new job functions. It is important to ramp up employee satisfaction programs after conducting layoffs. Some employees may consider a layoff a temporary solution. These employees may expect to be called back when better conditions return. Do not imply anything that indicates the employee may be rehired in the future.
Constructive Discharge
Constructive discharge is considered a wrongful method for termination. In constructive discharge, the employer makes working conditions so intolerable that the employee resigns. An example of constructive discharge is when an employer demotes an employee’s job to menial tasks. Another example is when an employer treats an employee with hostility and unusually harsh behavior. Adverse employment actions such as constructive discharge can be upheld in court in the employee’s favor.
Retaliatory Discharge
Similar to constructive discharge, retaliatory discharge is considered a wrongful method for termination. This type of separation occurs when an employer penalizes an employee for actions against the employer. A common situation for retaliatory discharge is when an employee reports an employer for wrongful conduct, and the employer terminates the employee.
Last Notes
When involuntarily separating an employee, make sure you have accurate and timely documentation to verify your reasons. Articulate the legitimate, non-discriminatory or adverse actions behind your decision. Never apologize for the discharge, as you may imply that you are unsure about your decision. Do not say “we have no choice”, as the employee can argue there are other choices.
Don’t send mixed signals, and don’t open the table up for debate. Be firm and resolved.