University of Kwazulu-Natal

The Dos And Don Ts Of Employee Termination Avoiding Legal Pitfalls

Bonisiwe Shabane
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the dos and don ts of employee termination avoiding legal pitfalls

Employee termination is a challenging and often uncomfortable aspect of managing a business. It’s crucial, however, to navigate this process carefully and adhere to the law to avoid potential legal issues and protect your organization’s reputation. In this blog post, Matthew Miklave of the Law Office of Matthew T. Miklave explores the dos and don’ts of employee termination, highlighting key steps and potential pitfalls to help you make informed decisions while staying compliant with employment laws. Before initiating any termination process, review your company’s employee handbook and established policies. Ensure that you follow any guidelines or procedures outlined for terminations.

Consistency in applying your policies can help you avoid discrimination or unfair treatment claims. Maintain thorough and accurate records of an employee’s performance issues, including written warnings, performance improvement plans (PIPs), and any relevant communication. This documentation can justify the termination decision and protect your company against wrongful termination claims. When delivering the news of termination, do so in a private and respectful manner. Be clear about the reasons for the termination, and provide any necessary information regarding final paychecks, benefits, and the return of company property. Avoid confrontational or aggressive language during the termination conversation.

Terminating an employee is never easy. It’s a sensitive process that employers must handle with empathy and adhering to strict legal guidelines. One misstep can have negative legal ramifications, damage your company’s reputation, and create a hostile work environment. This blog post aims to demystify the termination process, providing you with essential “do’s” and “don’ts” to ensure you stay compliant and minimize potential risks. There are two types of employee terminations: Voluntary terminations are by far the easiest to deal with.

Employees initiate the process and resign. Simple as that. These types of terminations can be invaluable, as exit interviews allow the company representatives to have a candid conversation and gather information to improve the organization. Involuntary terminations, on the other hand, are more delicate and must be handled discreetly for two reasons: When terminating an employee, things can be rather touchy, and there is room for mistakes. The entire process involves legal and personal complexities that can impact your business, but understanding the playing field can help safeguard everyone involved.

Luckily, there are other ways you can come to understand these guidelines just as well without going through courses such as the Master of Laws (Business Law) online. This article will describe what you should and shouldn’t do as an employer during a termination. Firstly, some important legal and ethical considerations exist when terminating an employee. While some policies may be stricter than others, it’s always good practice to treat everyone fairly to avoid any legal troubles. Make sure that employees understand their job responsibilities and performance standards from the get-go. Feedback also ensures that you avoid surprises when termination occurs.

It is also essential to be clear and constantly update job descriptions to have something specific in writing to reference. If you’re up for the extra effort, you can also keep records of the employee’s work history. Maintaining records of any performance issues, disciplinary actions or other incidents that are leading up to the termination is critical. These records serve as evidence in case of any disputes while also providing an accurate account of events leading to the outcome. Just ensure that you keep all details in a clear format that also includes the dates, times and names of individuals involved in the incidents. It is crucial for employers to have defined processes in place for handling employee terminations as outlined in their policies and procedures.

If you can follow these guidelines as per company policy, it means you’re going to be consistent and fair throughout the process. It will help reduce stress on your behalf, knowing that you’re following the best laid-out plans and employees won’t be up for any nasty surprises. In a perfect world, employees perform optimally, enjoy high job satisfaction, and stay with one company until retirement. This type of perfection rarely exists. According to the U.S. Bureau of Labor Statistics, the median employee tenure with a single company is 3.9 years.

While some staff members resign voluntarily, others are involuntarily terminated. Improper or illegal terminations expose companies to consequential legal issues and financial risk. Employers must attempt to close all possible doors to post-termination litigation to avoid lengthy and expensive legal battles, adverse publicity, and any detrimental impact on employee morale. Make sure your employees understand their job responsibilities, the company’s policies and code of conduct, any performance issues, and ways to improve their performance. That said, the most important way to avoid litigation is by adhering to all applicable federal, state, and local laws concerning employment. Never fire an employee for an improper or illegal reason.

Doing so leads to accusations of discrimination, retaliation, or breach of contract. Emotions run high following an involuntary discharge and some ex-employees are just looking for a fight. While nothing can totally bar former workers from pursuing legal action, employers can take steps to take the wind out of these individuals’ litigious sails. Get a free trial of Practical Law, the how-to resource with termination best practices, protocols and practical tips for employers on legal risks. The best way to escape a lawsuit it to avoid its inception. Implementing and following proper termination practices minimizes the risk of encountering a wrongful termination claim.

Before initiating a dismissal process, employers must understand all applicable federal and state employee termination laws and policy requirements. To protect confidentiality, only include critical individuals in discussions. Terminating an employee in the United States can be straightforward in theory, thanks to “at-will” employment in most states. However, in practice, failing to follow legal protocols can lead to costly wrongful termination claims. Federal laws, such as Title VII of the Civil Rights Act, protect employees from discrimination, while state laws may impose additional safeguards. Understanding the scope of these laws ensures employers make lawful, fair, and defensible termination decisions.

Employers must also be aware of special protections for employees on medical leave, those who have filed workplace complaints, or individuals belonging to protected categories such as age, disability, or religion. Ignoring these protections can result in severe legal and reputational consequences. Preparation is critical to ensure a termination is handled both legally and respectfully. A poorly planned meeting can escalate emotions and increase the likelihood of disputes. Employers should prepare a clear script, gather all relevant documentation, and involve an HR representative or legal counsel during the process. The goal is to communicate the decision professionally, avoiding language that may be interpreted as discriminatory or retaliatory.

Timing also matters—avoid terminations during sensitive moments, such as right after an employee’s medical leave or while they are actively engaged in protected workplace activities. Such timing could raise suspicion and invite legal scrutiny. Good documentation is the cornerstone of a legally sound termination. Performance reviews, attendance records, and documented warnings create a paper trail that demonstrates the decision was based on objective, lawful reasons. This is especially important if the employee later files a wrongful termination lawsuit. Running a business is difficult — and having to terminate an employee may be one of the hardest things you’ll ever have to do as part of its operations.

Employee termination can significantly impact employee morale and company culture. If a termination is not handled correctly, it can also put a business at risk of serious legal repercussions and reputational harm. Not only is firing someone an emotionally difficult task, but there are many statutory and regulatory obligations that must be considered to avoid the potential for litigation. Here are several tips for employers to keep in mind when it comes to employee termination to help ensure the process runs smoothly: There are a broad range of state and federal employment laws that impact the termination process. It’s essential for employers to have an understanding of both employer and employee rights — as well as ensure they are adhering to all applicable regulations regarding employee termination.

Remaining compliant is key to avoiding legal consequences. Notably, upon termination, an employer in California only has 72 hours from the end of an employee’s last shift to provide them with their final paycheck. Failure to do so can result in the company having to pay the equivalent of one day’s earnings for each day the final wages are late. The likelihood that you will have to fire an employee on the spot is usually low, unless there are egregious circumstances. While there may be violations and issues that warrant immediate action, be sure that the decision to terminate is based on fact, not emotion. Basing your decision to terminate an employee on established facts — rather than emotion or opinion — is key to minimizing the risk of a wrongful termination claim.

There’s no easy way to fire someone. Even when the decision is justified, the conversation can be uncomfortable, emotional, and deeply personal. Most managers dread it, not just because they’re unsure what to say, but because they understand what’s at stake. A poorly handled termination doesn’t just affect the person being let go. It can shake the confidence of the entire team, damage trust, and raise questions about how the company treats its people. Ethical termination practices help protect more than just legal interests.

They reflect the organization's character, leadership, and values in moments when those things matter most. “The key to effective, human firing is to focus on how you treat people during the process.” — Joel Peterson, former Chairman of JetBlue Terminating an employee is more than a business decision; it's a human one. How it's handled can have a ripple effect across the organization, influencing morale, trust, and even long-term retention. When termination is conducted with clarity and respect, it sends a message that people are valued, even in difficult moments. It reinforces accountability while maintaining dignity.

And it shows that leadership is willing to do the hard things the right way. Employee terminations are sensitive processes that require careful handling to avoid legal complications and maintain workplace morale. Whether due to performance issues, misconduct, or organizational changes, here’s a comprehensive guide to navigating these challenges smoothly and legally. Navigating employee terminations can be daunting for any organization. Not only must you consider the emotional impact on the departing employee, but you also need to ensure compliance with legal standards to mitigate potential risks. Before initiating any termination, it’s crucial to have a solid grasp of the legal frameworks governing employee dismissals.

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