- When employers do not agree to union contracts with organized labor groups or require their workers to sign employee contracts, the employees function as at-will labor. This gives an employer greater freedom over termination practices. When an employee has a contract, individually or through a union, it is legally binding for both the employer and the worker, including allowing or prohibiting certain reasons from serving as grounds for termination.
According to the Bureau of Labor Statistics, many states make it illegal for employers to terminate employees, regardless of contract status, in ways that conflict with established state policies. For example, most employers can't terminate employees who file worker's compensation claims or report workplace safety violations. Employers also violate state and federal laws, such as the Civil Rights Act of 1964, by making termination decisions based on gender, age, race or religion. - Every employer must determine what actions or issues constitute grounds for termination, within the guidelines of state and federal law. This allows the business to terminate employees using consistent, legal standards. For example, a company may print a list of grounds for immediate termination in its employee handbook, including fighting in the workplace, drug use on the job, insubordination or theft from the employer or colleagues. Other behaviors may incur other forms of discipline, such as a probationary period, on a case-by-case basis.
- Businesses can elect to conduct exit interviews with all terminated workers. The purpose of an exit interview is to explain the reason for termination, theoretically reducing the likelihood of allegations of unlawful termination due to discrimination, and to handle the paperwork that comes with termination. An exit interview is also a chance for an employer to get company property back from the employee and issue a final paycheck or information about a severance package.
- Severance packages consist of temporary ongoing pay for terminated employees or a lump sum. In some cases, a severance package also includes extended benefits. Businesses that offer severance packages need written policies for doing to to make sure every employee who is terminated receives access to the same benefits based on standards such as salary, service time and reason for termination.
- An exit interview or notice of termination is the most appropriate way to inform an employee of her reason for termination. However, respecting that employee's privacy while dealing with the rest of the workforce is a more complicated issue. Businesses can prevent the negative impact of rumors and resentment by setting a policy for dealing with termination once the employee is gone. This may involve notifying remaining employees of whether the termination was based on disciplinary, performance or personal issues, without giving further details.
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