Whatever the reasons for an employee having to be let go, following correct procedures is of utmost importance to avoid potential legal issues. Employers must keep in mind basic management rules to aid in defusing anger and upset from the employee in question, otherwise they could take their issues to a courtroom. The rules that employers must adhere to are also imperative for building a defence case if they are sued.
First, I want to discuss the facts on the different types of dismissal:
In the case of employees wanting to leave a post, those who have worked for a company for at least 13 weeks have to give their employer a week’s notice of their leaving. If, however, a greater amount of notice is stated in the employee’s handbook or contract then this notice must be adhered to.
The amount of notice an employer gives an employee whose contract is being terminated depends on the length of time the staff member has been with the company:
- 13 weeks – two years = minimum notice of one week
- Two – five years = minimum notice of two weeks
- Five – 10 years = minimum notice of four weeks
- Ten – 15 years = minimum notice of six weeks
- More than 15 years = minimum notice of eight weeks
Sometimes the employer doesn’t need or prefers the employee not to work out their notice; in this case the employer still must pay the employee for their notice period.
Insolvency relates to issues where a business is either in liquidation, receivership, legally bankrupt or if the owner has died and the company is being administered under legislation.
In cases related to this, employers need to make their staff redundant and therefore ensure that all employees are given at least two weeks’ notice and are paid the correct redundancy payment due to them. If employees believe they have been treated unfairly, they may be able to appeal issues relating to unfair dismissal, discrimination, arrears of pay, outstanding holiday pay and pay in lieu of notice under the Insolvency Payments Scheme.
If a business is downsizing, they will generally make employees redundant as their places won’t be refilled. If this is the case, then employees with 104 week’s continuous employment within the one company is entitled to statutory redundancy pay.
Sometimes, an employee will leave the company, perhaps to start alternative employment, before the date of their redundancy. If this is the case, employers are not necessarily obliged to pay the total redundancy package offered to the employee.
Employees who have been made redundant are entitled to two weeks gross pay per year of employment (maximum €600 a week) as well as one week’s pay which is tax free.
Planning Starts at the Beginning
As awful as it may sound, every employee who is hired has the potential to be fired at any stage. Therefore it’s important for employers to give employees plenty of feedback about performance expectations, as well as keep a record on all positive and negative conversations conducted throughout the period of employment.
Right from the first day an employer takes on a new member of staff they need to:
Determine fair work rules and policies: I’ve stated many times that companies need to ensure all policies relating to the business and staff are in place. Employees need to know workplace rules and be made aware of them in their staff handbook.
Enforce rules fairly and discipline when necessary: If staff rules aren’t enforced then they aren’t worth the paper they are written on. Employers must apply the rules to all employees equally.
Give feedback on performance: Employees like to know how they are performing and be told of any areas they need to improve upon. It is up to an employer to ensure this feedback is being given, both so that the staff member has a chance to improve if need be, but also so it has been documented that the employee has been made aware of any improvements that have been asked of them.
Documentation on each employee: Carrying on from the last point, employers have to keep a comprehensive record of any formal or informal reviews and warnings, as well as any comments made by management demonstrating poor work or misconduct from each staff member. If the reason for termination is due to improper conduct, then witness statements, accident reports and customer complaints should be collected and reviewed. If a case of unfair dismissal is ever brought to court, these documents may prove vital evidence to support why the employee was let go.
Ensure there is a proper foundation for termination: Before firing a staff member, employers should thoroughly investigate and review any personnel manuals and policy statements to guarantee everything is done above board and that there has been no previous mention or agreement of certain employment terms or severance pay that may be inconsistent with company policies.
Exit Interview: Employers must hold an exit interview for every member of staff that leaves the company, for whatever reason. Reasons for the employee being let go should be discussed during this meeting, with a concise explanation being offered alongside evidence that has been collected. The person conducting the interview, usually a manager, must emphasize that the reasons for termination are legitimate and consistent with similar circumstances in the past. During the exit interview, the employee might wish to know what prospective employers may be told, which should be discussed honestly and openly.
Terminating an employee is both emotional and frustrating for an employer, however if it’s not handled properly, a business owner may leave themselves open to expensive litigation. In my next article, I will discuss the exit interview in depth so employers can ensure all bases are covered.
The contents of this article are necessarily expressed in broad terms and limited to general information rather than detailed analyses or legal advice. Specialist professional advice should always be obtained to address legal and other issues arising in specific contexts.