Everything you need to know about terminating an employee

Terminating an employee is one of the most difficult steps an employer or supervisor can take, and it should not be taken lightly. Firing someone can create uncertainty and make others in the workplace feel vulnerable. Even if the termination is justified, there’s always a risk of a wrongful discharge claim. While some claims may not have merit, they can still be costly, disruptive, and create unnecessary distractions.

In this article, we’ll provide helpful tips to ensure your termination process is transparent and as comfortable as possible for all involved. We’ll also cover what to say and how to say it, helping you feel prepared and confident going into the conversation.

What are the rules for terminating an employee?

The “rules” for terminating an employee are a combination of company policies as outlined in your employee handbook, state and federal laws, and best practices. Following them helps minimize legal risks and ensures a fair and smooth transition for both the employee and the company.

1. Termination should be for valid reasons

When it comes to termination, it’s important to have a clear and justifiable reason. Terminating an employee for reasons like those listed below are all valid grounds for dismissal:

• Poor performance: Consistently failing to meet job expectations or performance standards despite feedback and opportunities for improvement.
• Violating company policies: Repeatedly disregarding established company rules or procedures, even after warnings or corrective actions have been taken.
• Engaging in violent behavior: Any form of physical aggression or threats of violence that create an unsafe environment for other employees.
• Committing criminal activity: Involvement in illegal activities, whether inside or outside the workplace, that impact the employee’s ability to perform their job or harm the company’s reputation.

However, it’s crucial that these reasons are supported by facts and evidence. Firing someone without a legitimate reason can lead to legal complications, so it’s essential the termination is based on substantial business reasons and not personal biases or minor infractions.

2. Carefully document everything leading up to termination

Documentation is key to protecting both the employer and the employee in the termination process. Keep detailed records of any HR letters documenting performance issues, policy violations, or other behaviors that led to the decision. This allows you to show a clear trail of events leading to the decision to terminate and helps defend against any potential wrongful termination claims. These records should include written warnings, performance reviews, or any corrective actions taken.

3. Prepare the final paycheck and any necessary forms

Before the termination meeting, make sure you have the final paycheck ready. This paycheck should include any unpaid wages, unused vacation days, or other compensation owed. Additionally, provide the employee with any necessary forms, such as health insurance continuation information, unemployment benefits, and any other required documents based on your state’s laws. Handling this properly will comply with legal obligations and show professionalism during a difficult process.

4. File all termination-related documentation securely

Once the termination is complete, file all related documents in the employee’s personnel file in accordance with your company’s procedures and state laws. This includes performance records, termination forms, and any correspondence related to the decision. Keeping these documents secure and organized is essential for future reference and ensures you comply with legal requirements surrounding employment records. Be mindful of privacy laws and ensure that the information is stored safely to prevent unauthorized access.

How to terminate an employee

Terminating an employee is a sensitive process that requires careful handling. It’s best to have a plan before the meeting to maintain respect and professionalism, preventing the employee from feeling blindsided or embarrassed.

Promptly schedule a private meeting

As soon as the decision to terminate the employee has been made, schedule a private meeting to deliver the news. Timing matters — avoid delaying the conversation, as it can prolong the stress for both parties.

Make sure the meeting is set at the beginning or end of the workday to help minimize disruption and embarrassment for the employee. Holding the meeting at the end of the day allows them to leave the workplace without drawing attention, giving them time to process the news privately. Similarly, scheduling it at the start of the day allows them to get the difficult conversation out of the way, leaving the rest of the day for them to gather their things and exit.

Have a witness present

To avoid misunderstandings or disputes later, always have a witness present during the termination meeting. This can be a manager, HR representative, or another trusted colleague. The witness should remain neutral and simply observe the conversation. Their presence ensures that the process is documented from an unbiased perspective, helping protect both you and the employee in case of any claims or issues that arise.

Keep the meeting short and focused

When delivering the news, be concise and clear. Avoid lengthy explanations or going into unnecessary details. Focus on the reason(s) for termination and maintain a direct yet respectful tone. Keeping the meeting short helps prevent unnecessary emotional escalation and ensures that the employee leaves the conversation with a clear understanding of the decision.

Be compassionate but stay professional

While the termination process can be difficult for both sides, it’s important to approach it with empathy. Being compassionate will help maintain dignity, even during a challenging conversation. Acknowledge that the situation is tough and show understanding, but keep the conversation professional. Avoid getting overly personal or emotional, as it can blur the boundaries of the professional relationship.

Ensure security if necessary

If safety is a concern — whether due to the employee’s reaction or previous behavior — be prepared to have security personnel on standby. This ensures that everyone involved in the meeting remains safe and the situation doesn’t escalate. It’s better to err on the side of caution and have support in place, especially if there’s any indication the employee may react aggressively or unpredictably.

Escort the employee to retrieve personal belongings

Once the meeting is over, escort the employee to gather their personal belongings. This can be an emotional and stressful time for them, so it’s important to handle it with respect and professionalism. Make sure they have what they need, but avoid letting them stay in the workspace for too long.

What to say when terminating an employee

Terminations can be emotionally charged, so it’s natural to be nervous about letting someone go. Having a script can help you practice what to say. However, it’s best to use them as practice rather than reading from one verbatim to avoid coming across as cold and detached. Here are a few examples of what you might say, depending on the situation:

Example 1: Performance issues

“Thank you for meeting with me today. After careful review of your performance and several discussions we’ve had about improvement, we’ve decided to move forward with ending your employment. We’ve seen consistent issues in [specific areas], despite providing feedback and support. This is a difficult decision, but at this time, we believe it’s the best course of action for the company.”

Example 2: Policy violations

“I want to address a serious matter today. Unfortunately, after reviewing the situation and the company policies, we have decided to terminate your employment due to [specific policy violation]. We take our policies very seriously, and this behavior doesn’t align with our standards. We appreciate your contributions during your time here, but we can no longer continue our working relationship.”

Example 3: Downsizing or company changes

“I want to let you know that this has been a very difficult decision for us. Due to [reasons for downsizing or layoffs], we are having to make significant changes to the team. Unfortunately, this means that we have to let you go. This isn’t a reflection of your work or abilities, but a necessary step as we adjust to the company’s new direction.”

Example 4: Misconduct

“We’ve had multiple discussions regarding [specific behavior or misconduct]. Despite our efforts to address this, the behavior has continued. As a result, we have made the decision to terminate your employment. I understand this might be hard to hear, but this is the decision we’ve reached after careful consideration.”

Example 5: Compassionate approach (if the employee is struggling personally)

“I want to start by acknowledging how difficult this conversation is. We’ve had some ongoing discussions about your performance and personal circumstances. After evaluating everything, we’ve come to the conclusion that we need to part ways. This decision isn’t a reflection of your worth or abilities but rather a result of the current situation. We’ll support you in this transition, and we can discuss what the next steps are for your benefits and final paycheck.”

Handle employee terminations with confidence

Knowing how to properly manage employee terminations is key to maintaining a positive workplace environment and avoiding legal issues. By using the right strategies and support, you can handle these challenging situations effectively and professionally.

BLR’s HR Hero offers the tools and expert guidance you need to manage terminations with ease. HR Hero includes helpful resources like templates, legal insights, and compliance support to simplify the process and ensure you’re always on track. Contact us today to learn how we can help you streamline tasks and optimize your workflow.