Organizations decide to terminate employees for a variety of reasons. Sometimes, positions become redundant as a company expands or changes focus. Other times, the organization may have experienced a substantial reduction in demand that forces restructuring. Sometimes, businesses decide to terminate specific employees due to misconduct or poor performance. Whatever the reasoning behind a termination, there are many risks involved in letting a worker go.
Terminating a worker can be expensive, especially if that employee has a contract that authorizes a severance package. Organizations preparing to terminate workers may need to prepare with extra caution specifically because of the severance agreement in someone’s employment contract.
Review the terms of the contract
Technically, Texas is an at-will employment state that does not impose severance obligations on companies in most termination scenarios. However, there is an expectation that employers should uphold their contracts with individual employees. Severance packages negotiated when a worker accepts a job may include a requirement to pay wages for a specific number of weeks or a continuation of benefits during someone’s transition. Depending on the circumstances leading to the termination, the business may be best served in some scenarios by upholding that agreement and offering the severance in full. Other times, organizations can reduce or eliminate severance requirements.
Document justification for the termination
If an organization chooses to terminate a specific employee due to substandard work performance or misconduct, proper documentation can make all the difference during negotiations. A worker confronted with clear evidence of misconduct or poor work performance may have few options other than making concessions regarding the duration or extent of their severance compensation. Particularly if the company intends to completely eliminate the severance package, proper evidence supporting the claims that the worker did not meet contractual obligations or engaged in actionable misconduct may be necessary.
Communicate the termination carefully
Workers in a position to negotiate for severance packages often have relatively high standards of living and a great deal of professional responsibility. They may have intense emotional reactions to the sudden loss of a job. Members of the management or human resources team may need to plan carefully to limit the fallout of a termination that could involve the reduction or elimination of a severance package. Cutting off someone’s access to company databases and limiting their security access can both be important to prevent misconduct after someone knows they have lost their job.
Approaching an upcoming worker termination with the right information and perspective can make a major difference to the outcome of the process. Organizations that properly address severance packages when terminating workers can reduce the likelihood of litigation following the decision to let a worker go.