As wrongful dismissal settlements increase in damages and publicity, it is vital that HR get the details of any termination right. So what are the biggest mistakes HR is making, and how can you avoid them?
One of the biggest mistakes employment law
yer Christine O’Donoghue, from Miller Thomson, sees is employers using (or misusing) performance improvement plans for just cause termination.
“Any just cause firing that doesn’t include conduct such as theft or serious fraud is risky. It’s known as capital punishment in the employment law
context,” O’Donoghue said.
Sometimes employers will know they want to fire an employee, but will not have sufficient cause. Instead of terminating without cause – an overall cheaper approach, according to O’Donoghue – some employers will choose to put a performance improvement plan in place. When an employee does not improve they then terminate based on the results of that program.
However, if an employer does not use an improvement plan in good faith, a board or court could see it as a malicious step to get rid of an employee, resulting in an expensive payout. What’s more, a court will rarely accept incompetence as the only reason for a termination so it is not usually worth going down that path.
“At the outset of embarking on any performance improvement plan, ask yourself whether you think the relationship is salvageable,” O’Donoghue said. “You want to ask yourself is it sustainable.”
If you truly do not believe the employee will improve, skip the plan and terminate without cause. It’s a simpler process and likely to be less expensive in the long term.
Next week on HRM: O’Donoghue discusses without cause best practices, including meeting statutory requirements.