Trouble-Free Employee Terminations

By: Melanie Geddes

When an employee leaves, for whatever reason, it is vital to get everything right, from reclaiming your property to ensuring that your confidential information is kept confidential after they leave.

An employer must consider all the consequences before terminating someone’s employment. The employee’s rights to notice, pay, etc will depend in part on what is in their employment contract and any associated documents such as the employee handbook and procedures, pension plan rules, etc. These should be carefully reviewed to ensure the employee receives what they are entitled to at the time of the termination.

If the termination is a dismissal because of performance issues, capability or conduct, the employer will also have to review performance and attendance records such as reviews, sickness and holidays, and any documents relating to disciplinary or grievance issues and sanctions. These and other relevant records must provide sufficient evidence to justify the termination as fair and lawful.

When terminating an employee always be aware of potential discrimination allegations prior to proceeding. A dismissal is discriminatory if it is related to a protected characteristic your employee has or is thought to have:

  • age;
  • color, race, nationality or ethnic origin;
  • disability;
  • religion;
  • retaliation
  • pregnancy

Discrimination can be direct, against a particular employee, or indirect, because a provision or practice that you operate discriminates against a particular group of employees who can be defined by one of the protected characteristics (for example, their sex) compared to another group.


If investigations are needed because of disciplinary or grievance issues, for example, these should be completed before termination. They must be lawful, fair and there should be a full and accurate record of them.


If the employee has access to confidential information or trade secrets, make sure they do not copy it or disclose it to third parties without your permission, before termination. If necessary, monitor computer usage to ensure such information is not being emailed to, for example, the employee’s personal email addresses or downloaded onto a memory stick.


Phone, email or other communication with customers, suppliers or competitors may also be monitored in the period leading up to termination. Social and business networking sites can also be monitored for damaging remarks or information about you or the employee’s colleagues.


List the company property held by the employee – laptops, vehicles, phones, documents, etc – and ensure it is all returned or (if that is what you have agreed with the employee) destroyed immediately on termination.


It is sensible for two managers or other employers to attend the termination meeting, one to speak and the other to act as a witness. The speaker should usually stick to a carefully worded script, and there should be a permanent record, usually written, of what was said.


Prepare a statement for other employees and ensure it is wholly accurate, and not defamatory or otherwise unlawful. If you can, agree with the employee which (if any) aspects of the termination, reasons, details of any settlement, etc, are to be kept confidential.


If there is to be a settlement with the employee, ensure they sign a compromise agreement, relinquishing their right to make future claims against the company. Take professional advice to ensure the agreement is watertight.


Ensure the employee is reminded of any non-compete, non-solicitation, or confidentiality agreements they are subject to and, if they are a director or senior manager, their general duties of confidentiality. Make sure this is done in writing, and that it sets out the consequences of breaching any of these obligations, so there is a record of it.


Creating and using a termination checklist can reduce the risk of overlooking information that could lead to discrimination or unlawful claims in the future. This will help to ensure you are consistent in how you treat employees and standardize your termination procedures.