Don’t be a good employer, be a great one: Ending employment

All good things must come to an end, but some things have a better ending than others.

How can you avoid making a tough goodbye a bad one?

Resignation

There are many reasons an employee resigns – a new position, personal problems or because they’re starting their own business. Whatever the reason, as their employer you need to be aware of the following:

• The resignation – an employee can resign at any time. They must give you at least the amount of notice stated in their employment agreement
• Get it in writing – once they’ve notified you verbally that they’re leaving, they need to state in writing the date, the notice period and that they’re resigning voluntarily

Forced resignation

You can’t force someone to resign, or pressure them until they do. If you do, you could wind up facing a personal grievance allegation. So, make sure that you avoid:

• Behaving in such a way that’s aimed at getting an employee to resign
• Making an employee choose between resigning and dismissal
• Breaching the employment agreement to the point that the employee can no longer do their job

Retirement

In most cases, there’s no specific retirement age in New Zealand. People are eligible for superannuation once they reach 65, but there’s nothing to stop them working beyond that age. You can’t ask them to retire unless:

• They were employed before 1 April, 1992
• Their employment agreement has a specific retirement clause
• You both agreed in writing to confirm or change that retirement age on or after April 1, 1992

It can sometimes be difficult so it’s important to be as supportive and understanding as you can whilst still keeping your business on track.

Make sure you thank them for their service to your business.

Wish them well with a farewell party or a gift, so that everyone on the team has the chance to say goodbye and the employee parts on good terms.

Redundancy

If your business has been restructured so that positions are no longer available, you may have to make some employees redundant.

One of the most important things to communicate to the affected staff is that it’s the role that’s no longer needed – rather than about them personally or a reflection on how they’ve performed.

Redundancy is always going to be tricky, and it’s usually unpleasant for those who’ll be leaving, so it’s important to make sure you’ve got all your bases covered.

• Detail the new structure, in writing, to those who are being made redundant
• Consider allowing them to use some of their notice period to look for another job while paying them as usual. This isn’t mandatory, but it’s worth considering
• For their last payday, make sure you’ve paid anything that’s still owing, including any compensation agreed on in their employment contract

Dismissal

The least desirable way to end employment, however, if it’s the only option available to you, it’s important to follow the process carefully so that you don’t wind up facing a personal grievance allegation.

You can dismiss an employee for:

• Misconduct – ongoing poor performance, minor breaches of the employment agreement, and confidentiality breaches are some of the ways an employee could be accused of misconduct
• Serious misconduct – sometimes an employee may have behaved so badly that it’s grounds for immediate dismissal. For example, if they’ve endangered the health and safety of others, have been violent, bullying or harassing, if they’ve been stealing or if they’ve committed some kind of fraud, you can dismiss them on the spot

Deciding to dismiss

Dismissing an employee is a very serious decision and you need to consider it carefully.

You need to consider things like whether there are any mitigating circumstances or whether they’ve been warned before.

When you’re making the decision, you also need to remember that you can only dismiss someone if they:

• Haven’t improved their performance as per a performance management plan
• Haven’t improved their behaviour after a formal warning about misconduct
• Have committed an act of serious misconduct so severe you’ve lost all trust and confidence in them

The process

Once you’ve fully investigated the misconduct, checked your policies and employment agreements for what constitutes serious misconduct, and are confident you can prove that they’ve breached them, it’s time to:

• Put it in writing – you need to include details of the allegations, details of any previous misconduct, references to the clauses in the employment agreement that constitute serious misconduct and a date to meet with the employee to discuss the issue
• Meet with the employee – give them time to tell their side of the story and let them know how long you expect to take to come to a decision
• Make the decision – if you’ve decided that dismissal is the only option and you don’t believe a final warning is sufficient, you need to put your decision in writing. Include again how they’ve breached clauses or policies, the reason you decided on this outcome and what the notice period will be, including their last day of employment
• If you’ve lost trust and confidence in them completely, you may be able to use summary dismissal – this is letting them go without a notice period

For more information download the full essential guide to being a great employer.