How to best handle the dismissal of employees

Editor’s note: This article is from the archives of the MSU Crop Advisory Team Alerts. Check the label of any pesticide referenced to ensure your use is included.

Dismissal is the involuntary termination of an employee’s employment. Because emotions are often high, dismissals need to be handled with great care, or avoided. How can managers avoid dismissals? Careful selection, training, and management decisions serve to reduce the number of dismissals. In any case, a dismissal should only be considered after other options have been tried and did not lead to the desired results. Except in cases of gross misconduct, the dismissal should not come unexpected to the employee. Managers need to make sure that sufficient opportunities for changes were provided and a fair disciplinary process was followed. In addition, regular evaluation of an employee’s performance and a paper trail regarding performance appraisals and disciplinary actions is a must should a terminated employee challenge the dismissal in court.

Michigan is an at-will employment state. What this means is that in the absence of a contract, the employee can resign at any time and for any reason and the employer can terminate for any reason or with no reason. Two exceptions apply in Michigan: the public-policy exception and the implied-contract exception. The public-policy exception prevents employees from being terminated for an action supported by the State’s constitution and statutes. For example, civil rights and equal employment opportunity legislation prohibit discharge based on an employee’s protected characteristics, including race, color, religion, sex, national origin, age, and disability status. Other examples are the reporting of dangerous workplace conditions, union activities, and the refusal to break the law on the employer’s request.

The implied-contract exception is brought on by an employer’s oral or written assurances with respect to job security or disciplinary procedures. For example, an employee handbook describing procedures to be followed if disciplinary action becomes necessary or statements to the effect that no employee will be fired without just cause create an implied contract. Then the employer needs to follow the described procedures. Also, if a manager in charge of hiring, or the employee’s supervisor tells him or her that the employment will continue for as long as the work performed is adequate, an implied contract is created.

If an employee’s dismissal does not comply with the law or does not comply with contractual agreements stated or implied in handbooks, application forms, or other company documents, it is considered a wrongful discharge. A wrongful discharge may be actionable in court. Even if a plaintiff does not prevail, management time and attorney costs are reasons to carefully review company policies before dismissal decisions, in particular when the dismissal is without cause. As a preventive measure employers need to review and regularly update their employment documents, if they want to ensure an at-will employment relationship with their employees. However, less job security may also result in less loyalty from the employees.

Other important decisions in dismissal are how to conduct a termination interview and whether to offer severance pay.

To read Dr. Bitsch’s complete newsletter go to her website at http://www.msu.edu/user/bitsch. Under “News” click on “Agricultural Labor Issues in Michigan” for a list of available newsletters. Please remember that these newsletters serve educational purposes only and do not constitute legal advice.

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