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EMPLOYEE TERMINATION
Know the Rules! Employment - at - Will Contracts Illinois is regarded as an "employment-at-will" state. An employment-at-will relationship contains no specified duration and may be terminated at any time by either the employer or the employee for good cause, bad cause or no cause. While employment-at-will remains the law in Illinois, 'good cause' firing remains the best employer defense. In certain states, an 'employment-at-law' contract alone will not necessarily carry a defendant-employer to a winning verdict. Other factors will be considered. For example, HR Next, a Human Resource website, notes that 'employment at will' is a hard concept to support in today's climate: Under employment at will, employees have no "property rights" to their job; employers are free to dismiss employees "at will," without any reason or cause. While this was the traditional employer-employee relationship and used to be taken for granted, Now employers wanting this relationship must state so explicitly as part of the employment agreement, and even then, they have trouble defending the policy. Employer's Best Defense: Good Cause
The best defense is good reason for termination. Even in an employment-at-will state such as Illinois, employers may not fire an employee for any of the following reasons:
Unjust Dismissal Employers today are often finding themselves in the defendant's seat refuting an 'unjust dismissal' claim brought by a disgruntled employee. HR Next notes that while 'unjust dismissal' cases are defined state-by-state, here are some issues for every employer to consider: Unjust dismissal claims are based on the concept that employees do have some employment-security rights. Former employees can argue that an implied contract exists, even when there is no written contract, which protects employees against dismissal as long as they are doing acceptable work. Employees may argue that where there are written contracts, parties must practice good faith and fair dealing, not look for loopholes or hidden meanings to escape obligations (such as finding an excuse to dismiss in order to avoid paying a bonus). To defend such cases, Employers must show sufficient cause (a defensible reason) for dismissing employees. When courts rule that there was "unjust dismissal," employees may receive lost wages and benefits as well as possible damages awarded for: Abusive discharge--employee is insulted or verbally abused as well as dismissed. Outrageous conduct--the intentional infliction of emotional distress, as in deliberately harassing an employee to force resignation or being extremely abusive or cruel in the course of dismissal. Negligent evaluation--when company conducts performance reviews but fails to alert employee that employment is in jeopardy from poor performance. Defamation--harming a person's reputation by libel or slander. Punitive damages--awards used to punish a defendant and to prevent repetition of the offense by the defendant or others. Employment Contracts May an employee point to a company policy or handbook to assert violation of contract by the employer? Yes! Implied or express employment contracts in employment handbooks and policy statements may be viewed as employment contracts that have eroded the termination-at-will doctrine. Company policies and handbooks must be carefully worded. By itself, inserting a disclaimer clause is not sufficient. The company policies must not be inconsistent with the at-will statements. Examine all of your policies, handbooks, and application forms to make sure that they do not guarantee employment or any terms and conditions of employment. In other words, do not make promises the company does not intend to always keep. A discipline policy can be issued, but avoid claiming that the procedure will always be followed. The wording should not convey a contract for employment. There should be no verbal statements that indicate permanency. Disclaimer The point of a disclaimer is to weaken the reasonableness of an employee's reliance on an employee handbook, employer statement or employment application as proof that they have a contract with the company. In other words, there is no implied or express contract pertaining to the employee's employment. An effective disclaimer is the best defense against an implied contract complaint. A disclaimer must be in large, BOLD type, possibly surrounded by a border. It must be located in a conspicuous place in the document. The language must be clear, plain and not legalistic. Some possible wording would be: The handbook expresses policies, and is not a contract. Also, employee or employer can terminate employment at any time, without notice. {Also see example policy forms listed below}. If the handbook lists potential grounds for dismissal, indicate that the list of reasons is not all-inclusive and that an employee can be dismissed for any legal reason. Also not that the procedures and policies described are not contractual and the employer can deviate from any or all of them at any time, and/or change any or all of them at any time without notice. Also, specify that no manager, supervisor or other representative of the company other than the president has any authority to enter into any agreement for employment for any specified period of time. While these are general guidelines for disclaimers, they need to be tailored to fit the document. Above all, the disclaimer must be conspicuous and clear. Note: the federal "plant closing" law, the Worker Adjustment and Retraining Notification Act, (WARN), PL 100-379, does require employers of 1000 or more employees to give 60 days notice before closing a facility or starting a layoff of 50 employees or more. There is no Illinois law addressing this issue. How to Terminate an Employee CCH Business Tool Kit: Using Proper Termination Procedures HR Next: Conducting the Termination Interview While there is no single, best way to tell an employee that his or her services are no longer wanted or required, there are a few rules that will usually make things easier. HR Next: Firing & Disciplining Employees In a disciplinary situation not taking action is a decision. Such a failure may preclude you from taking action in a similar situation in the future. This article focuses on what to do and when to do it. Insider Radio: Mixing Fairness with Caution: Carrying Out Employee Terminations Monster.com: HR Watch: Before Terminating an Employee, Consider the Following Guidelines People Sense: Handling Employee Terminations: Online Template Sample Employer Policies HR Next: Termination & Severance Pay Policy Also see: HR Next: Termination of Employment Sample Policy An example policy statement that covers separations, severance pay arrangements, insurance cancellations, restoration of length of service for employees who are later rehired, and a cross-reference to the policy on vacation pay. HR Next: Sample Policy: Employment-at-Will/Discipline HR Next: Exit Interview Sample Policy HR Next: Progressive Discipline Worksheet Progressive discipline is a series of increasingly serious responses to repeated behavior or performance problems. Ramey & Sniffen (1/99): Employee Termination: Discussion & Model Policies Development & implementation of clearly stated procedures that are flexible enough to handle the various forms of termination. Sample Check Lists for Termination CCH Business Toolkit: Sample Employee Termination Kit: Waiver of Right to Sue CCH Business Toolkit: Termination Check List & Form Find Law: Termination Check List: For "Firing Right" You can significantly reduce this risk if you can show that you fired an employee for proper business reasons and that you acted in good faith during the termination process. Find Law provides two documents designed to ease the task of terminating an employee and help manage some of the risks. HR Next: Check List for Termination Find Law: Sample Reference Release for Employees who are Leaving As an employer, you may establish any reference policy that you wish. You can decide to never furnish references, or to verify only the fact and dates of employment. You can also condition the furnishing of references on obtaining a release from the former employee. Find Law provides a sample employment reference release that spells out the terms under which references will be provided. Find Law: Sample Employee Termination Contract: Waiver of Right to Sue When an employee leaves your business, ask for a general release relating to the employee's termination. Download the attached sample employee termination contract from Find Law for update on your own PC. Commentaries - Termination in General Employee Terminations Law Bulletin (1/2000): Case Study: Employee Sues for Breach of Contract A fired employee took his former employer to court, claiming that statements made during his initial interview and in the company's employment manuals and performance evaluation forms constituted promises to continue to employ him. HR Next: Basic Termination & Policy Issues HR Next: Alternatives to Termination HR Next: Discipline Quiz & Answers Test your knowledge in handling employee discipline matters. Worker Adjustment & Retraining Notification Act (WARN) US DOL: Worker Adjustment & Retraining Notification Act (WARN) Overview HR Next: Overview on Federal Plant Closing Law Employee Handbooks: In General Texas Bar: How to Draft an Employee Handbook Paychex: Managing your Employees: How to Write an Employee Handbook Florida Mediation Group: Employee Handbook Comprehensive Treatise on the pros and cons of corporate handbooks and the issues that should be considered.
The contents of this website do not constitute legal advice. These materials are developed to inform the employer community of current business issues and trends. If you are seeking legal advice, you will need to contact your attorney. |
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