How to dismiss a senior employee with sensitivity
11th November, 2021
The playbook goes something like this: be direct, don't waffle, walk the employee to the door and take back the keys. Surely, there must be a more compassionate manner in which to exit a senior employee?
Firing someone is probably one of the single most difficult things that you will need to do. Even when the business justification is clear, having to tell one of your senior employee’s that your letting them go, can be tough. From the employee’s viewpoint, being let go can be one of the most painful, humiliating and devastating experiences they will have to go through. In many cases the professional “family” that the employee has had for many years is now gone, which adds to their emotional distress. How you handle the process will have a significant impact on how a former employee moves forward and how they will look back on the event in the future.
Having advised employers’ and senior employees’ for more than 20 years on senior employee exits, set out below are some best practice tips, that attempt to allow you to carry out the termination with minimal disruption to the business and, at the same time allow a senior employee to preserve their dignity and self-esteem on exit.
Create a transition plan
Choose the time and day for the termination. There is no right and wrong day or time of the week for the termination to happen. Choose what is right based on a good business rational. It may be that towards the back end of the week and late in the day, is likely to lead to minimum disruption to the rest of the staff and less embarrassment for the senior employee. Alternatively, early in the week, could encourage the senior employee to get right to work on looking for other opportunities in the market place, and minimise the risk of them dwelling on being fired and plotting how they are going to get back at you.
Identify the person who will take over immediate responsibility on an interim or permanent basis and prioritise with that individual, the steps that need to be taken in the next 48 hours post termination. These should include:
- Obtaining a handle on the short, medium and long-term activities that the departing senior employee is working on. Yes you will need the senior employee to effect a handover as part of the settlement negotiations, but you should be in a position where you already know what, when and to who activities need to be delivered;
- Communication to direct reports;
- Communication to key clients, customers and suppliers and reaching agreement around replacements to look after them and delivery of work;
- Communication to the wider business of the departure and the individual(s) that will take over responsibility for the role and to who any questions should be directed.
Don’t run the risk of employees’ and key customers/suppliers finding out through the grapevine that a senior employee has been sacked. Worse still, the sacked senior employee, has got to them before you have and, given them their version of the reasons for and, the manner in which they have been fired. Throughout the process you need to retain control at every stage and it all needs to be done in a way that does not undermine or compromise any ongoing negotiations around any severance package discussions.
Make HR your buddy
Best thing you can do is go over a termination conversation with a HR professional in advance. They will have more expertise and experience in this task than most managers. Rehearsing for difficult conversations and role playing with HR is one of the best ways to prepare for termination meetings. What would you do if the employee refused to talk to you; breaks down; became aggressive; or refused to leave the building? HR will be able to run through a series of potential reactions to see how you handle them.
Depending on the relationship you have with the senior employee and how comfortable you feel carrying out the conversation, you may or may not want HR present at the termination meeting. In circumstances, where very senior employees are being terminated such as CEO’s/MD’s or other board directors, it works well for the initial conversation to take place on a one-to-one basis, say between the Chairman or another board director and, then HR joining the meeting, once the initial communication has been made. If you are not comfortable conducting the termination meeting on your own, then HR should also be present. They can support you with any tricky practical or technical questions that maybe raised and if required are a witness to the what was discussed during the meeting.
Deliver the message immediately and transparently
Few dismissals happen over a single event and most senior employees’ will have had some prior discussion about their shortcomings around performance/ capability/ behaviour, to the extent that dismissal should not come as a complete surprise. The termination meeting at which the message is delivered should be taken step by step. Bungled terminations usually result from acting without thinking. Before you utter a word, write down the most important things you plan to say and then stick to them. Meetings that tend to go well usually take the following approach:
- You don’t waffle, you skip the small talk and you get straight to the point. Start the meeting by saying “I have some bad news for you…”
- You state the reason for dismissal and tell the person that their employment has been terminated because… Use past tense. Say “Your employment has been terminated” as opposed to “will be terminated.”
- You don’t ‘sandwich’ feedback. While it’s tempting to say good things to temper the bad, it only confuses the issue.
- You don’t drag the meeting out, it risks misunderstanding and awkwardness. It also gets in the way of moving promptly to the next steps – organising the exit in a way that is most helpful to the employee and least disruptive to the business.
- You listen to what the employee has to say. The most common reactions are shock, denial, anger and grief. Your response to their reaction will be more effective if you understand how they are taking the news.
- You don’t over explain the decision. A termination meeting is a time to communicate a decision – not to debate it, defend it, or negotiate it. It’s natural for people being exited to seek more information, to repeatedly ask different variants of “why?”. Just stick to giving a simple explanation for the decision, which could be due to performance issues, cost savings, eliminating roles or functions or a decision taken by new investors who want to bring in their own person.
Don’t shift the blame
By this I mean, first of all don’t get HR to do your dirty work. That can come across as cold, harsh and uncaring, especially where there has been a professional relationship between the senior employee and their boss. Second, if you are the employee’s boss, don’t blame the decision on someone else, such as the board or a higher level manager. Most decisions that involve exiting senior employees’ are made with at least some collaboration. If you are the one communicating the decision, you should feel and express personal responsibility for it and not pass the buck.
Your objective is to quickly get to a position where the senior employee accepts the severance package and signs a settlement agreement. This gives you certainty and finality as the senior employee will be waiving their right to bring a claim against the business in the Employment Tribunal and/or High Court. Go over and beyond the financial and non-financial sums the senior employee is entitled to under their service agreement/contract of employment. A good settlement package should include: a tax free compensation amount; professional outplacement support; an option to continue beyond the contractual notice period with the non-financial benefits such as private healthcare and critical illness cover; an agreed reference; an agreed upon internal and external communication plan; and a contribution towards payment of legal costs.
Talk to the team
After the termination, gather the team together and communicate the employee’s departure. Do not reveal the reasons behind the departure, as that is confidential and don’t badmouth the employee. Your aim should be to give a clear and decisive message and focus on the future.
Seek specialist legal advice
The dismissal of a senior employee is likely to involve a combination of employment, corporate and tax issues, which can all influence how the situation should be handled, particularly if disruption to the business is to be minimised and you are negotiating a severance package. When considering the contractual documents, don’t just limit yourself to the service agreement or contract of employment, there could be corporate entitlements such as shares, share options and standalone bonus schemes which could turn on ‘good leaver’ and ‘bad leaver’ provisions. Taking legal advice from a specialist lawyer who deals with senior employee terminations will allow you to consider the legal and financial risks as part of your overall planning and management of the exit discussions.
The decision to terminate an employee is never easy. Firing someone you’ve worked with for years, especially someone you know and respect, is often excruciating. Even the most experienced managers lose sleep over it. It’s almost impossible to take the emotion out of what is a very personal decision — even when it’s a decision that makes rational economic sense on paper.
Harmajinder Hayre is the Head of Employment at Ward Hadaway LLP and his work regularly involves the strategic planning and provision of legal advice to protect the reputation and financial position of employers and senior executives.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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