Termination by Cause: Mitigating Risks and Ensuring Compliance.

Terminating an employee for a cause—due to poor performance, misconduct, or violation of company policies—can be a complex and sensitive process for employers. While termination by cause is often necessary to maintain a productive and compliant workplace, it also carries inherent risks of legal challenges and litigation if not handled properly. In this article, we explore key considerations for employers when terminating employees for cause and strategies to mitigate risks effectively.

Understanding Termination by Cause

Termination by cause refers to the dismissal of an employee due to specific reasons, such as:

Poor Performance: Persistent failure to meet job expectations, achieve targets, or perform duties adequately despite warnings or performance improvement plans.

Misconduct: Violation of company policies, code of conduct, or ethical standards, including dishonesty, harassment, discrimination, theft, or insubordination.

Breach of Contract: Non-compliance with employment agreements, terms of employment, or contractual obligations, such as confidentiality agreements or non-compete clauses.

Key Considerations for Employers

When terminating employees for cause, employers must prioritize compliance with applicable labor laws, fairness, and due process. Here are essential considerations to mitigate risks and ensure legal compliance:

Documentation: Maintain thorough documentation of the employee's performance or misconduct issues, including performance evaluations, warning notices, disciplinary actions, and any relevant correspondence. Clear and detailed documentation serves as evidence to support the termination decision and defend against potential legal challenges.

Consistent Enforcement: Apply disciplinary policies and procedures consistently and fairly across all employees. Ensure termination decisions are based on objective criteria and not influenced by personal biases, favoritism, or discriminatory practices.

Due Process: Provide employees with notice of performance or conduct deficiencies, opportunities for improvement, and a reasonable chance to address concerns through performance improvement plans or corrective actions. Employees should be allowed to respond to allegations or provide their side of the story before making any termination decision.

Legal Review: Seek legal guidance or consult employment law experts to review termination decisions, assess compliance with labor laws, and evaluate potential legal risks. Legal counsel can provide valuable insights into the legal implications of termination by cause and help mitigate risks of litigation.

Conclusion

Termination by cause is a critical aspect of managing a workforce effectively, but it requires careful planning, documentation, and adherence to legal requirements to minimize risks and ensure compliance. By maintaining clear documentation, applying consistent enforcement of policies, providing due process to employees, seeking legal guidance, and offering fair severance packages when appropriate, employers can mitigate the risk of litigation and maintain positive employee relations even in challenging termination situations. Ultimately, prioritizing fairness, transparency, and compliance with labor laws is essential for successful termination by cause management.

Employment Law - Merger, Acquisition and Integration

 

Merger, Acquisition and Integration

People and People Practice review and integration is the most important aspect in any Merger Acquisition deal. This if not done appropriately can expose the company to huge risks.

Our lawyers advise and assist clients in buying and selling companies throughout the entire transaction life-cycle, by providing support for the full range of HR and employee-related issues, including due diligence, Process and Policy Review, gaps and risks identification and mitigation, employee transfers, unions/works council management and advice, and post-deal transaction integration. Issues such as the transfer of personnel from the transferor to the transferee generate legal challenges in circumstances. We counsel clients on the different labour law consequences of such transactions and assist them in structuring them in such a way that the transfer of employment complies with all statutory requirements.

This includes the following Services :

HR policies, procedures and employment Law practice Due Diligence.

Risk identification and mitigation plan.

Review Policies and plan Harmonization of policies and thereafter drafting.

Review Employment Contracts and draft appropriate addenda to safeguard both employer and employee interest post-Merger, Acquisition and Integration

Support in integration, Onboarding and communication plan.

Employment Policy Design in India - Kanchan Khatana

 

Employment Policy Design in India

Employment / HR policies provide written guidance for employees and managers on how to handle a range of employment issues. They play an important role in practically and effectively implementing an organization’s HR strategy. Human resources policies provide the necessary structure many businesses need to sustain the company’s productivity and overall profitability. Our HR policy design services is responsible to review existing policies, identifying gap areas, design policies, programs, and initiatives aligned to HR strategy, the Company’s Value, Vision, Business requirement and law of land.

We design policies for the complete life cycle of the employee in an organization. Covering areas from Talent Acquisition, Talent Management, Total Rewards and Wellness (. Employee Benefits & Compensation Structuring, Employee Stock Options & Share Plans), Employee Relations, Talent Development, Health and Safety, Administration, Diversity and Inclusion, Code of conduct, Employee Participation, Employee Separation policies (including VRS), Communication policies including social media etc.

This includes the following Stages :

HR Policy Current Stage Audit

Risk and Gap Identification

Identify Policies required based on business requirements and the law of land.

Advisory on identified policies

Provide Required Support w.r.t Industry Insights (without client details) and Best Practices

Drafting, Implementation, Roll out and Communication plan to support.