A woman walks out of an office carrying a box of office supplies and plants. Her eyes are downcast, and she has a solemn expression.

How to Fire an Employee

What You Should Know When it's Time to Terminate an Employee

Last Updated: February 19, 2024

Key Takeaways:

  • Employers should consider how firing an employee affects staff morale, business profits, project timelines, and workplace safety.
  • Employers must adhere to employment laws and seek guidance from state labor offices to ensure a legal and ethical process.
  • A professional termination process includes respectful communication and efficient administrative steps.

Firing an employee is a difficult situation most small business owners and office managers have to face at some point. Having to dismiss an employee is not an easy chore; many entrepreneurs would agree that employee termination is one of the most difficult and unpleasant tasks in the workplace.
Large companies and corporations typically have a human resources manager or a fully staffed HR department that handles the employee termination process. This is an operational luxury that most small businesses cannot afford. Firing employees is a responsibility that falls directly on the owner’s or top manager’s shoulders.
In this article, we’ll show you the best practices for firing an employee, and offer guidance and advice for each phase of the process.

How does firing an employee affect my workplace?

In some situations—like catching an employee stealing from your business, for example—dismissal is an obvious and indisputable decision. However, terminating an employee isn’t always an easy or obvious choice. Before firing someone, you should think about the impact their dismissal could have on your organization.
To help you consider the results of removing an employee, ask yourself if firing the employee will:
Improve the work environment for the rest of your staff. Employee termination doesn’t happen in a vacuum. Firing someone has a positive or negative impact on the remaining staff. Will your staff be grateful the terminated employee is gone? Or will they resent your decision, affecting their morale and quality of work?
Impact your business’s financial success. Dismissing an underperforming salesperson and replacing them with someone better can improve your business’s bottom line. However, firing a high-performing employee due to insubordination or their conduct with other employees may cost your business in profits.
Harm your customer relationships. Timing is an important consideration when deciding to fire a staff member. Getting rid of an employee in the middle of a project can result in missed deadlines and broken promises made to one or more clients. Also, a well-developed working relationship between a client and the employee may not be recoverable after the employee is terminated.
Improve workplace safety. An employee doesn’t need to be a horrible person to potentially make your workplace unsafe. Carelessness doesn’t come with a motive. Terminating a careless employee can lower the risk of a serious workplace accident taking place.
Help the employee to move on with dignity. While being fired is rarely viewed as a positive development, terminating an employee shouldn’t involve humiliating or degrading them. While most staff dismissals are going to result in hurt feelings, the goal should always be to minimize the emotional impact of your business decision. And, firing an employee who isn’t working out will save them from repeated incidents of embarrassment and stress.

What is just cause for firing an employee?

It’s known as wrongful termination, unlawful dismissal, or being fired without cause. In all instances, the phrase refers to a situation where firing an employee breaches their Employment Contract and/or breaks the law.
Wrongful termination is a gray area of employment law, and these situations often end up as court cases initiated by the fired employee. There are several different state and federal laws governing what constitutes legal grounds for dismissal.
These are some of the common traits you cannot use to discriminate against an employee, or use as the basis of their dismissal:
  • race or color
  • religion
  • national origin or ancestry
  • physical disability
  • mental disability or medical condition
  • marital status
  • gender or sexual orientation
  • age
  • pregnancy and childbirth
To help avoid a wrongful termination court case, you should consult with your state’s Labor Office and ask them about relevant employment laws for your region and industry. The US Department of Labor website has a list of all State Labor Offices with contact information and web links.
If your staff are unionized, you must also consult the current agreement between the company and the employees’ union for the conditions under which an employee can be terminated, and any procedures which must be followed when doing so.

How can I avoid a wrongful dismissal case?

To avoid getting involved in a wrongful dismissal case, you should have documentation backing your decision to fire an employee. This typically consists of one or more Employee Warning Letters. An Employee Warning Letter is a formal record of a staff member’s poor performance or breach of company rules. This document is also known as a letter of reprimand.
A warning letter is commonly used as part of a progressive discipline strategy. This strategy uses a series of warnings that grow in severity as performance issues or incidents of misconduct persist. Early warnings are usually followed with corrective actions like additional training and tighter supervision.
A progressive discipline strategy provides a record of an employee’s poor behavior, and proves that the employer attempted to correct the employee’s behavior before termination was required.

What should I do before dismissing an employee?

Before meeting with the employee, there are actions you should take to provide for security and uninterrupted business activity. Don’t assume that the termination process will go smoothly and without incident. Being fired is an extremely stressful event for everyone involved, and some employees may respond in ways contrary to their character and personality.
Before the dismissal meeting takes place, speak to the person who handles your IT and arrange to have the employee’s access to their workstation and the company network revoked. This is to ensure that an angry employee doesn’t delete valuable files, or make copies of files to take with them when they leave.
If the dismissal meeting is taking place first thing in the morning, locking the employee’s network and/or workstation account can be done before they arrive. If this isn’t possible, inform your IT head that you will contact them just before the meeting takes place, so they can lock down the necessary accounts during the meeting.
If you have a security officer on staff, you should inform them when the meeting is taking place, and have them prepared to escort the employee from the meeting room to their desk to pick up their personal items—jacket, purse or bag, etc.—and then escort them from the building. If you don’t have a security officer, you should assign a trusted supervisor or manager, or perform this duty yourself if necessary.
This action may seem extreme, but it is the best way to ensure that an angry employee doesn’t have the opportunity to leave the building with company property, or with critical work files either in paper format or saved on removable storage drives.

How should I meet with an employee being terminated?

The meeting with the employee being fired should take place in a private office or meeting room. Don’t fire an employee within sight of their coworkers. Again, you should aim to treat the employee with as much dignity and respect as possible given the circumstances.
Always conduct the dismissal meeting with at least one witness present. This person could be the employee’s manager, a human resources officer, or another senior manager. Having another person in the room helps to dispel any accusations by the employee that they were mistreated during the firing process.
Having another person present can also provide an additional calm voice in the room, as well as indicate to the employee that the decision to release them isn’t yours alone.
In terms of what you should say during the meeting, the cardinal rule is: the fewer words, the better. If you have warned the employee about their performance or behavior (preferably more than once), their dismissal won’t be coming out of the blue.
The primary message you want to convey is:
  • The employee is definitely being fired—the decision has already been made. You can show respect and empathy during the meeting, but don’t use soft language that leads the employee to believe they can alter the outcome of the meeting.
  • The employee’s performance/behavior does not meet the company’s standards. It is not necessary to go into greater detail, especially if you have issued one or more warnings to the employee. The less details given, the less ammunition there is for the employee to use to argue point-by-point why they should not be dismissed.
  • You believe the employee will find a new job that is a better fit for them. This is an optimistic statement of support that can help the employee to accept the situation more gracefully.
Finally, explain to the employee what is going to happen next. This is when you should give them their Employee Termination Letter. Let the employee know how their final pay will be handled. Tell them they will be escorted to their desk to pick up their personal items, and then escorted from the building; emphasize that this is a company policy that protects them, their coworkers, and the company from any liability, and that it is not meant personally.
Do not forget to have the employee hand over any keys or access cards for the building. It is ultimately less embarrassing for the employee to give them to you during the dismissal meeting, than to have to come back later to drop them off.
If you suspect that a dismissal meeting is going to be highly emotional and confrontational, you may want to make an audio record of the meeting. You should inform the employee at the soonest opportunity that the conversation is being recorded to create a set of meeting minutes. Ideally, you should ask the employee for their consent to record the meeting, as some states have different rules concerning recording someone without their consent.
An audio recording may or may not be permitted in a court case, but it does offer some defense against an employee’s claim of mistreatment during the firing process. It also gives the employee some incentive to temper their emotions during the dismissal meeting.
There are several smartphone apps available for recording audio, which offers the simplest portable solution for wherever the meeting takes place.

Pro Tip: Have some drinking water and facial tissues in the office or meeting room. Stress causes dry mouth, making it difficult to speak. And, while there aren’t always tears in a dismissal meeting, it’s better to have tissues and not need them, than to need them and not have any available.

How do I fire an employee over the phone?

One word: don’t. Firing an employee by telephone, text message, video chat, or email message is terribly impersonal and disrespectful. The only circumstance where you may have to fire an employee over the phone is if they work remotely, and it is too cost prohibitive to have them come to the nearest branch office or to have someone from the company visit them in person.
This is a situation that most small businesses are unlikely to encounter. Regardless, always meet with an employee face-to-face when you are firing them.

What should I do after firing an employee?

First, you should inform your remaining staff of the firing. When someone is fired, there will typically be a mix of responses from their coworkers. Some of them will become anxious; others may be silently resentful or openly upset by the action. The longer that people are left to guess what happened to someone, the greater the levels of stress and insecurity will be in your workplace.
An important consideration when sharing the news of an employee’s termination is to provide just the right amount of information. Your staff deserve to know when someone has been dismissed, but the fired employee also deserves a level of privacy.
Here are the main points to communicate to your staff:
  • Inform them that the employee has worked their last day for the company. This lets your staff know that the person is not returning.
  • Tell your staff if someone will be taking over the departing employee’s job duties on a temporary or permanent basis. This information can help to reassure your staff that business operations will proceed as usual.
  • Let your staff know if the open position will be advertised, and if internal and/or external candidates will be considered. This gives your staff a chance to consider the opportunity created by the situation, instead of dwelling on the negatives.
Do not go into the details of why the employee was fired. Do not bad mouth the former worker, or use their dismissal as an emphatic warning to others. Your employees will easily figure out for themselves that poor performance or undesirable behavior can lead to termination.
Once you have communicated the firing to your workers, you should coordinate with your payroll staff to process the employee’s final pay and related departure paperwork.
Follow up with your IT department to ensure all of the fired employee’s equipment is accounted for. You may want your IT staff to reroute the employee’s email address and phone extension to another employee who is temporarily or permanently taking over their job duties.
Your IT staff should also archive the departed employee’s email folders as well as any messages found on the voicemail system, in case there is important information that may need to be found at a later date.
Finally, have someone go through the departing employee’s desk and workspace and catalog any relevant work files, notes, and other important papers. Have them pack up any personal items that the departed employee missed, and arrange to have these items shipped or held for pickup.