How to fire staff properly

There may come a time when an employer needs to terminate staff. Although the employer does have rights to hire and fire, there are still proper ways to do this. Failure to do so could result in emotional outbursts, which in turn lead to a lot of unnecessary consequences.

It would be good to start with understanding the different types of dismissal:

a.) Wrongful dismissal
A wrongful dismissal is a dismissal where you terminate a staff against contract terms or against statutory terms. This is usually termination without payment of salary, but it could also mean promises made. Although employers will be careful not to make promises in a contract, there will be cases where terms are implied into contract. If a staff has been performing well, met KPIs and even has had good performance reviews, these may imply that there will be continued employment.

b.) Unfair dismissal
An unfair termination arises can arise in several situations. Here’s an idea of what would would constitute unfair termination: groundless termination, victimising an employee, termination for reasons such as preferring someone with a lower pay, preventing wage increases.

c.) Summary dismissal
An employer has a right to dismiss an employee without notice on the grounds of the employee’s breach of contract terms. Although it may not be expressly written into the contract, all employees are implied to agree to good conduct, fair dealing, good faith, meeting KPIs and so on. A breach of any of these can bring on summary dismissal, the (common) law does not require an employer to provide reasons to the employee.

c.) Constructive Dismissal
Employers should also be wary about their actions that cause an employee to resign. Some of the grounds provided in law include:

  • Failure to pay wages
  • Change of job content not permitted (or envisaged) by the contract
  • Undermining a senior employee’s position
  • Change of the place of work
  • Unilateral change of hours
  • Failure to ensure employee’s safety
  • Breach of the implied term of trust and respect
  • Failure to follow a contractually binding disciplinary procedure and/or imposing a disciplinary measure in a disproportionate manner

Consequence of improper termination
If an employer dismisses an employee on grounds that are wrongful or unfair, the employee can sue to recover loss resulting from the premature release of his service. On top of that, the dismissed employee can seek the Ministry of Manpower or the Labour Tribunal to either order reinstatement of the job, or to order a sum of money as compensation.

Other extra-legal consequences include a scrutiny by tripartite partners (this means the Ministry of Manpower, National Trades Union Congress and Singapore National Employers Federation) that would attract sanctions such as refusal of foreign worker quota.

To prevent this, always put into place this thing called “due process”. Due process is not required by law, but it would clear any doubts as to whether or not the termination was proper.

If the breach is not major, start by documenting written warnings to the employee or remind them of company expectations through a written document. This would bring awareness of wrongdoing and provide the employee opportunity for correction.

If necessary, hold an inquiry. There are no formal procedures for this inquiry but the underlying principal is to allow the employee to present their case, to be heard. There should not be anyone on the panel that would bias the hearing.

Where guilt is found, an employer may do one of the following:
• Terminate service without notice and no salary in lieu of notice will be paid.
• Demotion
• Instant suspension from work without pay (for not more than 1 week)

This is due process and is professionalism by good HR practitioners. It would reduce emotional outbursts, unnecessary media attention and legal action. It would also give confidence and faith with your other employees, assuring them that the company does not fire without good reason.



Categories: Labour Law, Law, What's New?

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