The Right Way To Deal With Contract Terminations And Layoffs

The Right Way to Deal With Contract Terminations And Layoffs

When you are an employer, one of the most difficult parts of running a company can be the management of employees. Here is an article about the right and wrong ways to handle contract terminations and layoffs when they are unavoidable.


We’ve all read about the horror stories associated with contract terminations and layoffs. Some employees have received a mere text message informing them that they have been made redundant or laid off. Others have shown up to work to find their office locked up – without any forewarning or notification. Insolvency experts MGJL agree that redundancies and terminations should not be done this way. Instead, they should be made with careful planning and consideration for the employee.

Dismiss Young Businesswoman In Office

If you are an employer using this type of termination tactics, it is important to understand that this can cause great uncertainty with your company. The rumor mill can be explosive and other employees will begin to wonder about their jobs. They may panic and choose to take a job elsewhere just in case. This is far from ideal and does beg the question as to how a business should deal with redundancies, layoffs and terminations.

If a contract is coming to an end, then it really shouldn’t be a surprise to the employee, unless they have been advised otherwise beforehand. Keep your employees updated as to the status of their contract and what it entails. Open communication is the best possible scenario here.

If an employee is facing a contract termination due to under-performing, this again shouldn’t come as a surprise. Their performance short comings should be explained to them privately – giving them time to improve and correct the situation. Keep in mind that some people work in a number of different ways, so communication is vital for things to improve. Simply ending someone’s contract, without giving them the chance to correct the situation first, can be a shock to both the employee and other staff.

After notifying a under performing staff member, and allowing them to attempt to improve, should the employee continue to not meet expectations, it should come as a surprise to no one if the contract or employee is terminated. Your company will also have documented that all appropriate steps were taken prior to the termination.

Another worry for companies and employees is redundancy or layoffs. Sometimes companies, for financial reasons, have to make cutbacks. This is very rarely a pleasurable experience for anyone. communicateHonesty is vital at such a worrying time. The more information you can give your employees the better. Are they the ones who will stay or go? If they are going, the sooner they know, the sooner they can begin to seek employment elsewhere.

So communication is the key when you are running a business. Talk to your employees honestly and openly about contract periods, performance, layoffs and so on. Review them often and tell them what they are doing right and wrong and always give them the chance to improved. When terminations are inevitable, handle them with dignity.