Termination of Employee Contracts

1024 587 tony

Termination of Employee Contracts

Termination of an employee is a workplace interaction that is not very pleasant. It is also a risky undertaking as it can potentially expose a firm to legal action. This is why employers are advised to be cautious and seek legal advice when they feel they want to terminate the services of an employee. 

Employment Contracts

Employers are advised to provide employment contracts to their employees. An employment contract is important as it creates obligations and rights of both parties that can be enforced. The contract should limit the employer’s right to end an employee’s services without due cause. The contract should be well-documented on when and how the employment contract can be terminated, and it should also define the terms of termination. Then contract should also explain under which terms the employer hires the employee. It is important for the contract to be legally binding so that it can be enforceable in a court of law. This way, both the interests of the employer and employee are protected. The Texas rules indicate that an oral agreement that covers a term of less than one year or in case of a job that can be performed in one year that has been verbally agreed upon makes a legally binding contract. Other forms of employment contracts include:

  • Verbal agreements
  • Agreements required by law
  • Agreements that are in writing
  • Implied agreement that might not be in writing but both parties understand that they exist
  • Employment offer letter
  • Employment handbook
  • A firm’s notice board
  • Emails
  • Collective agreements
  • Faxes

Wrongful dismissal or ending an employee contract without giving the employee proper notice or failure to follow the right procedures or disregarding the employee rights set out in the contract can attract legal consequences. Additionally, contracts can only be modified if there is an agreement between the parties. Below are a few issues you need to aware of as a Texas-based employer if you wish to terminate the contract of your employee.

Texas Is an “At Will” Employment State

Texas has At Will employment doctrine which means that the employee or the employer is allowed to end the employment contract at any time for any reason except if the reason is illegal or prohibited. The relationship can also be terminated with or without reason by both parties. The employer is allowed to fire an employee without reason, and the employee too can choose to stop working for a particular employer without giving reason. However, there are exceptions to this rule.

Mutual Agreement On Other Terms

The At-Will doctrine can be changed or done away with if the parties agree to other terms. The agreement, in this case, must be mutual. These terms should be put in writing by the employer. The terms should also be well understood and standardized.  However, the employment application and offer letters should always emphasize the At-Will doctrine of employment.

In case there are binding contracts that are in written form, they can override the At-Will nature of employment and give more protection to the employee. It is essential for the employer to beware if there exist other specific agreements on employment or binding written contracts that can override the At-Will doctrine.

Federal Protection

The law of employment is legislated at the state and federal levels, and protection is extended to some classes of employees and individuals. Thus, an employer must ensure that the termination of an employee does not touch on those employees that are in the protected class and if the employer must fire such an employee, he or she should follow the right procedures. Employment and termination of employment decisions that are based on the individual’s age, gender, race, pregnancy, religion, and national origin are not acceptable. The Law further prohibits termination of employment due to reasons such as the individuals serving on a jury, being a whistleblower, filing of the worker’s compensation among other reasons.

Prevention Of Risks

If you are aware of the risks, some management practices can help you avoid some of them as an employer including:

  • Create written records of your firm expectations for the employees and come up with documented evidence of escalating issues that can result in termination.
  • There should be documented employees rules, duties, and expectations which should be provided to the employees. If you have a handbook, give it to each of the employees as they commence their employment and have them acknowledge that they got it and have understood its contents.
  • As an employer, every disciplinary action should have a record. Other management level employees should be part of the disciplinary and counseling sessions. It is also advisable to give written warnings, provide evidence of unsatisfactory works and work habits and ensure the employees acknowledge them by signing the document.

Seek Legal Help

Whenever you are not sure how to go about terminating an employee, seek the help of a trained legal professional who is well aware of the employment laws in your state. In case you have such a need, or you would like advice on the same, do not hesitate to contact RunRex for professional services and help.