What Is an Employee Termination Checklist?

An employee termination checklist is a printed or electronic handout that human resource practitioners use to remind them of the requirements needed when an employee’s contract is terminated on whatever grounds or basis.

According to an online article by TechRepublic, the coronavirus pandemic has forced countless companies to make the tough but necessary decisions on the employment of their staff. The global health crisis has resulted in layoffs and furloughs, with millions of people and families suffering the economic impact of the pandemic. Just a little around a month after worldwide lockdowns were implemented, more than 26 million unemployment claims were made. 

Reasons an Employee May Be Terminated

There can be several reasons why an individual’s employment contract is terminated. Usually, employees are given new hire orientations wherein the grounds for termination detailed and explained in the employee handbook. It is expected that the employee accepts these policies and thus is responsible for any conscious violation of the rules. The following examples are some of the most common reasons an employee ends up terminated in his or her respective workplace.

Disciplinary Issues: New hire onboarding will usually cover the grounds for employee termination prior to the start of the person’s first day on the job. Depending on the company or organization, disciplinary issues can be classified as minor or major offenses. An example of a minor infraction would be failure to submit certain documents on time. Sexual harassment and intellectual property violations are considered major cases. In all professional environments, discipline is not just highly encouraged, it is expected. A safe, civilized, and decent workplace requires everyone to act with a certain degree of discipline. Grave Offense: Major and serious offenses usually do not warrant verbal or written warnings. However, due process is still expected on the part of the company. If an employee is accused of a grave offense, he or she ought to be entitled to an impartial investigation. Because like in any lawful environment, there must be substantial and credible evidence presented before a person is condemned. Civilized society and law assumes that an individual is innocent until proven guilty beyond reasonable doubt. For instance, if an employee is accused of committing sexual harassment against a fellow employee, the company is required to investigate and collect data and testimonies. Before the employee’s contract can be terminated, he is entitled to a thorough inquiry. Repeat offenders may also fall under this category if the employee in question consistently ignores previous warnings. He or she may be terminated after there is no conscious effort to fix or improve the situation. Heavy Losses: There are certain events and circumstances that are beyond anyone’s control. Natural disasters, market crashes, and even health crises such as the COVID-19 pandemic are instances where a company cannot predict the outcome. In the case of the latter, the global pandemic saw a lot of companies suffer heavy losses from the public health crisis that came with dire economic ramifications. When a company is losing, labor can be a very sensitive subject. A company may be unable to afford expensive salaries or struggle to pay their debt due to profit losses. In these cases, the termination of certain employees could be seen as a necessary act to save the company. Retrenchment or Downsizing: Companies may also need to cut costs for whatever reason. Retrenchment, downsizing, or the restructuring of organizational structure are varied terms but they essentially mean the same idea. For example, company executives or leadership may feel that a major restructuring is required if the company is to expand to other ventures. Sometimes, there can be a high cost to business expansion and growth. If the company feels there is reasonable basis to cut down on expenses or create a leaner organization, termination of employment may be considered as a viable option. Incompetence: Another reason why an employee may be let go is due to consistent poor performance. Whatever the reason for the poor work output, a company may be forced to cut ties with the individual. Corporate environments are traditionally designed in such a way that productivity and the bottom line are what matters above anything else. If it is a skills problem, a good company would try to help and train the employee so they may improve their performance. However, the commitment and will of the employee is a deciding factor if it is to work out. But if the issue is more of a behavioral problem than a technical problem, then mere skills training may not be enough to fully address the root cause.

How to Properly Terminate an Employee 

Talk to any human resource practitioner and they will tell you that firing another employee is one of the toughest things to do in their field. Despite the difficulty of breaking the bad news, there is an ideal way to cut ties and inform an employee that they are being let go. If you are tasked with this challenging job, keep the following tips in mind:

Talk in private. The decent and respectful thing to do when informing an employee of their separation from the company is to sit them down properly in private. This is a given because you need to afford the employee the propriety and courtesy he still needs. You do not want to make the mistake of having the important conversation in public or with other people around. As much as possible, try to find a conference room or meeting room where you and the employee are away from any unnecessary distractions. Ask for their feedback. It is absolutely crucial that you allow the employee to express his opinions or grievances. Losing a source of income is never easy, and you need to practice active listening in the situation. Listen to what the person has to say and allow them to defend themselves, if ever there is some resistance or tension from them. It is important you remain calm and level-headed and help the employee understand the situation without being overly aggressive and indifferent to their needs. Stay sensitive to their feelings by making sure you grant them the space to voice their feedback.Prepare a transition plan. Having an outgoing employee always requires some changes or slight modification in the work dynamic. Depending on the functions and degree of responsibility of the outgoing employee, sufficient planning and preparation may be needed to adjust to their departure from the company. It is important for human resources or the employee’s department to collaborate with the employee in crafting a transition plan if it is required. This will make the turnover or transition smoother for everyone involved. Empathize but be professional. When breaking the news to the employee or even when conducting the exit interview, always try to practice empathy and compassion. It takes more than being a good listener, you have to act with kindness and respect towards the person. You need to be gracious and professional at the same time. Exit interviews are typically done by human resource practitioners, so a certain degree of professionalism and respectability is always expected.

How to Create an Employee Termination Checklist

The process for employee termination is not as simple as merely signing a document. There are several steps and procedures that you, as an HR professional, need to take into account to facilitate a smoother termination and transition process. The quick step-by-step guide below will walk you through how to create your own employee termination checklist.  

Step 1: Prepare the Basic Information

The first step is to cover all the employee’s basic data. Human resources should always have the complete file on the employee. Files that contain information such as application forms, medical records, performance reviews, memos or notices, and other relevant documents that concern the employee. You would need to prepare these ahead of time so you can easily locate and compile the necessary paperwork when the time comes. Even other basic information such as biometrics or computer passwords will need to be eventually deleted once the termination of the employee is finalized. For this, HR typically needs to coordinate with the IT department to wipe down any passwords and traces. 

Step 2: Customize Your Checklist Format

Prepare a checklist so you can be certain you do not forget any important matter. Your checklist can be detailed or simple, it depends entirely on your preference. Choose a format that you are comfortable with. A checklist is fairly self-explanatory; you just need to make sure that your format is organized and the details are accurate. If you want a straightforward format, using basic bullet points or a simple table would work just fine. The downloadable samples above are useful reference guides that you can use if you are unable to decide on a format. And for ideas on what to put in your checklist, you may refer to the same templates above.   

Step 3: Gather Important Documents

A key job in the finalization of employee termination is the preparation of important documents relating to the employee. If a resignation letter is applicable, make sure to obtain an original copy. The human resources department is tasked to furnish all the important documents pertaining to the finalization of separation. Clearance forms are one such example. Before an employee can officially sever ties with a company, he or she must be cleared of any pending transactions. For example, unliquidated receipts or incomplete reports must be attended to in order to prevent any further delays and inconvenience in their separation.     

Step 4: Schedule the Dates

A critical part of your employee termination checklist are the important dates you need to take note of. Human resources will typically schedule an exit interview once the termination or resignation has been initiated. Setting a date to sit down with the employee is required. It allows the chance and space to clarify issues and other concerns, as well as gain insight and feedback from the outgoing employee. In addition, you may also need to set specific dates for the official turnover of office tasks, functions and other items. Company property or fixed assets such computer monitors and office equipment would need to be properly returned as well. Again, human resources is responsible for initiating and facilitating these processes in order to conduct a smooth termination and/or transition.      


What documentation do I need to terminate an employee?

According to an online article by the law firm enterprise Akerman, documentation is of utmost importance when it comes to the termination of an employee. Some of these main records that need to be diligently filed include performance reviews, biodata application forms, medical records, job offer letters, attendance records, and other relevant documents signed by the employee.

What is an employee exit checklist?

An employee exit checklist is a complete checklist that can help serve as a reminder for human resource professionals on how to properly conduct employee separation or termination. It lists all the essential items and tasks that need to be accomplished to facilitate a smooth and seamless sending off.

What are the rules for terminating an employee?

There are numerous guidelines to follow when it comes to terminating an employee. The most important rule is to ensure that the termination is in accordance with existing labor laws, and that the grounds for separation are valid and lawful. There must be reasonable or just cause whenever the employer intends to terminate the job contract of an employee.

It is never an easy task to terminate an employee. For HR professionals, it is one of the most challenging and uncomfortable parts of the job. But if the grounds for termination are reasonable and clear, then it is an inconvenient but necessary task. Before sitting down with the employee, make sure you come well prepared with a comprehensive employee termination checklist. Browse the selection of sample templates above and customize your own checklist today!