Lawsuits by employees are on the rise and we read from time to time of employees who have won massive court awards against their employers. The subsequent action is that the employer appeals, only for the same to be thrown out and often with costs. Sometimes these lawsuits have merit, sometimes they don’t. But, either way, those lawsuits cost time and money, money that can be utilized for beneficial employee activities. What could the managers be doing or failing to do that lands the employer with these unbudgeted costs?
Constructive Dismissal
Constructive Dismissal lawsuits are often triggered by the manager-employee relationship. The adage that employees don’t leave organizations, they leave their managers is true. An employee may be forced to resign from his job due to a toxic relationship with the manager. Such an employee will sue under Constructive Dismissal. A leader’s self-awareness and the impact they have on their team is crucial to effective leadership and influence.
Inadequate or no Communication
When an employee errs, a manager may fail to communicate the same to the employee. The employee does not know that the manager is building up a case against them and only gets it when their neck is on the block and they are on their way out. Anger and a sense of betrayal lead them to court.
Sloppy or no documentation
An employee is potentially headed for termination but the line manager does not document cases of employee misconduct or failure by the employee to deliver, and if they do, it cannot pass the test in a court of law. When they eventually recommend termination, it’s the manager’s word against the employee’s – the truth of the matter is that the employee erred, the reality however is that the manager cannot prove it. Clear documentation is necessary.
Good Performance Appraisal Reports
Performance reviews are important for managers and authentic feedback is necessary for employee performance and growth. Managers however inflate the ratings for various reasons including not wanting to be seen as a bad manager or to look good in the eyes of their teams. Such a manager cannot later cite poor performance as a basis for terminating the employee. This could well ring true of the saying that there are no bad employees, only bad managers. Honest and consistent feedback is necessary – it will save you from sitting on the hard benches in court.
Clueless about policies and procedures
You may have heard of a manager who terminates an employee and says – “you are fired! Let’s meet in court” – granted the employee deserves every bit of the manager’s anger and yes it’s easier to get rid of the employee and go to court if the employee sues for unfair termination than to retain him. However, courts expect supervisors to know their organization’s policies and
procedures concerning employee separation. Be slow to anger, or it will come back to bite you financially as well as your organization’s brand reputation.
Trumped-up or Cooked evidence
There are times when the manager just wants the employee out but does not have valid reasons for terminating them. They may start with a flimsy reason for a show cause letter, hurriedly followed by a shoddy hearing and quick termination. The employee goes to court and the court can see through the rush of disciplinary actions cited in the days before termination.
An employee who deserves to leave an organization will leave, just follow the due process.
Flawed Interviews
Hiring is expensive, in terms of the time and cost it takes to hire an employee. A hurried process may lead to the wrong hire, only for the organization to realize its mistake. Granted the probation period may save the employer from such a misfit of an employee, but it does not guarantee that the employee will not sue – Be careful about promises made at the interview and selection time as they could be used against the organization. Take time to know whom you are hiring, carry out background checks, and if necessary assessment tests.
Can’t Leave- Won’t Leave
A manager may be tempted to make promises to a fixed-term employee to the effect that they will be transitioned into a permanent role or a renewal of the contract. The manager may have no authority to make such a decision or the guidelines are crystal clear regarding fixed-term contracts. The time comes when the contract ends and the employee has to leave. He may sue to cite the promises made. Loose and ambiguous contracts are also another route to court. All employment contracts should be clear on the terms of termination or renewal in the case of fixed term contracts. It is also crucial that the manager handles the relationship with such employees at arms-length and with no promises made on changing the contract terms.
Taking time to understand potential pitfalls will save you time and costs if employee lawsuits arise. As a manager, you may also be sued in your personal capacity – this is unnecessary if the right leadership measures are put in place.