Top Nine Termination Mistakes Made by Restaurants

The hospitality industry is plagued by high turnover rates. While having an employee quit can be difficult, firing an employee is even more complex and can open you up to a lawsuit. So how do you minimize risk?

Reviewing your employee handbook is a great first step. Having the right policies in place to help you deal with the tricky business of parting ways with employees is a vital part of your HR toolkit. And following those policies to the letter is essential, even in a busy restaurant environment. To help you identify weaknesses in your dismissal process, let’s look at nine common termination mistakes made by hospitality employers alongside best-practice tips.

Haste Makes Waste

The circumstances surrounding a termination, particularly a harassment claim–a huge issue in hospitality right now–may mean you want to act quickly. However, few scenarios require a snap decision and firing an employee without substantial information that supports the termination could leave you open to a potential lawsuit further down the road.

Get it Right: With a clear head, look closely at every report, review and document relating to your employee. Establish their work history, determine if there are any red flags (ex. open workers comp claim/s, employee is under a protected category, etc.), any corrective actions, their current work situation, and any special contractual circumstances that may have a bearing on a termination. With this information, you’re able to proceed with confidence and clearly articulate your reasons for the dismissal.

Lack of Records

Is your reason for firing an employee poor performance? Perhaps they repeatedly failed to show up for their shift? Or maybe they’ve been lax in following safety procedures in the kitchen? If you haven’t documented several performance issues or behavioral incidents during their employment, you’re going to have a hard time justifying a termination based on what they may argue is a “one-off” incident.  

Get it right: Do everything by the book. Keep your records accurate and up to date, including performance reviews and disciplinary issues. If your records aren’t current, this may not be the right time to let the employee go. And remember: If going your separate ways proves to be the best course of action, you’re required by law to keep their files for three years.

Policies? What Policies?

Many restaurants don’t have a thorough or up-to-date employee handbook, which is the first obstacle. For one, if you haven’t made the current expectations and processes clear to all employees, they can simply plead ignorance or challenge their dismissal with a wrongful termination suit. Even when you have a comprehensive termination policy in writing, if that information isn’t fresh in your mind, you can’t be sure that you’re working within your latest guidelines.

Get it Right: Commit your handbook to memory. Give every employee a copy of your handbook and ensure that they’ve read, understood and agreed to your procedures. When proposing to fire someone, make sure you really understand the provisions that they’ve violated. If in doubt, seek legal advice.

Poor Communication

One example of poor communication is giving an inconsistent explanation about the reasons for dismissal to your employee. Another example is being careless with what you tell other staff members. If word reaches your ex-employee that the team knows the details of his or her termination–substance abuse, for example–you could find yourself dealing with a defamation claim.

Get it Right: Before you talk to your employee, get clear in your own head the reasons for the termination. Write them down, back them up with documented examples and then stick to them. Being consistent, concise and truthful is essential throughout the process. Also, avoid over-apologizing, talking too much, or making jokes (what may be intended to lighten the situation can come across as callous).

Every employee deserves to be treated with respect, so the details of their termination need to be kept strictly confidential. Make sure they’re the first to hear about any decisions. When communicating with the rest of the team, keep it brief, respectful and focus on how to spread the workload in the interim so you can keep delivering a great hospitality experience to your customers. 

Acting Inconsistently

As an employer, it’s vital to demonstrate that you’re fair and respectful to all employees, without exception. This means faithfully following the rules laid out in your handbook.

Get it right: Ensure you’re up to date with any changes to your handbook so you can apply the correct procedure to every incident. Give every employee a copy of the latest version, encourage them to read it and make sure they know that you’re always happy to answer questions.

Engaging in Retaliation

Sometimes, termination disputes boil down to perspective. Let’s imagine you’ve had to speak to an employee on several occasions for being rude to customers. If it happens again, a termination may feel like a natural next step. However, what if the reason the employee was rude to customers recently was because the customers initially harassed the employee and the employee had brought this to your attention? Did you do your necessary investigation in regards to the employee’s statement? How did you handle those earlier discussions?  

If the employee has been unable to meet your expectations, for whatever reason, they might interpret your actions as persecution due to the recent harassment claim brought to the management’s attention. In this instance, you could find yourself facing a lawsuit.

Get it Right: Before termination, consider the situation from all angles. Did your employee recently engage in a protected activity, such as coming back from a medical leave of absence or made a recent claim? If yes, yet you choose to terminate them, then you could be subject to an employer discrimination claim. It would be best to seek professional advice in this instance to avoid any potential lawsuit.

Not Having a Post-Termination Plan

Disgruntled employees can wreak havoc on your business even after they’ve left. The last thing you need is an upset ex-employee with keys to your restaurant or bar. You also need to know how you’re going to fill the vacant position and handle the workload to ensure zero disruption to your customer experience.

Get it Right: First of all, recover all company equipment, credit cards and keys from your ex-employee. Be sure to lock them out of your IT system. Then have a plan about how to redistribute their duties amongst your kitchen or front of house team while you wait to hire someone new.

Failing to Pay Vacation

Restaurant owners are less likely to offer a full raft of benefits, so you may not offer a vacation package. However, if you do, be aware that any unused vacation time is considered wages earned and must be paid.

Get it Right: Include earned but unused vacation time in your employee’s final paycheck at the time of termination.

Not Seeking Advice

Some cases are emotional, lengthy and complex. Fail to handle them with care and you could be vulnerable to a wrongful dismissal or defamation suit.

Get it Right: Your business can ill afford a tarnished reputation, and with margins as tight as those in hospitality, you don’t want to be hit with an expensive legal claim. So when risk is high or you’re just not sure how to proceed, contact an HR specialist or employment lawyer* immediately to save yourself unnecessary grief and expense.

*NOTE: CRA members have access to 15 minutes of free legal advice each month and can access a variety of legal white papers on hospitality subjects at calrest.org/legal-center.