If you are thinking about firing an employee, the primary step in the process will be to determine if a contract exists between your company and the employee. Indeed, the employment contract might limit your flexibility, by providing the employee with a specific term of employment, listing the acceptable reasons to fire or by mentioning the need of a “good cause”. The good cause consists in a legitimate reason to fire an employee and can be related to business, needs or goals. For example, refusing to follow instructions, habitual tardiness, harassing workers or excessive absences can all be considered as good causes for firing an employee.
Also, the written agreement might entitle the employee to the payment of a severance package so make sure to double check the contract before letting go of your employee.
However, even when there is no written contract between the employer and the employee, the existence of the contract might be implied by the nature of the work relationship. That can be the case when you made a promise, even oral, to one of your employees, such as job security or when the employee’s manual states, “after the 90 days probation period, the employee becomes permanent in the company”. If the contract is implied, you will then need to have a good cause in order to legally fire your employee.
If after this investigation you made sure that there is no contract, then your employee is working “at will” meaning that you can fire him at any time, for any reason unless the reason is illegal. Indeed, state and federal laws prohibit employer for using discriminatory justifications; such as race or religion; in order to fire employees.