Average cost of employee litigation is topping $150,000 in the current landscape. This further increases the need of making ethical hiring and employment decisions. This is not only essential to keep your workplace culture intact but also to keep your company profitable.
To avoid high litigation costs, the need for avoiding lawsuits is painfully obvious. Here, we discuss some steps that managers can take to save their company billions of rupees in the long haul.
Small background checks can save you millions in the long run. Check the references for a candidate, call their past employers and always verify the sanctity of the information provided to you by the employee. These might seem painstaking but will help you prevent the possibility of hiring someone unlawful.
Prerequisite knowledge of what type of activity can get you, your management be it your boss or your colleagues fired will go a long way in preventing future legal action or lawsuits for wrongful termination.
Always have proper documentation of reasons for firing somebody. Failure to provide a proper explanation along with proof is what leads to complicated lawsuits and might put you and your company in an ugly legal complication.
Another good practice is having upper management present at the time of firing an employee. This lends accountability and complete transparency to the action and also creates witnesses and avoids word of mouth arguments in court.
Even though it’s a laborious effort, always have a written explanation of why any employee is leaving the company. This can protect you down the road if the employee tries to sue your company or file a case for wrongful termination.
Proper paper trail eliminates all possibilities of a lawsuit and acts as powerful proof in the court. It doesn’t harm anyone, rather enhances transparency and accountability.
Also in the post covid world, working from home might become the norm, and employees could store a lot of IP on personal devices, so get a written document signed by the employee stating that he or she has returned all company property and deleted all sensitive data from their own devices. There are some modern complications which might hurt you in the long run if proper documentation is not maintained.
Keep every possible record from performance reviews to statute changes. Ensure that you maintain a good collection of employee files which may need to be produced if you have to show a certain trend in history. These records should include disciplinary notices, promotions or demotions, payroll records, job applications, resumes, etc.
This is your most important responsibility. The most common reason for facing a lawsuit is not taking action against a formal complaint. Always acknowledge legitimate problems, this could go a long way in avoiding future employee-related lawsuits. If a formal complaint is registered, make sure it is dealt with the utmost seriousness. Be proactive and clean any mess before the situation escalates.
These are some ways in which you can avoid lawsuits and make ethical hiring choices. Train your management staff professionally in employment policies and practices so that minor slips can be avoided which may cost your company a huge amount.
