Termination Calculation & Authorization Form

Termination Calculation & Authorization Form

Calculate & Get the Green light
to proceed with Involuntary Terminations

Involuntary Termination Authorization Form

This document is a template spreadsheet that will help your company calculate the costs associated with terminating an employee, and to obtain authorization to terminate. 

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Overview

Regardless of the jurisdiction in which you operate, when involuntarily terminating the employment of an employee, it's important that you establish appropriate protocols when doing so. One such protocol is calculating the costs associated with termination and obtaining approval to proceed with the termination. As terminations are governed by legislations, it`s important to get the calculations correct. 

Involuntary termination is a stressful experience for both the individual(s) carrying out the termination as well as for the employee. Various factors contribute to the high stress levels. Often times, it's request from the management for a termination to be carried out quickly for various reasons. To ensure accuracy of data and speed are not compromised, it helps to automate the termination process to reduce potential errors arising from manual calculation. The use of an Involuntary Termination Authorisation form is an efficient way to automate the process. The Authorisation Form has cells with built in functions which enable termination costs to be calculated quickly. For example, to calculate pay in lieu of notice as per Employment Standards, input data required are (1) entitlement as per Employment Standards (in weeks) and (2) employee earnings. The Form calculates the pay in lieu of notice automatically. Also, the Authorisation Form acts as a proof that the termination is authorised and that termination payout has been approved.  

Besides ensuring termination costs is calculated correctly, HR also has a major role to play in ensuring terminations are carried out in a fair manner and with compassion, and that all due dilligence has been carried out. This helps avoid allegations of bad faith termination or wrongful dismissal. Check this additional resource on involuntary termination which includes a process guide for managers on how to conduct an involuntary termination.

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How the Involuntary Termination Authorisation Form is Used?

Once this ConnectsUs document has been modified for your company, HR staff will use it for each involuntary termination, as follows:

  • Complete the form details.
  • Collaborate with the employee’s Manager, senior management team, and Finance to approve the termination and ensure that the form is completed to comply with audit and approval processes.
  • Retain the approved document on file for audit purposes.

Why need an Involuntary Termination Authorisation Form?

  • Each termination should be approved by an executive, if not the CEO.  Firing someone should not be left to the discretion of any one manager.
  • It's often an eye opener for management when they understand how much it may cost the Company to proceed with termination.  Providing this information up front may prompt management to reconsider or be strategic about the termination.   
  • The form acts as a checklist to ensure that you take into account all factors that may affect a termination.
  • Ensures you're compliant with Employment Standards. 
  • Acts as an individual's termination summary that can be used to send to your employment lawyer in the case you use one. 
  • The exact payments, dates and benefits that will be provided to an employee is listed for Payroll and reduces the chances of errors or miscommunication.

What are the Risks if you don't use an Involuntary Termination Authorisation Form?

  • Legal risks to the company if legislated payments are accidentally left out or calculated wrongly.
  • Terminations are carried out without proper authorisation. 

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Termination Calculation & Authorization Form  |  Accompanying Instructions for Staff

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