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Review employee personnel file before terminating

By Yosie Saint-Cyr, LL.B., Managing Editor at HRinfodesk.com---Canadian Payroll and Employment Law News, October 2008

2008 and 2007 were busy years for the courts with regard to wrongful dismissal and discrimination claims. Terminating employees can be one of the most difficult and stressful functions that a supervisor/manager or human resources professional can face. Aside from the emotional component, there are a number of legal considerations that must be well thought-out. Proper planning for a termination can reduce the employer's risks of facing a discrimination lawsuit and lowering morale for remaining employees. A combination of preparation and documentation is the key to a successful termination. Also, a termination should usually be a last-resort measure.

In our latest HRinfodesk poll, participants were asked whether Before terminating an employee, I study the personnel file to get the whole employment history.... Out of 292 respondents, it is encouraging to hear that the majority (212, 72.60%) stated that yes, they do review the employee's employment history found in the personnel file before terminating, and only a small percentage of respondents did not (12/4.11%) or hardly did (13/4.45%).

Well there is logic behind reviewing an employee's personnel file before termination. Dismissing employees without having substantial documentation of the reason of termination in their personnel file is asking for trouble. Whenever you are terminating an employee, and for whatever reason, you need to see the whole picture. Hence, it is imperative to review an employee's performance and personnel file.

Below is a breakdown of the results of the poll on the topic of reviewing employee personnel files before termination. We are also providing a comprehensive overview of the topic and the legal implications.

Reviewing personnel files at times of termination

Planning and documentation are the keys to a successful termination.

Unfortunately, the planning and documentation start at the time of hire. You must set out reasonable expectations from the beginning.

When new employees start, you have to provide them with a job description that clearly defines their duties and responsibilities. They should also receive a copy of the company's workplace policies, especially discipline and code of conduct policies, if applicable. By providing this information up front, you can establish a framework to evaluate the employee's performance and to provide discipline if necessary.

You should conduct regularly scheduled performance evaluations. The employee's orientation should also set a time frame for a performance review. Keep copies of all performance reviews and disciplinary measures in the employee's personnel file. Communicate and have the employee acknowledge and provide input on reviews and disciplinary measures. Reviews should not be inflated or inaccurate, and should give the employee an opportunity to improve if necessary. The employer should take whatever action necessary to help the employee improve, such as training, education or accommodation.

Also, every time you notify the employee that his or her job is in danger, it should be in writing. The notice should indicate what the outcome will be if the employee's performance or other conduct or issues does not improve or correct itself within a specified period of time.

Enforce company workplace policies consistently and fairly. Whether or not your business has a written manual for company polices, establishing a pattern is crucial. Be sure to retain written copies of warnings and violations in the employee's personnel file. Finally, whatever the company's discipline policy is, apply it to each employee the same way. These steps show a pattern of fairness and willingness to work with employees before turning to termination.

Before deciding to terminate, it is imperative to review an employee's performance and personnel file. What does this imply?

  • Compare the employee's performance to the job description
  • Review the employment offer and/or contract to ensure there is nothing that specifies length of employment or indicates that employment lasts as long as performance is satisfactory or something similar
  • Review any performance appraisals, warnings or other correspondence with the employee that is in the file
  • Review the company's disciplinary procedures and termination policy and procedures
  • Ensure that these policies have been and are being applied consistently and fairly, but specifically at this time, to the employee in question
  • If appropriate, meet with the employee to review shortcomings and give the employee the opportunity to improve
  • If the employee's performance reviews or personnel file do not contain evidence of poor performance, the company may have trouble defending itself from a post-employment discrimination suit
  • If the employee is in a protected class due to age, gender, race, etc., you are well-served to consult an employment lawyer prior to the termination to lessen the chances or success of a post-employment discrimination suit

A well-documented history of non-performance or disciplinary issues can show that the decision was made for legitimate job-related reasons and not based on the employee's personal characteristics or protected class such as age, sex, race, religion or disability, or any other reasons not related to the job.

Prepare for everything before the termination meeting. It is important that the employee fully understands why they are being terminated. Therefore, it is a good idea to rehearse the meeting beforehand. Prepare by reviewing the employee's file and writing out the specific key points and facts that are pertinent to the situation.

If you are unsure that your grounds for termination will hold up in court because of lack of evidence or for any other reason, the advice of a good employment lawyer can help you avoid any legal entanglement. It is important to consult them before-and not after-the termination.

What is a personnel file?

Every jurisdiction in Canada has employment standards legislation which stipulates the required contents of employee personnel files, as well as the specific length of time employers must retain the records. Nearly all employers are required to keep current personnel files, but the specific requirements vary by jurisdiction. Accordingly, employers must refer to the legislation that governs their particular jurisdiction in order to know with certainty the requirements with which they must comply. In addition to what is required in several statutes, employers and HR managers must keep all types of employee information related to the employment relationship. Employers need basic information about their employees for things like pay and benefits or other entitlements, and they have to be able to ensure that work is being done efficiently and safely.

First, a personnel file is an historical register or record of information pertaining to an employee from the date of hire, identified by the person's name or by any number or symbol corresponding to that name. It is not necessarily just a folder of documents. Anything that can be reasonably retrieved regarding a person's employment may be considered a part of the employee's record. This may include calendar notations, email and other online documents, work logs and journals.

Second, the information that belongs in the personnel file includes job-related materials including information on employment, such as the employee's application, offer letter and acceptance letter; the job description and performance expectations; development records, such as training, education and degrees; performance records, such as appraisals, counselling memorandums, disciplinary letters, special awards or commendation letters; time and attendance records; salary and incentive history, emergency data; and personnel action forms.

As for medical information and Workers' Compensation claims, to protect the privacy of the employee, any documents that relate to an injury or disability must be kept in a file separate from the rest of the personnel documents. They may be kept inside or adjacent to the personnel file, but should be separate and easy to remove if the file is requested for review.

In addition, all grievances, dispute resolutions and investigations (internal or external), as well as pre-employment references, credit reports or wage garnishments, which are all administrative processes, should be kept separate. They may be kept inside or adjacent to the personnel file, but should be separate and easy to remove if the file is requested for review.

The personnel file should be located in the department personnel or human resources office or in the manager's or supervisor's office. All personnel files should be maintained in a secure setting to ensure that access is limited. Employees should not have custody of their own personnel files.

Some managers or supervisors express a desire to keep a working file for each of their employees, which may include work samples, notes about discussions with employees or feedback from customers. They want memory joggers so that discussions with an employee, or the annual performance review, will be as specific and objective as possible.

According to HR professionals, a working file is not prohibited, but there are a few things to keep in mind:

  • It's not a secret record and it's entirely appropriate for employees to know the working files exist
  • It should be used for its stated purpose, with material being incorporated into appraisals or other formal documents in a timely manner
  • Any request to review the personnel file, or for copies of records, may include the working file as well as the official file; all these items are part of the employee's official record
  • Once the material is used in another document, such as a performance appraisal or corrective action, the notes should be destroyed; if they are not ultimately used, they should be destroyed

Third, usually the manager or supervisor will determine what documents will be placed in the file. However this is driven by good judgment, company guidelines and policy. The manager or supervisor should have a conversation with the employee before placing a document in the file, and should give a copy to the employee, if applicable. If an employee transfers, the file should move to the new department. The old department should retain records of attendance and time worked and forward copies of those records with the rest of the file. Some departments keep a copy of the entire file, which can be useful if they are contacted directly for reference requests or copies of records.

Fourth, the following persons are allowed to review the file: the employee or the employee's designated representative, the employee's supervisor/manager or department head, the human resources department, a prospective hiring department, employee relations or labour relations staff with a job-related need for information.

Access may be guided by personnel policies or union contract provisions. Guidelines should be based on law. Requests to review a file should be in writing and logged. All reviews by employees should occur in the presence of the supervisor/manager or another department representative or human resources manager.