I have never met an employer who likes to fire an employee. Firing someone is awkward. People generally do not like to think of themselves as the bad guy. And every employer I know cares about his or her employees, and most of the time is hurt to know that he or she is causing one of them to become unemployed. Therefore, I have met employers who, rather than telling an employee that he or she is being fired for doing a bad job, calls every firing a layoff. After all, this makes the employer look like he or she is not a cruel person causing someone to become destitute, but rather a helpless victim of economic forces outside of his or her control.
This strategy, however, can be risky. Most suits brought by fired employees claim that the employer’s stated reason for the firing was false, and merely a pretext to engage in illegal discrimination. If an employer claims that an employee was laid off when he or she was actually fired for doing a bad job, this will support the employee’s claim that the stated reason for the firing was false. In order to prove that an employee was laid off, the employer will have to show that there was a legitimate business reason for the layoff (i.e. to reduce costs or the position is no longer needed) and to demonstrate that its selection of the employee was not due to illegal discriminatory reasons (i.e. based on the employee’s race, religion, gender, etc.). If a new employee is hired immediately after the “laid off” employee leaves, it is going to be hard to prove that there was a legitimate business reason for the discharge.
Also, if an employer is sued by the laid off employee, and the case goes to trial, an employer’s credibility might be ruined with the jury if the employee shows that the employer lied about the reason for the employee’s discharge. The jury might choose not to believe anything that the employer says in the trial.
Additionally, claiming that an employee is laid off instead of fired might actually require the employer to rehire the employee at a later time. Sometimes collective bargaining agreements and other employment contracts require a laid off employee to be rehired if his or her old job comes back.
When it comes to firing, employers should heed the old adage that “honesty is the best policy.” While telling an employee that he or she is being fired might be painful initially, it is better in the long run than trying to protect the employee’s feelings by pretending that the employee was laid off.
