Letting go of employees isn’t easy, but it’s important that you follow the correct process when you do so.
Offboarding an employee involves having the right documents in place, but it also requires revoking access to certain systems and software to protect your business’ privacy.
When offboarding employees, protecting your inside information becomes even more important as you don’t want ex-employees carrying your valuable information with them after they leave (especially if they end up working with a competitor!).
To make things easy for you, we’ve compiled this checklist for offboarding your employees.
What Does The Offboarding Process Involve?
When offboarding employees, the process involves having the right document signed by parties. For example, it’s best to have your employee sign a formal letter of resignation before they leave, and you should keep this in your business records.
These legal documents are important for keeping a record of your employment history – more on this later!
You’ll also need to ensure the employee that is leaving transfers their skills and knowledge to the relevant employees in the team. This could involve transferring access, login information or teaching required skills through training sessions.
In some cases, your employee may request a reference or Letter of Recommendation.
Revoke Access To Software And Other Systems
You also need to remember to revoke their access to your systems.
Your employees have access to a lot of your valuable and confidential information when they work with your business, so before they leave, you should cut off their access.
In addition to removing their logins and passwords, you also want to have Confidentiality Clauses and Non-Disclosure Agreements to strengthen your IT security.
Non-Disclosure Agreements (NDAs) ensure that parties to the agreement do not share or disclose certain information to third parties. It’s always safe to have your employees sign this agreement before they leave to ensure any inside information is kept private and secure.
Confidentiality Clauses are often included in agreements to ensure that information is kept confidential. Once again, it’s safe to get your employees to sign Confidentiality Agreements to keep certain information private.
These are only some of the ways you can protect your intellectual property. If you’re unsure about your next steps or need more help with your business’ IP, chat to our expert lawyers who can answer your legal questions.
Check That You Have A Non-Compete Clause
It’s common business practice to include a Non-Compete Clause in your Employment Contracts from the beginning of any employment relationship.
As a business owner, you always want to be on your feet and thinking about key risks before they happen. This way, you can prepare your business for the worst case scenario and minimise any losses you face.
A Non-Compete Clause ensures that employees do not work with or engage any competing business in your industry. This would put your business at a disadvantage as that employee learned skills, information and obtained knowledge from their employment with you, and working directly for your competitors would put you in a weaker position.
While Non-Compete Clauses are common, they can be rendered invalid by the court if it is considered unfair. For example, the duration of the effect of the clause cannot be unreasonable, and the restriction on location should also be fair.
It’s best to get a lawyer to draft your Non-Compete Agreement to ensure it stands in court and effectively protects your business. Whether employees leave your business is often out of your control, but you can take measures to ensure it doesn’t leave you disadvantaged as a business!
Check Clauses On IP Ownership
When you first prepare documents for most business engagements or projects, a key matter to discuss or settle is who owns the intellectual property being handled.
In most cases, businesses will clarify in their legal documents that they retain legal ownership of intellectual property, including those created by their employees during their employment. For example, in Employment Contracts specifically, there is generally a clause stating that employees agree to transfer any IP ownership and rights to the employer before they sign the agreement.
It’s worth reminding your employee of this transfer of ownership and IP rights generally before they leave.
In the case of a dispute, the Employment Contract should also set out a specific dispute resolution process for all parties to follow.
Get Your Termination Legal Documents
Now that we’ve covered the legal documents that businesses commonly have in place with employees from the beginning, let’s discuss the documents you’ll need to prepare for their exit.
Firstly, you’ll need to provide a Letter of Termination (or your employee could hand in a formal Letter of Resignation). Make sure to keep this as part of your business records.
Next, you need to provide a written summary of your employee’s payroll details (including their final pay). Once again, these should be kept safe with your other records as this is your obligation under the law.
And, like we mentioned above, you’ll need an NDA and any relevant confidentiality clauses to ensure your ex-employees do not disclose any valuable information to anyone else, even after they leave.
How To Offboard An Employee Who Works Remotely
Even where your employees are entirely remote, you still need to uphold your employer obligations. For example, you still need to comply with your Work Health and Safety obligations if your employees work from home.
When it comes to offboarding, you should have a process in place to ensure that all the right legal documents reach your employees online. Additionally, it’s important that your software is secure enough to manage this offboarding process in a confidential manner.
A handy way to manage documents online is by having e-signatures. Sprintlaw has an e-signature tool that we offer as part of our Sprintlaw Membership. This way, your employees can sign contracts online and you can have all of your key documents in one online, secure platform. Contact our team to learn more!
Even if your employee works remotely, it’s still important that you set up a meeting with them to finalise all the details of the offboarding process and ensure you’re both on the same page. This also provides them with an opportunity to raise any issues or questions they may have.
Make Sure Your Termination Is Legal: How To Avoid Unfair Dismissal Claims
Making sure your legal documents are taken care of is one thing, but ensuring you avoid unfair dismissal territory is another.
Unfair dismissal can be claimed where an employee believes the way they were terminated was unfair or unlawful. For example, unfair dismissal could arise where an employee was forced to resign.
Where unfair dismissal is involved, legal action could be initiated against your business. When terminating employees, it’s important that you have reasonable grounds to do so, before you even kick off the offboarding process.
We’ve written more about unfair dismissal and what employers should know about it.
Need Help With Your Offboarding Process?
Protecting your business and upholding your privacy obligations is something you should consistently consider, even when offboarding employees.
However, it can be a long and overwhelming process when you think about the documents, processes and interviews to prepare. At Sprintlaw, we offer an Employee Termination Advice package to help you with the process.
Sprintlaw’s expert lawyers have a wealth of experience in employment law, and are happy to help you out. If you would like a consultation on your options moving forward, you can reach us at 08081347754 or [email protected] for a free, no-obligations chat.
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