If immediate termination isn’t wanted or warranted, use a last-chance agreement (LCA) to retain a marginal worker who shows some promise. It will show a court that you acted in good faith before ultimately pulling the termination trigger. A good LCA includes:
- The reason the LCA is warranted. Tip: Write it up with the idea that it must be clearly understood by a third party, such as a judge.
- The terms and conditions that must be met by the employee, including a specific deadline.
- The time frame that the LCA is effective. One year is common, but they can be indefinite.
- The consequences of failing to satisfy the terms and conditions of the agreement, i.e., employment will be terminated.
- An acknowledgment that the employee has read and understands the agreement, which the employee and you sign and date. If the employee refuses to sign, note and initial with a witness present that the LCA was reviewed with the employee and the employee refused to sign. Emphasize to the employee that the LCA is still in effect, regardless.