Many employers are scared of the legal dangers they may face from a wrongful dismissal lawsuit, and as a consequence are overly hesitant about getting rid of troublesome employees. As long as you are careful, have good quality business documents and follow a clear procedure, you've got nothing to worry about, but many employers continue to make critical (and costly) mistakes when it comes to dismissals and firing. Five of the biggest errors that managers make are:

Failing to document the history of the dispute

Make sure your dismissal of an employee is legal; document every stage of the process, from beginning to end. Every time you have a disciplinary discussion with an employee, however minor, make a note of it in their personal file.

You have to demonstrate, in writing, that you have communicated your concerns to the employee and made an ongoing attempt to improve their performance before letting them go. Even if the first few discussions are informal chats about where you feel the employee needs to improve, put it on record. If the worst comes to the worst and you face a legal dispute, you'll be able to refer to your business documents and show that you made every effort to correct the situation before terminating employment.

Not giving a work related reason for the dismissal

If you are asked to give a reason for dismissal, don't let things get personal, even if you are directly provoked by an employee or if a personal dispute is a large part of the problem – the consequences could be serious. Keep your reasons professional.

Some of the potentially acceptable reasons for firing include:

- Violation of written company policies; such as harassment, discrimination, non disclosure agreements, or other official business documents

- Consistent lateness or absenteeism

- Violence, drug use or alcohol abuse in the workplace

- Illegal actions or providing false information to the company

- Consistent incompetence in the workplace; though you'll need to prove this and show evidence in writing (see above)

Not following company policy

Whatever your company policy is on employee dismissal, stick to it. This business document should provide a clear outline of the process, including the number of warnings given before dismissal (verbal and written), the length of any probationary periods, and the appeal and complaints procedure for the company. It must be a written document, and it must be readily available to your employees. Every case is unique, and it can be tempting to skip some stages if you think the dismissal is an open and shut case, but if you do this the consequences can be severe.

Not having a witness

You don't necessarily need a witness at every disciplinary meeting, especially earlier on in the process where things are less formal. But when things get serious (at final warnings and exit interviews, for example) make sure you have an independent witness there; without a witness, it is just your word against the employees as to what was said. The Human Resources Manager, Office Manager or the employee's union representative are all good choices for this witness.

Leaving it too late

Firing an employee is a tricky and difficult process, and it is easy to put it off and delay the inevitable. But employees usually find out fairly soon if they are in the firing line, whether it is by an accidental leak, an overheard conversation, or just from your general attitude towards them in the workplace.

If an employee catches on and realises that they may be heading for the door, they can cause a lot of trouble before you finally get around to firing them. Without any incentive to do well at their job, they will likely put in the bare minimum of effort. They will have a negative impact on those around them, in terms of productivity and moral; worst of all, they may start to prepare a legal challenge against their upcoming dismissal. Make a decision, get your legal documents in order, and act quickly.