Key to an NGO or nonprofit’s success is having the right people in the right roles to do the hard work of advancing the mission. Sometimes, unfortunately, employees don’t work out, and just like any employer, nonprofits and NGOs have the unpleasant task of terminating a worker.
This is a challenge in nonprofit organizations that needs careful consideration because employee termination or dismissal could have a negative impact on the nonprofit or NGO’s reputation and credibility.
Here are some of the key considerations for nonprofit employee termination.
Consider a country’s employment contract laws
A country’s employment laws apply to both for-profit companies and nonprofits/NGOs, so it’s important to understand all contract requirements and when hiring internationally.
One consideration for terminating an employee is whether their home country practices at-will employment—a practice where an employer may terminate an employee at any time and for any reason (within the confines of the law) without legal repercussions.
At-will employment might make things simpler, but the truth is, the majority of countries do not practice at-will employment. As a result, your organization must establish and justify reasons for termination. For instance, in Mexico, some legal grounds for termination include:
- Misrepresentation of qualifications for a job
- Threats or acts of violence at work
- Causing serious damage to an employer’s property intentionally or through negligence
- Coming to work under the influence of alcohol or nonprescription drugs
- Bullying and acts of sexual harassment
In countries where you must document a justification for termination, make sure to research your nonprofit or NGO or nonprofit’s ability to fire someone for acting in a way that’s incompatible with your organization’s mission statement, if applicable.
Related: Global employment guide for NGOs
Documentation, notification and transparency in NGO termination
Although all companies must comply with legal requirements for documentation and notification, NGO and nonprofit employee termination must also account for transparency.
Laws for documentation requirements vary by country, but in general, requirements could include:
- Documenting infractions and formal reprimands
- Recording any disciplinary actions taken in response to misconduct
- Attempting to create preventative measures for future incidents
- Outlining how and when employers may enact the termination processes
Not only should employers file all necessary documentation with a country’s governmental labor board, if applicable, but they should also store all termination documentation in the event of a future lawsuit.
If an employee accuses your NGO of wrongful termination—for any reason—you’ll benefit from thorough documentation whether you accept or deny the allegations.
If the law doesn’t stipulate how and when you should inform an employee of their termination, establish best practices in your organization’s standard operating procedures (SOP), including:
- Notifying the employee in writing
- Informing other employees, when relevant
- Alerting the employee’s and the terminator’s superiors
NGOs may also have to consider informing donors, governmental organizations or other nonprofits. For example:
- Your NGO should notify a (current or prospective) donor if an employee they’ve been working with closely has been terminated.
- Your NGO should inform a governmental organization according to the country’s termination regulations, if applicable. Or, if the employee worked closely with a government agent, management should alert that agent of the employee’s departure and any applicable next steps.
- If the employee was collaborating with another NGO to plan an event or share resources, your NGO should alert any relevant employees there and assign a replacement liaison.
Not only is financial transparency is important, you should also incorporate operational transparency policies to set donors’ and employees’ minds at ease—including being as open as possible about your nonprofit hiring practices, including termination policies.
Publishing your hiring and involuntary termination SOPs to your website could communicate to the public that your organization operates within the law and in accordance with the organization’s advertised mission—even with regard to HR matters.
Even if the employee’s home country doesn’t have specific transparency laws, remaining as publicly accountable as possible is always a show of good faith to donors and employees.
The termination process
If your nonprofit doesn’t have a termination SOP, create one and seek approval from applicable parties before you terminate the employee in question. Firing someone per the new SOP will give you an opportunity to test it out in real time and streamline the process for future terminations.
While the process will differ based on the employee’s home country, your organization’s SOP and the employee’s role or personal circumstances, best practices for a termination procedure generally include:
- Scheduling a private meeting with the employee
- Explaining in detail why the employee is being terminated
- Providing relevant paperwork and documentation—and collecting required signatures
- Making plans for the employee to pack up personal belongings
- Completing a checklist for returning keys, vehicles or other company property
- Escorting the former employee off the premises
Severance best practices for NGOs and nonprofits
In addition to maintaining legal termination practices, it’s important that they’re ethical as well. You can do this by creating a compliant and good-faith severance package. Severance packages serve a variety of purposes, including:
- Providing employees with a stopgap income source until they’re re-employed
- Paying out employees’ earned benefits, such as paid time off, sick leave, Health Savings Account balances and seniority bonuses
- Preventing animosity or resentment between NGOs and former employees
When you offer a severance package to a terminated employee, request their signature on a severance agreement form, provide them copies of everything they sign and keep copies of all receipts and signed documents for your organization’s records.
The impact of termination noncompliance on an NGO or nonprofit’s success
If your organization doesn’t comply with country-specific laws for hiring and termination, these transgressions could uniquely impact its reputation and credibility, success or access to future hires.
Reputation and credibility
Even though NGOs and nonprofits do not operate for profit, they must still make operational decisions that benefit their financial goals. Maintaining optics is uniquely important for NGOs because they rely—in many cases—upon donations to advance their cause. Instead of selling a product to consumers, they’re assuring a donor that their money is being used for a worthy cause.
Thus, NGOs and nonprofits should make every effort to operate above-board, including in their HR procedures. Any news of noncompliance could damage an organization’s reputation and credibility. Some examples include:
- If an NGO advancing illness research unlawfully terminated someone for exceeding their contractual paid time off, but the employee was absent from work to care for an ill loved one and they were protected by their country’s employment laws, publicity from this involuntary termination could undermine the organization’s mission.
- If an NGO lobbying to close the international gender pay gap fires an employee who is a gender minority without offering them a legally mandatory severance package, donors and prospective employees could second-guess the organization’s commitment to its values.
Public knowledge of noncompliant termination could impact a nonprofit’s ability to succeed in the following areas:
- Collaborating with government organizations and other NGOs
- Recruiting and retaining donors
- Reaching key performance indicators (KPIs) for new donor contacts, positive social media engagement, newsletter sign-ups, event attendance and funds raised
Lawful compliance and success go hand in hand for NGOs and nonprofits—if the public learns that an organization doesn’t internally embody its values, or it doesn’t treat employees legally or fairly during the hiring and firing processes, negative perception could damage the organization’s ability to succeed.
Access to top talent
Just like for-profit businesses, NGOs and nonprofits must invest in staffing. If prospective hires get wind of any noncompliant termination practices, they may be hesitant to accept a job offer or even apply for an NGO position.
In addition, nonprofits must maintain an upstanding image to retain existing employees. If an NGO unlawfully terminated an employee, other team members—perhaps inspired by a sense of justice—may seek positions elsewhere in solidarity with their former colleague.
Related: 5 hiring trends in NGOs and nonprofits
Compliant hiring and firing with a global employment partner
Nonprofits and NGOs face unique challenges in employee termination due to heightened optics concerns and ethical expectations, and the complexity increases for international organizations, which also must contend with often unfamiliar employment laws in all the countries where they employ workers.
Partnering with a global employment solutions provider like an employer of record can help ensure compliant global hiring for NGOs by offering local HR resources who know the ins and outs of employment and termination requirements in all the countries you need workers to advance your mission.
Learn more about how an employer of record removes the risk of employment noncompliance—so your NGO or nonprofit can focus on the important work of advancing the mission.