 When may a worker be fired?
Providing employment for the needy - and most would be needy if not for their jobs - is considered to be the highest form of "charity" as it enables one to have a sense of dignity and self worth. It should thus be no surprise that firing workers may only be done within carefully prescribed boundaries. Rav Moshe Feinstein takes it a given that no worker can be fired without cause and explanation. Even after the expiry of a contract one must rehire the original worker provided work is still available. Only a clear declaration by the employer that one is being hired for this specific job and time period would allow for dismissal at will. Thus most employees who in today's business environment are hired without contract and for an indefinite time period may not be fired without due cause. And the only truly justifiable cause for a firing - as opposed to layoffs due to economic necessity - is incompetence. A competent worker may not be fired even in order to hire someone who is more talented, rather this great worker would have to be an additional hire. An employee should not have to worry that their job in always in danger.
In reality, explains Rav Moshe, one may fire somebody not as a punishment for past incompetence but because such usually indicates future incompetence. However, if the employee can offer a good explanation as to why the future will be different, they should be given the benefit of the doubt. Of course the key and not to simple issue is how to define incompetence. At a bare minimum this means that employees must be told and warned about any potential deficiencies so that the necessary adjustments can be made.
Nonetheless workers in the public sector are held to an exacting standard due to potential harm arising through their mistakes. Thus the Talmud rules that a ritual slaughterer, a teacher, a doctor and a scribe are to be fired immediately without warning for their incompetence i.e. teaching improper material or missing an obvious diagnosis. The seriousness of their failures, causing irreparable to one's physical or spiritual well being are warning enough. Even in these cases a pattern of incompetence must be established. However, behaviour that an employer considers repugnant is not grounds for dismissal - only those who serve as religious leaders may be evaluated based upon their personal life.
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