Hi,
What are the basic halachot for firing an employee? Is severance ever required because of local custom? If a salesperson earns a commission but is fired or leaves before the customer pays, does the commission still belong to the salesperson? What about bonuses that are called discretionary but employees normally expect every year?
The basic rule is very simple.
If there is an employment contract, you follow the contract.
If there is no specific contract provision, but there is an established local law, industry practice, or normal business custom governing termination, severance, commissions, bonuses, or similar matters, then you follow that. In monetary matters, the normal practice of the place is generally understood to be part of the agreement between the parties, even when it was not spelled out expressly.
Therefore, if severance is normally required by law or established practice, it must be paid. If there is no such requirement, then there is no independent halachic rule requiring severance simply because an employee was fired.
The same applies to commissions. You determine when the commission is considered earned according to the agreement or the normal practice of that business. If a salesperson is entitled to the commission once the sale is made, firing him before the customer actually pays does not eliminate his commission. If the arrangement is that commissions are earned only when payment is received, then that is the rule.
Bonuses are treated the same way. If a bonus is truly discretionary, then it is discretionary. If, however, there is a consistent company practice that employees receive a particular bonus under particular circumstances, that practice can become part of the understood employment arrangement.
So there is no special universal halachah governing all of these situations. First look at the agreement. If the agreement does not answer the question, look at applicable law and established local or industry practice. If there is no agreement, law, or established practice creating an obligation, then the employer is generally free to decide how to proceed.
Thank you Rabbi for covering these questions.