What Is Termination of Employment?

Termination of Employment refers to the official conclusion of the contract of the employee with a certain company, and this terminates the working relationship. They could be due to the resignation, layoff, retirement, or dismissal of an employee. Some of the terminations are initiated by the employee themselves; others are directed by the organisation based on its business needs or decisions about the employee’s performance or violations of company policy.

Regardless of the nature of termination, it ensures that the employer and the employee go through the proper procedure and keep their best in transitioning.

Types of Employment Termination

Employment termination can be categorised into different types based on how and why it happens. Understanding these types helps both employees and employers navigate the process professionally and legally.

Voluntary Termination

Voluntary termination occurs when an employee decides to leave a company on their own accord. The reason for this could be personal growth, career advancement, or life changes.

Resignation

Resignation is the most common form of voluntary termination in which the employee gives notice to quit the job. Mainly, this is a professional method, which could be useful if a notice period is maintained, easing the transition for both parties.

Job Change

As a means of voluntary termination, employees leave their employer for a better job opportunity, higher salary, or better working conditions in another organisation.

Retirement

Once an employee reaches a certain age or completes company-specific service requirements, retirement marks the exit from professional life. As part of the exit process, retirement benefits are often offered to the employee.

Involuntary Termination

This form of termination is performed at the employer’s discretion. An involuntary termination might result from, among other things, financial reasons, unsatisfactory performance, or inappropriate behaviour.

Layoff

Layoffs are made in response to financial inability, government restructuring, or even economic downturns. Laid-off employees may receive severance pay and job opportunities if conditions for the company are favourable.

Dismissal for Cause

Such dismissals arise when an employee violates company policies, engages in misconduct, or breaches ethical guidelines. In its wake, this type of dismissal often happens instantaneously, which could later affect the prospect of getting future jobs.

Termination Due to Poor Performance

Employees whose performance has consistently fallen short of expectations may be terminated after the issue has been addressed with warnings or performance improvement plans. The employer typically documents performance-related issues before making this decision.

Mutual Termination

In mutual termination by mutual agreement, both employer and employee decide to terminate the employment relationship amicably. This often occurs when both parties perceive that the role or the conditions of work are no longer advantageous. Generally, mutual termination has some terms and conditions outlined that may include severance packages or transition support, with consideration from both sides.

Strategies to Reduce Employee Termination?

While termination is sometimes unavoidable, companies can take proactive measures to reduce employee turnover and create a stable workforce. Here are some key strategies to minimise employee termination rates.

Employee Engagement Initiatives

Employees who feel valued and attached to their jobs are unlikely to disengage or be terminated. Engagement programmes like awards schemes, the mentorship of employees, and team-building activities can raise employee morale.

Provide Regular Feedback and Training

Consistent feedback and training help employees do their jobs better and meet the organisation’s goals. Regular appraisal of employees and provision of professional training will help ensure that the employees stay competent and motivated.

Address Workplace Issues Proactively

When there is a positive work environment without conflict, a lesser number of employees will feel dissatisfied. Employers should be open to discussing workplace concerns, resolving conflicts, ensuring proper treatment, and creating an accommodating atmosphere

Offer Competitive Compensation and Benefits

Many employees leave their jobs over the salary or lack of benefits that they deem unfair. Competitive salaries, health benefits, and the opportunity to grow in one’s career will contribute toward job contentment and the reduction of voluntary turnover.

Create a Supportive Work Culture

An organisational culture characterised by responsive leadership, open communications, and mutual respect will hold employees to their jobs. Cooperation at work, celebrating wins, and maintaining a work-life balance will enhance retention and job satisfaction.

FAQs

1) What Is Termination of Employment?

Termination of employment means that the working relationship is ended between the employee and the establishment. This might occur because of resignation, the employee being laid off, being dismissed from work, or leaving by mutual agreement of both parties.

2) What are the different modes of termination of employment?

Employment can be terminated voluntarily by the employee, involuntarily by the employer, or mutually agreed upon by both parties.

3) How to reduce employee termination?

The methods used to reduce the termination of employees incorporate engaging them, availing them career growth opportunities, addressing workplace issues, ensuring salary competitiveness, and providing a conducive working environment.