Termination of employment or separation of employment is an employee's departure from a job and the end of their time with an employer. Termination may be voluntary on the employee's part (resignation), or it may be at the hands of the employer, often in the form of dismissal (firing or sacking) or a layoff. Dismissal or firing is usually thought to be the employee's fault, whereas a layoff is generally done for business reasons (for instance, a business slowdown or an economic downturn) outside the employee's performance.
Firing carries a stigma in many cultures and may hinder the jobseeker's chances of finding new employment, particularly if they have been terminated from a previous job. Jobseekers sometimes do not mention jobs from which they were fired on their resumes. Accordingly, unexplained gaps in employment, and refusal or failure to contact previous employers are often regarded as "red flags".
Dismissal
Dismissal is when the employer chooses to require the employee to leave, usually for the reason that is the employee's fault. The most common colloquial terms for dismissal in the United States are "getting fired" or "getting canned" whereas in the United Kingdom the terms "getting the sack" or "getting sacked" are also used.Macmillan Dictionary, Get/be given your cards, accessed 17 February 2021Ayto, J., and Simpson, J. (1992). The Oxford dictionary of modern slang. Oxford: Oxford University Press. ; p. 24.Leland, L.S., jr. (1980). A personal Kiwi-Yankee dictionary. Dunedin, NZ: John McIndoe Ltd. ; p. 16.
Layoff
A less severe form of involuntary termination is often referred to as a layoff (also redundancy or being made redundant in British English). A layoff is usually not strictly related to personal performance but instead due to economic cycles or the company's need to restructure itself, the firm itself going out of business, or a change in the function of the employer (for example, a certain type of product or service is no longer offered by the company, and therefore jobs related to that product or service are no longer needed). One type of layoff is the aggressive layoff; in such a situation, the employee is laid off but not replaced as the job is eliminated.
In an economy based on at-will employment, such as that of the United States, a large proportion of workers may be laid off at some time in their life, and often for reasons unrelated to performance or ethics. Employment termination can also result from a probational period, in which both the employee and the employer agree that the employer is allowed to lay off the employee if the probational period is not satisfied.
Often, layoffs occur as a result of "downsizing", "reduction in force" or "redundancy". These are not technically classified as firings; laid-off employees' positions are terminated and not refilled because either the company wishes to reduce its size or operations or lacks the economic stability to retain the position. In some cases, a laid-off employee may eventually be offered their old position again by their respective company, though by this time, they may have found a new job.
Some companies resort to attrition (voluntary redundancy) as a means to reduce their workforce. Under such a plan, no employees are forced to leave their jobs. However, those who do depart voluntarily are not replaced. Additionally, employees may resign in exchange for a fixed amount of money, frequently a few years of their salary. Such plans have been carried out by the United States Federal Government under President Bill Clinton during the 1990s, and by the Ford Motor Company in 2005.
However, "layoff" may be specifically addressed and defined differently in the contract articles in the case of unionised work.
Terminating Employees for Economic - Related Reasons Key policy issues associated with terminating employees for economic-related reasons across 190 countries from World Bank Doing Business DataWorld Bank (2017). Doing Business 2018: Reforming to Create Jobs. Washington, DC. in the 2013-2017 period. (Most countries allow the termination of workers for economic reasons, but out of 190 countries, only Bolivia, Venezuela, Tonga, and Oman do not.)
Procedural requirements ILO Termination of Employment Convention No. 158International Labour Organization (ILO), Convention Concerning Termination of Employment at the Initiative of the Employer, 22 June 1982, C158, available at: https://www.refworld.org/docid/5c6fc0e74.html requires if employers contemplate terminating a contract for economic reasons, they must promptly provide the employee representative with relevant information (termination reasons; number and types of employees may be affected; expected termination period)
In 93/186 countries (50%), employers must inform a third party before ending a contract with one worker. The third-party differs in each country, such as the Ministry of Labor and Social Affairs (Afghanistan; Bahrain); the Chief Labor Administrator (Bhutan); the Labor Inspectorate (Chile); the recognized trade union or if it does not exist, employers notify Chief Labor Officer (Guyana); a labor officer and union (Kenya); the union representative and the public regional representative for employment (Morocco).WorldBank (2018). Labor Regulations throughout the World: An Overview. https://documents1.worldbank.org/curated/en/221471546254761057/pdf/Labor-Regulations-Throughout-the-World.pdf
In 32/186 countries (17%), approval of termination from a third party is compulsory. For instance, approval from the Industrial Relations Dispute Settlement Board (Indonesia), the Conciliation and Arbitration Labor Board (Mexico), the Commissioner of Labor (Sri Lanka), and the Ministry of Labor (Suriname); only approval from the Works Council in case exceptional protected employee or Integration Office if disabled one or Labor Inspectorate if one on maternity/parental leave (Germany); the General Labor Inspectorate or, in adding the labor ministry in case of collective dismissals (Angola).
Reforms of notification and approval procedures happened in five countries to make them more rigid: +Third-party notification if one worker is dismissed?Third- party approval if one worker is dismissed?Third-party notification if nine workers are dismissed?Third- party approval if nine workers are dismissed?Third-party notification if one worker is dismissed?Third- party approval if one worker is dismissed?Third-party notification if nine workers are dismissed?Third- party approval if nine workers are dismissed?20172013AzerbaijanYes No Yes No No No No No BarbadosNo No Yes No No No No No KiribatiYes No Yes No Yes Yes Yes Yes MoroccoYes Yes Yes Yes No No Yes Yes SingaporeNo No Yes No No No No No Source:
Retraining and/or reassignment obligation The ILO Recommendation No. 166International Labour Organization (ILO), Recommendation Concerning Termination of Employment at the Initiative of the Employer, 22 June 1982, R166. https://www.refworld.org/docid/5c77a3c77.html emphasizes employers’ obligation to retrain or reassign their workforce before terminating a redundant worker, and this provision is specified in labor law of many high income countries like Finland, France, Germany, Greece, Italy, Portugal, and Sweden; in case law of Netherlands; under the Fair Work Act 2009 (Australia); not obligation but employers in the United Kingdom do have to consider suitable alternative employment; in many developing countries and emerging market economies (ex. Kazakhstan; Pakistan; Sierra Leone; Vietnam).
Priority rules According to ILO Recommendation No. 166, employers who select employees being terminated must comply with the criteria and order of priority specifically established in national laws or collective agreements.
For example, the groups are not layoff: “pregnant employees, female employees on maternity leave, male or female employees on maternity leave, single male or female employees taking care of their children under three years old or staff personally caring for relatives with severe disabilities; employees on leave, including annual leave, maternity leave, parental leave, sick leave, unpaid leave or other leave, or in other cases of absence for legitimate reasons. Elected union officials are also a traditionally protected group; their dismissal normally requires the consent of the higher union authority”.
in Botswana, Gambia, Kenya, Malta, Mexico, Nigeria, Panama, and Sierra Leone, employees with less seniority will be terminated first.
ILO Recommendation No. 166 2 prioritizes rehiring workers being terminated for economic reasons. In 2017, labour law imposed reemployment obligations in 69/186 countries (37), covering 31% of high-income and 63% of low-income countries. Priority provisions for rehiring dismissed employees are usually valid for 6 months (in Croatia, Gambia, the Netherlands, Serbia, Togo, and Turkey) to 12 months (in Cyprus with eight months; Djibouti, Lebanon, FYR Macedonia, and Peru within one year). Korea provides the lengthiest period of three years.
Reforms: between 2013 and 2017, 13 countries reformed rules of retraining, reassignment and priority. Most countries have liberalized some rules. Retraining or reassignment obligation before redundancyPriority rules for redundanciesPriority rules for reemploymentRetraining or reassignment obligation before redundancyPriority rules for redundanciesPriority rules for reemployment20172013The Bahamas No No Yes No No No Bahrain No Yes No No No No Cabo Verde No Yes No Yes Yes Yes Croatia No Yes Yes Yes Yes Yes Dominica No No Yes No Yes No Kazakhstan No No No Yes No No Mauritius No Yes No No No No Montenegro Yes No No Yes Yes Yes Pakistan No Yes Yes Yes Yes Yes Portugal Yes No No Yes Yes Yes RomaniaNo Yes Yes Yes Yes Yes Sri Lanka No No No No Yes No Trinidad and TobagoNo No No No Yes No Source:
Notice period Advance notice of future layoffs facilitates workers' job search. There are many existing versions of the regulation of notice periods worldwide.
In 2017, 73 countries had a conditional length of notice period; 89 countries had a fixed period without regard to job tenure; 25 countries did not have like in Denmark, Greece, New Zealand, Uruguay, Guinea-Bissau, El Salvador, Guatemala, Indonesia, Mexico, Peru, and Serbia).
The most generous notice period is in Sweden (33 weeks), the Gambia and Luxembourg (26 weeks) for an employee with at least ten years of tenure.
Some countries set minimum job tenure for an employee to receive the notice (e.g. in Greece and Lesotho: there is no notice for novices in their first 12-month trial period; In Ireland, two week notice period for employees working 104 weeks continuously.
Some countries differentiate the notice period based on professional criteria (ex. In Lao PDR 30 days for manual workers, 45 days for skilled workers; In Austria, two weeks for blue-collar workers, white-collar workers have different notice periods depending on their different tenure; the same in Madagascar, the notice period varies for laborers as it also depends on the length of employment and occupational group.
Some countries use social criteria to establish the advance notice period. For example, in Lithuania, two months is typical, but four months for an employee under 18 years old/ disabled/has full pension in less than five years/ raising children under 14 years old. In Croatia, the two-week notice is applied if the worker is over 50 years old, and one month for 55 years old.
As suggested by The ILO Termination of Employment Recommendation No. 166, an employee should be provided some days off to seek a new job during their notice period but still benefit from paid leave of absence. Poland is an example, and a worker has two or three days absent from work to find another job.
Unfair Termination of Employment
General overview