Employee Termination: Understanding the Process and Different Types
Employee termination is a significant and sometimes sensitive aspect of the employer-employee relationship. It refers to the formal end of an individual’s employment within an organization, whether initiated by the employer or the employee. Termination can occur for various reasons, ranging from poor performance and misconduct to changes in business needs or individual life circumstances. This article provides an in-depth look into employee termination, outlining its different types and the key considerations involved in each.
Understanding Employee Termination
Employee termination marks the conclusion of the employment relationship between an organization and its workforce. It is a multifaceted process that requires careful planning, adherence to legal regulations, and ethical considerations to ensure fairness and respect for all parties involved.
Types of Employee Termination
1. Voluntary Resignation
Voluntary resignation occurs when an employee chooses to leave the organization of their own accord. This decision could be influenced by personal reasons, career advancement opportunities, or changes in life circumstances. Employees who resign voluntarily typically provide notice to their employers, allowing the organization time to transition responsibilities and find a replacement.
2. Involuntary Termination (Dismissal)
Involuntary termination refers to situations where the employer initiates the termination due to various reasons. There are several types of involuntary termination:
Termination for Cause: This involves terminating an employee due to serious misconduct, poor performance, or violation of company policies. The decision is often supported by documented evidence of the employee’s actions.
Layoff: A layoff occurs when employees are let go due to organizational restructuring, financial challenges, or changes in business needs that result in the elimination of certain positions. Layoffs are not related to individual employee performance.
Redundancy: Redundancy happens when an employee’s role becomes unnecessary due to changes in technology, processes, or business requirements. It is not a reflection of the employee’s performance but rather a shift in the organization’s needs.
Retrenchment: Similar to redundancy, retrenchment involves the termination of employees due to financial constraints, such as economic downturns, that require cost-cutting measures.
3. Retirement
Retirement occurs when an employee reaches the designated retirement age or voluntarily chooses to end their career. Employers often provide retirement benefits, and this type of termination is usually a planned transition.
4. Probation Termination
Employees on probation who do not meet the organization’s performance or suitability criteria may be terminated at the end of their probationary period. Employers must follow the termination process for probationary employees, similar to normal employees. If a probationary employee displays poor performance, the employer must conduct a formal appraisal, providing written feedback signed by the probationary employee. The probationer should be given ample opportunity to enhance their performance, such as extending their probation period.
5. End of Contract
Employees on fixed-term contracts experience termination when their contract expires. This is common in project-based roles where the contract’s end aligns with the completion of a project.
6. Constructive Dismissal
Constructive dismissal occurs when an employee resigns due to their employer’s conduct. The employer’s behavior is typically so harmful or adverse that it makes the employee’s working environment intolerable, effectively forcing them to resign. This may include unilateral changes to the terms of employment (such as pay or job duties), allowing harassment in the workplace, or any pattern of behavior that fundamentally breaches the employment contract.
Unlike straightforward dismissal, where the employer actively terminates the employment, constructive dismissal is a resignation that is effectively, and legally considered, a termination by the employer due to the working conditions being made unbearable for the employee. To claim constructive dismissal, an employee must generally prove that:
- Their employer committed a serious breach of contract.
- They did not accept the breach or behavior (not formally or through their actions).
- They felt forced to resign because of that breach.
- They resigned soon after the incident(s) that made them feel they had to leave.
Constructive dismissal can be a complex area of employment law, and it often requires legal adjudication to resolve disputes. An employee claiming constructive dismissal may seek legal advice to ensure that there is a valid claim before resigning, as it can be difficult to prove in court or at an employment tribunal.
7. Medical Grounds
Employees whose medical conditions prevent them from performing their job responsibilities, and for whom reasonable accommodations cannot be made, might face termination due to medical reasons.
To ensure that a dismissal due to medical reasons is deemed just and fair, employers should adhere to a thorough process. This includes evaluating several critical factors before proceeding with such a termination: (i) the type of illness; (ii) the anticipated duration of the leave and the possibility of it happening again; (iii) the employer’s requirement to find a replacement or to manage the tasks the employee was responsible for; (iv) the specifics of the employee’s role; and (v) the effect of the employee’s nonattendance on the overall operations of the business.
8. Expiration of Visa or Work Permit
For international employees, termination can occur when their visa or work permit expires, rendering them ineligible to work in the country.
Employee termination is a complex process with various dimensions, each requiring careful consideration of legal, ethical, and organizational factors. Different types of termination serve different purposes and involve unique considerations. As organizations navigate the delicate terrain of employee termination, it is essential to prioritize fairness, respect, and clear communication, ensuring that the process is carried out in accordance with the law and best practices. By understanding the various types of employee termination, organizations can effectively manage workforce transitions while maintaining their commitment to professionalism and integrity.
FAQ
Can an employer require an employee who tenders notice of resignation to leave the company immediately?
Yes, however the employer must pay the employee wages in lieu of the balance of the notice period.
My termination notice is 3 months and I have 2 weeks of annual leave left. Can the Company force me to leave immediately (within a week) and force me to compensate (pay the Company 2.5 months’ salary) them for leaving early?
Your notice of termination would be 3 months or payment of 3 months wages in lieu of termination notice. If the Company wishes you to leave immediately, then the Company needs to pay you the payment in lieu of notice. You do not have to pay the Company any payment in lieu of notice, as you do not leave early, instead it was the Company that want you to leave early and as such the Company has to pay you in lieu of the remaining notice period.
Can a company use the services of outsiders to conduct domestic inquiry?
Domestic inquiry is an internal matter and should as far as possible be handled by employees of the Company. However, if all the employees of the company have prior knowledge of the case, company may use the services of the company’s Board of Directors and outsiders to hold a domestic inquiry.
Is an employee entitled to payment in lieu of annual leave not taken at the time of termination of service?
The employee who resigns from service or whose service is terminated otherwise than for misconduct is entitled to paid annual leave in direct proportion to the completed months of service during the year in which termination takes place and the employer shall pay the annual leave wages in respect of the balance of annual leave.
How long is the notice period required for either party to terminate the contract of service?
General guidelines for disciplinary action are as follows:
- The notice period must be equally the same and it must be clearly stipulated in the contract. If not define in the contract, the minimum period for a notice of termination to be effected are as follows;
- If not define in the contract, the minimum period for a notice of termination to be effected are as follows
Less Than 2 years’ service – 4 weeks
More Than 2 years’ but less than 5 years – 6 weeks
More than 5 years – 8 weeks
Can a termination be effected without notice by either the employer or employee?
Can a termination be effected without notice by either the employer or employee? In the event of willful breach of contract on either party, the other party may terminate the contract without notice.
What is the recourse or action for an employer, in the event he finds his employee commits misconduct that goes against the conditions of contract?
After due investigation and after finding the act/s tantamount to misconduct that goes against the conditions of contract, either express or implied terms, the employer may:
- Dismiss the employee without notice
- Demotes the employee
- Demotes the employee
- Any other lighter punishment
For the purpose of investigation, an employer may suspense his employee for the maximum period of 2 weeks. Full wages shall be reimbursed to the employee once he is exonerated.
