Termination of employment


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, or it may be at the hands of the employer, often in the form of dismissal or a layoff. Dismissal or firing is usually thought to be the employee's fault, whereas a layoff is generally done for business reasons 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.

Layoff

A less severe form of involuntary termination is often referred to as a layoff. 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. 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 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 Data in the 2013-2017 period.

Procedural requirements

ILO Termination of Employment Convention No. 158 requires if employers contemplate terminating a contract for economic reasons, they must promptly provide the employee representative with relevant information
In 93/186 countries, 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 ; the Chief Labor Administrator ; the Labor Inspectorate ; the recognized trade union or if it does not exist, employers notify Chief Labor Officer ; a labor officer and union ; the union representative and the public regional representative for employment.
In 32/186 countries, approval of termination from a third party is compulsory. For instance, approval from the Industrial Relations Dispute Settlement Board, the Conciliation and Arbitration Labor Board, the Commissioner of Labor, and the Ministry of Labor ; 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 ;  the General Labor Inspectorate or, in adding the labor ministry in case of collective dismissals.
Reforms of notification and approval procedures happened in five countries to make them more rigid:
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Retraining and/or reassignment obligation

The ILO Recommendation No. 166 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 ; not obligation but employers in the United Kingdom do have to consider suitable alternative employment; in many developing countries and emerging market economies.

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, covering 31% of high-income and 63% of low-income countries. Priority provisions for rehiring dismissed employees are usually valid for 6 months to 12 months. 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.
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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, the Gambia and Luxembourg 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

Unfair termination of employment refers to the dismissal of an employee without a valid legal reason, usually not applicable in cases of redundancy, incompetence, or misconduct. According to Michael Salamon, author of Industrial Relations: Theory and Practice, employers hold the legal authority to enforce workplace rules and expect employees to follow societal and job-related norms, avoiding from misconduct. However, some workplaces unjustly apply these rules, leading to excessive legal control over employees.

The Law of Unfair Termination

There is not a single worldwide legal framework that governs unfair termination across all countries. Employment laws, including those related to unfair termination, vary significantly from one country to another. Each country has its legal framework and regulations concerning employment relationships, which may include provisions about dismissal and termination.
For example, The Employment Rights Act 1996 is the United Kingdom employment legislation that governs the rights and responsibilities of employers and employees in the context of employment relationships within the UK. The ERA 1996 outlines various aspects of employment law, including unfair termination, redundancy, employment contracts, and minimum notice periods, among other matters. These regulations and protections apply to individuals working in the UK or to UK-based employers.
However, international labor standards and guidelines are set forth by organizations such as ILO, known as "ILO Convention No. 158 - Termination of Employment Convention, 1982." These international standards provide overarching principles and recommendations for labor rights and practices but do not constitute binding laws for individual countries.