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Termination of Employment: What does it mean?

Employment termination refers to the cessation of the employment relationship between an employer and an employee. This can occur for various reasons, including resignation, termination, retirement, mutual agreement or contract expiration. While it can be a challenging experience, it is important to approach the process with understanding, compassion, and a focus on moving forward.

Different Types of Employment Termination
Resignation

A resignation occurs when an employee voluntarily leaves their position, signalling their intention to end their employment with the company. The employee typically makes this decision for personal, professional or other reasons, and it marks a formal departure from their role within the organization.

Termination

Termination happens when an employer ends the employment relationship, often due to poor performance, misconduct, or financial constraints. The employer makes this decision, resulting in the employee's departure from the company, typically following established protocols and procedures.

Retirement

Retirement occurs when an employee reaches the end of their career and exits the workforce, typically after fulfilling the years of service or reaching the age-eligible for retirement benefits. This transition marks the conclusion of their professional journey and often involves receiving retirement benefits or pension payments.

Mutual Agreement

A mutual agreement happens when the employer and employee agree to end the employment relationship. This decision is typically reached through discussion and negotiation, and both parties agree on the terms and conditions of the departure.

Contract expiration

Contract expiration occurs when an employment contract reaches its designated end date without being renewed or extended. This naturally concludes the employment relationship stipulated in the contract, and the employee's tenure with the company ends per the agreed terms.

Key Considerations for Employers
Legal Compliance

Legal compliance ensures all termination procedures adhere to relevant employment laws and regulations. This means following legal requirements regarding notice periods, severance pay, documentation and any other applicable rules to ensure that the termination process is handled lawfully and fairly.

Clear Communication

Clear communication entails explaining the reasons for termination to the employee straightforwardly and respectfully. This ensures that the employee understands the rationale behind the decision and is treated with dignity throughout the process.

Documentation

Documentation involves keeping comprehensive records of the termination process, including performance reviews, disciplinary actions, and termination letters. This ensures a clear and accurate account of the steps taken and the reasons for termination, which can be important for legal and administrative purposes.

Support

Support involves providing departing employees with resources such as career counselling or outplacement assistance. This helps ease their transition by offering guidance on finding new job opportunities and managing the change in their professional lives.

Transition Planning

Transition planning involves creating a strategy to smoothly hand over the employee's responsibilities to other team members. This includes outlining tasks, timelines, and any necessary training to ensure that the transition is efficient and that the team can function effectively without disruption.

Key Considerations for Employees
Understand Your Rights

Understanding your rights involves familiarizing yourself with your entitlements and protections under relevant employment laws. This knowledge ensures that you know your legal benefits and can advocate for yourself appropriately in various employment situations.

Review Your Severance Package

Reviewing your severance package involves carefully examining the offer's details, including financial compensation, benefits, and other terms. If necessary, you may negotiate the terms to ensure they meet your needs and align with your expectations.

Update Your Resume

Updating your resume involves revising and refining it to reflect your most recent skills, experiences and achievements. Starting to network can help you connect with potential employers and explore new opportunities, making it easier to transition into your next role.

Transition Planning

Transition planning involves creating a structured plan to transfer the employee's responsibilities to other team members. This includes identifying key tasks, setting timelines, providing necessary training and ensuring a seamless handover to maintain productivity and continuity within the team.

Best Practices for Employers During Termination
Conduct a Fair and Impartial Investigation

Conducting a fair and impartial investigation involves thoroughly and objectively examining all relevant facts and evidence if termination is due to misconduct. This ensures that the decision is based on accurate information and that the process is transparent and just.

Providing Clear and Concise Documentation

Providing clear and concise documentation means recording all performance issues, disciplinary actions, and termination decisions in a detailed and organized manner. This ensures a complete and accurate record of the situation, which can be important for legal and administrative purposes.

Communicate the decision in a private and respectful manner

Communicate the decision privately and respectfully by delivering the news in a confidential setting. This allows the employee to process the information and ask questions, ensuring the conversation is conducted with dignity and sensitivity.

Offer Support and Resources

Offer support and resources by providing detailed information about severance pay, benefits continuation and outplacement services. This helps the employee navigate their transition more smoothly and ensures they can access the necessary support during their career change.

Maintain confidentiality

Maintain confidentiality by respecting the employee's privacy and keeping the details of the termination process strictly confidential. This ensures that the employee's personal and professional information remains protected and is not disclosed inappropriately.


While often challenging, employment termination can be navigated smoothly with the right approach. Prioritizing empathy, communication, and support for both employers and employees can ensure a respectful and positive transition.

Disclaimer: This article and all information in it is provided for general informational purposes only. It does not, and is not intended to, constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.

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