What Is Terminated From Employment?

Definition and Examples of Being Terminated From Employment

Terminated from employment

The Balance / Ashley Nicole DeLeon

Being terminated from employment means someone no longer works for an employer. The decision to terminate a worker's employment might be made by the worker, or it might be made by the employer.

Learn more about the decision to terminate employment, warning notices, reasons for dismissal, and your options in the event of an illegal termination.

What Is Terminated From Employment?

Someone who has been terminated from employment is no longer employed and their job is ended.

There are two types of job terminations:

  • Voluntary: A voluntary termination of employment is a decision made by the employee. Voluntary termination includes resignation or retirement.
  • Involuntary: Employment termination is involuntary when an employee is terminated by the employer.

Involuntary termination may be due to the employee's actions or behavior, in which case they are terminated for cause.

Some common reasons for dismissal include poor performance or incompetence, attendance problems, and insubordination or other behavioral problems. An employee also might be dismissed for misconduct, which includes ethical issues such as lying, falsifying information, stealing, or other unacceptable behavior.

However, involuntary termination might also happen if the company downsizes or lays off workers, conditions which are outside of the employee's control.

How Termination From Employment Works

Many employers have established procedures that managers must follow in order to terminate an employee. Typically, supervisors will be asked to document any problems, develop a performance plan to address issues, and formally warn employees prior to terminating them. Warnings often follow a continuum of severity beginning with a verbal warning, proceeding to a written warning, and eventually a final warning.

Warning letters reference specific problem behaviors, attitudes, ethical or legal transgressions, and performance issues. Goals for improvement are specified, and time frames for enactment of changes are established. Warning letters detail consequences, including termination, for failure to meet expectations.

At-Will Employment

In the U.S., most jobs are considered to be at-will employment, which allows employers the freedom to dismiss employees and employees the freedom to leave companies, each without providing notice (although it's often given as a courtesy). The exceptions are jobs that are covered under employment contracts and dismissals for illegal reasons.

Wrongful Termination

Illegal dismissal happens when an employer fires an employee in a way that breaks an employment contract or an employment law. Such termination is deemed wrongful, and includes the following reasons:

  • Racial or religious discrimination
  • Retaliation or payback
  • Refusing to commit an illegal act

A dismissal is also illegal if an employer does not follow the company’s own termination procedures.

If an employee believes they have been dismissed illegally, they can file a claim and take their case to court. If they win the case, they may receive monetary compensation for being wrongfully dismissed. In lieu of compensation, another remedy is to reinstate the former employee in the company.

In addition to any compensation won by the employee, the law can also justify charging the employer for punitive damages. In the United States, punishment can vary on account of the countless state and federal laws surrounding this topic. 

After Termination

Once an employee has been terminated, they may be able to collect certain kinds of payments:

  • Unemployment: Your ability to receive unemployment and other benefits after being dismissed may depend on the reasons provided for your dismissal, as well as your state. You may be unable to collect unemployment if you are fired.
  • Severance pay: Some companies may offer severance pay, particularly if the dismissal is due to company-related changes, such as restructuring or downsizing.
  • Dismissal compensation: Many companies outline dismissal compensation benefits in their employee handbook. Some offer weekly compensation for varying weeks with a cap or ceiling on the benefit. Others may offer a lump sum payment. However, there is no obligation for payment until you are covered by a contract or employment agreement that provides for it.
  • Health care: You may be eligible to continue group health benefits for a period of time after a job loss.

Key Takeaways

  • A termination from employment is the ending of an employee's job.
  • Termination of employment can be voluntary, in which it is the employee's decision, or involuntary, when it is the employer's decision.
  • If someone is wrongfully terminated from employment, they may be able to bring their case to court.