What Are the Key Causes of Employment Termination?

Voluntary, Involuntary and Mutually Agreed Are Employment Termination Options

Employment termination occurs for a number of different reasons.
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Are you interested in the ins and outs of employment termination? Employees land in hot water for many reasons, some inexplicable to employers—some predictable. Some are a result of employees' inappropriate expectations.

But, termination is a serious employment action that when initiated by the employer is generally the culmination of a series of progressive disciplinary actions. The employer has generally signaled loud and clear that the employee is in danger of employment termination.

Termination occurs when an employer or an employee ends an employee's employment with a particular employer. Termination can be voluntary or involuntary depending on the circumstances. When termination is initiated by the employer, it is usually involuntary although, under some circumstances, the employee and the employer may mutually agree to end their employment relationship.

What's Involved in a Voluntary Termination?

In a voluntary termination, an employee resigns from his or her job. Resignations occur for a variety of reasons that may include: a new job, a spouse or partner's acceptance of a new job in a distant location, returning to school, an opportunity to take on a managerial role, and retirement. 

Voluntary termination can also occur for less positive reasons. The employee doesn't get along with their boss. They see no opportunity to continue growth and progress in their current company. The job responsibilities in their current job changed and now, they are no longer doing something that they love every day. They have to work every day with a coworker who bullies them in subtle ways that are not outwardly noticeable. 

And, sometimes, it's the appeal of the shiny new job as in the grass is greener, or he or she just wants to do something new. It's hard to evaluate the motivations of employees who leave their jobs.

With valued employees, employers expend efforts on employee retention in their aim to limit preventable turnover. This is a significant objective of employers as the cost of employee turnover is expensive and ever-rising.

What Happens in an Involuntary Termination?

In an involuntary termination, an employer fires the employee or removes the employee from his or her job. Involuntary termination is usually the result of an employer's dissatisfaction with an employee's performance or an economic downturn. Involuntary termination can also occur in the form of a layoff if the business is unprofitable or overstaffed.

Reasons for involuntary termination of an employee range from poor performance to attendance problems to violent behavior. Occasionally, an employee is a poor fit for the job's responsibilities or fails to mesh with the company's culture

Involuntary termination, such as a layoff, can occur because an employer lacks the financial resources to continue an employment relationship. Other events that can trigger an involuntary termination may include mergers and acquisitions, a company relocation, and job redundancy.

With performance problems, the employer most often has tried a few final solutions such as coaching from the employee's supervisor to help the employee improve. Escalating progressive discipline in the case of performance issues such as absenteeism is also the norm. In a final effort to help an employee improve his or her performance, many employers rely on a Performance Improvement Plan (PIP).

Used appropriately, the PIP is the employer’s last-ditch attempt to communicate the needed performance improvements to the employee. But the PIP, and any escalating disciplinary measures, also provide documentation that demonstrates that the employer made an effort to salvage the employment relationship.

Additional Factors in Employment Termination

Several additional factors are relevant to involuntary employment termination.

Employment at Will

In states that recognize employment at will, an employee may be fired for any reason, at any time, with or without cause. Employers do not even have to give a reason for why the employee is terminated from his or her job.

To defend against potential charges of discrimination, however, employers are advised to keep documentation even if no case is presented at the termination meeting. Increasingly, employment law courts are finding results for the employee if no paper trail exists to support the employment termination.

Employment at will also means that the employee can terminate his or her employment at any time for any reason without cause.

Termination for Cause

In other instances of employment termination, the employment is terminated for a reason which is given to the employee and stated in the termination letter. Termination for a cause can occur in such situations as:

  • Violation of the company code of conduct or ethics policy,
  • Failure to follow company policy,
  • Violence or threatened violence,
  • Extreme insubordination to a manager or supervisor,
  • Harassment of other employees or customers, or
  • Watching pornography online.

Mutual Termination

Occasionally, an employer and employee recognize that they are not a good fit for whatever reason. They mutually agree to part ways in a manner that makes neither party culpable for the termination. This approach to termination is called agreeing on an exit strategy. No pain. The unwanted employee, the unwanted job: gone.