The word termination is generally taken with a negative connotation to it in the professional world.
However, being terminated from a job doesn’t necessarily mean that you were fired or kicked out of your job.
Oftentimes, being terminated from a job could be due to reasons that aren’t under your control or it is simply because the term of the contract with the company you’re working for ended.
So do termination and resignation mean the same thing?
Not necessarily. The primary difference between being terminated or resigning is based on which party initiates the separation.
While termination comes from the employer’s end, the resignation comes from the employee.
Read on to get clarity on terminated meaning and also on the following related FAQs:
- What does terminated mean in a job?
- What does voluntary termination mean?
- What is involuntary termination?
- Who is entitled to termination compensation?
Terminated Meaning
Termination of employment refers to the end of a work contract or term between an employee and a company.
And while some use the word termination synonymous with being fired, that is not always the case.
An employee can be terminated from a job for multiple reasons like wrongful termination, furlough, redundancies, job performance, downsizing, etc.
And depending on the location and its prevalent state employment laws, terminated employees are entitled to a final paycheck within 24 to 72 hours post-termination.
Additionally, based on the terms of employment, terminated employees can also be entitled to severance pay according to the Fair Labor Standards Act (FLSA).
Also Read: What should you do next if you were laid off from your job?
Voluntary Termination Meaning
Voluntary termination can be defined as resignation or when an employee willingly terminates their employment with an employer for various reasons.
Apart from getting better opportunities, an employee can choose voluntary termination when he/she isn’t left with any other choice.
For instance, when the work environment is toxic, or the employee faces harassment or difficult working hours with less pay, the employee is left with no other choice than to hand in their resignation.
Such scenarios are also known as constructive dismissal.
Also, if a staff member is handing in a voluntary resignation, they must provide advance notice to their employers verbally and in writing.
Depending on the terms of employment, the notice period can vary anywhere from 2 weeks to 3 months.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) also qualifies employees for health insurance coverage under an employee’s current group health plan for around 18 months post-resignation.
Also Read: How to explain your reasons for leaving a job during an interview?
Involuntary Termination Meaning and Types
Involuntary termination occurs when a worker is let go from the job at the hands of the employer due to poor performance or other reasons that might or might not be due to the fault of the worker.
Unlike voluntary termination, involuntary termination can be classified into various types, depending on the reason for termination.
Given below is a breakdown of the different types of involuntary termination:
Layoffs and/or Downsizing
Unlike workers who are fired, layoffs happen through no fault of the employee.
Corporations may lay off employees or downsize their workforce to cut down on budget, reduce operating costs, and even restructure their business.
Other reasons for layoffs or downsizing can include the following reasons:
- Automation of the responsibilities of a role
- Relocation
- Mergers & acquisitions
- Buyouts
- Business closing
- Decreased operations
- Outsourcing options
Getting Fired
A worker is usually fired from a job for the following reasons:
- Inadequate work performance
- Bad behavior or a negative attitude
- Not a cultural match for the organization
- Unethical conduct and dishonesty
- Breaches company policies and terms of employment
And depending on the at-will employment laws that are prevalent in the state, an employer can dismiss or terminate a worker without prior warning in case their work performance is not up to the mark or if they violate company policies.
Plus, it is not even mandatory for employers to even provide a reason for firing a working staff member.
Illegal Dismissals
Although the at-will employment laws give a lot of leverage to employers, they cannot fire employees for the following reasons:
- For declining to work more than the specified hours according to the contract
- Taking a leave of absence
- Telling on a colleague or reporting an incident to the higher authorities or HR
- Whistleblows
In case an employee fires a worker under these scenarios, the employer can face legal action in court and can be liable for wrongful or illegal termination.
Apart from this, other illegal terminations can occur when the company cites discriminatory reasons based on caste, religion, sex, age, nationality, race, and sexual preference for their dismissal.
If found guilty, the employers are entitled to pay compensation to the wronged worker and reinstate them into the organization.
Termination for Cause
Some companies include a termination-for-cause clause in their terms of employment or contract, which entitles the employee to an improvement schedule of 60 or 90 days within which period they must improve their work performance and prove their worth before the company can fire them.
In case the worker fails to show substantial improvement in their work ethic before the end of this probation period, employers can then dismiss the employee.
Also read: How to explain layoffs and career gaps during interviews in 2022
Termination Compensation
Although the Fair Labor Standards Act (FLSA) doesn’t require employers to offer severance or termination pay to employees who are involuntarily terminated, a few employers do provide the same.
However, employee termination laws can be different for different states and can not only mandate employers to pay a final paycheck immediately but also include unused and accrued vacation days pay to employees who are terminated involuntarily.
Additionally, if the worker is terminated from the job without a fault of their own, they can be eligible for unemployment benefits and financial assistance till they find a job.
Key Takeaways
- Being terminated from a job doesn’t necessarily mean that you were fired or kicked out of your job. It could be due to reasons that aren’t under your control like budget costs, mergers, etc.
- An employee can be terminated from a job for multiple reasons like wrongful termination, furlough, redundancies, job performance, downsizing, etc.
- Voluntary termination can be defined as resignation or when an employee willingly terminates their employment with an employer for various reasons.
- The Consolidated Omnibus Budget Reconciliation Act (COBRA) also qualifies employees for health insurance coverage under an employee’s current group health plan for around 18 months post-resignation.
- Involuntary termination occurs when a worker is let go from the job at the hands of the employer due to performance or other reasons that might or might not be due to the fault of the worker.
- Depending on the at-will employment laws that are prevalent in the state, an employer can dismiss or terminate a worker without prior warning in case their work performance is not up to the mark or if they violate company policies.
- Illegal terminations can occur when the company cites discriminatory reasons based on caste, religion, sex, age, nationality, race, and sexual preference for their dismissal.
- If the worker is terminated from the job without a fault of their own, they can be eligible for unemployment benefits and financial assistance till they find their next job.
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