Involuntary Termination
What is involuntary termination?
Involuntary termination, often known as being fired, refers to a situation where an employee’s employment is finalized by the organization and not by the employee’s own choice. This type of termination is often due to poor performance, reorganizations/layoffs, or other business or economic factors. It is distinct from voluntary termination, where the employee chooses to leave the organization on their own accord, such as through resignation or retirement.
Voluntary vs. involuntary termination
Voluntary termination and involuntary termination refer to two different ways in which an employee’s employment can end:
Definition
When an employee decides to leave their job on their own accord
When an employer decides to terminate an employee’s contract
Common reasons
Career change, personal reasons, relocation, retirement
Poor performance, misconduct, redundancy, business closure
Typically provided by the employee as per contract or agreement
May or may not be provided by the employer, depending on circumstances and contract
Severance pay
Usually not applicable unless specified in the employment contract
Often provided, especially in cases of redundancy or layoffs
Unemployment benefits
Generally not eligible, except under specific circumstances (e.g., constructive dismissal)
Often eligible, unless termination is due to misconduct
Documentation required
Resignation letter from the employee
Documentation supporting the reason for termination (performance reviews, disciplinary records, etc.)
In summary, the key difference between voluntary and involuntary termination lies in who initiates the separation. Voluntary termination is employee-initiated, often allowing for a more amicable and planned departure, while involuntary termination is employer-initiated, usually resulting from specific issues or organizational needs. Both types of termination require careful handling to maintain organizational stability and legal compliance.
Involuntary termination vs. layoff
The primary difference between involuntary termination and layoff lies in the underlying reasons for the termination. While all layoffs are considered involuntary terminations, not all such terminations are layoffs. Layoffs specifically occur due to external, often uncontrollable factors affecting the entire organization or specific departments, whereas other forms of involuntary termination are typically related to individual employee performance or behavior.
Ultimately, involuntary termination is a broad term that includes dismissals for various reasons outside of the employee’s control. Layoffs are a distinct category within this broad term, specifically driven by economic conditions, organizational changes, or technological advancements.
Involuntary termination example: Amazon
Amazon initiated a series of involuntary terminations within its devices, retail, and human resources divisions. These cuts affected approximately 10,000 employees. Additionally, the company announced that it intended to reduce its workforce by over 18,000 employees. To assist those impacted, Amazon offered severance packages that included separation payments, transitional health insurance benefits, and external job placement support.
Reasons for involuntary termination
There are several reasons why an organization may choose to terminate an employee. Some of those reasons may relate to the behavior or performance of the employee, while others may be based on the specific needs of the employer. Here are a few examples:
- Financial cuts: Companies may terminate employees due to economic downturns, financial struggles, or budget costs. These terminations typically do not reflect an individual’s performance.
- Reorganizations/downsizing: When an employer decides to restructure, downsize, or cut costs, it can result in the termination of employees whose positions are no longer needed. This is also not a reflection of the employee’s performance, and employers usually provide severance packages in these situations.
- Poor performance: Employees are expected to meet specific performance standards to achieve personal and company goals. When an employee consistently does not meet expectations in their role, despite coaching and attempts to improve, it can result in termination.
- Attendance issues: Consistent tardiness and absenteeism or failure to follow proper call-in procedures around absences can be grounds for termination. This behavior disrupts workplace operations and places a burden on other team members.
- Misconduct: This involves employees engaging in behavior that is against company policies or professional standards. Employee misconduct can range from minor issues like consistent tardiness to more serious issues like theft, harassment, or bullying. Depending on the gravity, it can lead to immediate termination.
How should HR handle an involuntary termination?
Handling an involuntary termination is a sensitive and critical task for any HR department. It’s important to approach this process with a high degree of professionalism, empathy, and adherence to legal and ethical standards. Here are some key steps and considerations for HR professionals in managing involuntary terminations:
- Review the company’s termination policy: The first step is to review the company’s termination policy thoroughly. This policy should outline the grounds for involuntary termination, the process to be followed, and any severance or benefits to be provided. This step often also involves revisiting the employee’s contract and any relevant documentation that outlines the terms of employment and termination conditions.
- Put together an involuntary termination checklist: Before proceeding with an involuntary termination, it is vital to prepare a comprehensive checklist. This checklist ensures that all legal, procedural, and interpersonal considerations are addressed systematically, minimizing the risk of overlooking key aspects of the process.
- Document performance and conduct issues: Before proceeding with an involuntary termination, it’s important to have a well-documented history of the employee’s performance and conduct issues. This documentation should include dates, specific incidents, any previous warnings given to the employee, as well as their responses to these warnings.
- Prepare for the termination meeting: The termination meeting is a critical step and should be handled with sensitivity and professionalism. It’s important to plan the logistics of the meeting, including the time, location, and who will be present, as well as preparing an involuntary termination letter. Typically, a representative from HR and the employee’s direct supervisor will attend.
- Communicate with the rest of the staff: After the termination, it’s important to communicate with the remaining staff while respecting the privacy of the terminated employee. The goal is to address any potential rumors and to reassure employees about their own job security, if necessary. It’s also important to strike a balance between transparency and discretion.
- Seek legal advice when necessary: Involuntary terminations can sometimes lead to legal complications, especially if the terminated employee believes the termination is unfair or unlawful. In such cases, HR should seek legal advice to ensure that all actions taken are legally defensible.
HR tip
Ideally, organizations want to avoid involuntary termination whenever possible. By providing employees with the right tools, including introducing regular performance meetings and providing needed feedback on a regular basis, you can often decrease the odds of involuntary termination and keep team members onboard.
FAQ
The three types of termination are:
• Voluntary termination: When an employee resigns or quits on their own accord.
• Involuntary termination: When an employer dismisses an employee due to performance issues, misconduct, or other reasons not related to the employee’s desire to leave.
• Mutual termination: When both the employer and the employee agree to end the employment relationship, often through a negotiated agreement that benefits both parties.
A no call no show is generally considered involuntary termination. Although the employee’s absence is voluntary, the termination itself is typically initiated by the employer due to the employee’s failure to report to work without notice.
Involuntarily terminated and laid off are not the same. Involuntary termination is a broad term that includes any scenario where an employer ends an employee’s job against their will, including for reasons like poor performance or misconduct. Being laid off, however, specifically refers to termination due to organizational reasons such as restructuring or downsizing and not because of the employee’s actions.
Voluntary termination occurs when an employee chooses to leave their job on their own accord, such as through resignation or retirement, while involuntary termination happens when the employer decides to end the employment relationship due to reasons like poor performance, misconduct, or organizational changes like layoffs or downsizing, which are beyond the employee’s control.
