Termination of Employment

Learn everything about employment termination

What is a termination of employment?

The best-known and most common form of termination of employment is probably the notice of termination. There is the ordinary termination (with notice period) and the extraordinary termination (without notice, usually an involuntary termination). In addition, there is the behavioral termination (e.g. due to performance problems), the personal termination (e.g. due to health issues) and the operational termination. Finally, an employment relationship can also end through a termination agreement or a fixed term, or when a person reaches retirement age or even dies.

An employment relationship therefore ends:

  • With the expiration of time, if a specific time was agreed upon (fixed-term employment contract) or with the achievement of purpose, if it was concluded for a specific purpose
  • By termination agreement (voluntary)
  • By termination (involuntary termination)

Termination by employer or employee

Both employer and employee may terminate the employment relationship by certain types of notice:

Ordinary termination of employment

The employer and the employee are both entitled to give ordinary notice of termination. Once notice is given, there is usually a notice period that must be observed, and upon collection of the final paycheck, the employer and employee part amicably.

Termination without notice

In order to terminate an employment agreement, both the employer and the employee have the right to an extraordinary termination. Such a termination for cause is also referred to as termination without notice. It requires an important reason to be effective.

Termination of the employment by the employee

  • Personal reasons: These may include a career change, time off such as a sabbatical, or moving away due to a partner’s job change.
  • Professional reasons: A planned change of job can result in the termination of the work relationship. Those who decide to take such a step have usually planned their departure well in advance and in most cases already happen to have a new employment contract.
  • Operational reasons: The working atmosphere should not be underestimated. If an employee becomes a victim of bullying, sexual harassment or the like, it is not possible to work well in such a company on a long-term basis and the employment may be terminated. In case of a situation like this or if the conditions are unbearable, the employee can therefore change jobs and search for a new position.

Termination of the employment by the employer

  • Behavior-related reasons: If there is something wrong with the employee’s behavior, this may be followed by a termination for conduct-related reasons after a prior warning. For example, if the employee is guilty of refusing to work. Notorious unpunctuality, alcohol in the workplace or theft also lead to the employment being terminated prematurely.
  • Personal reasons: The reasons for termination by the employer are also based on the person of the employee, but in contrast to the previous example, they are not controllable. This is the case, for instance, with a long-term illness such as cancer. A situation like this is referred to as a dismissal for personal reasons. Under such circumstances, the employee may be eligible for health care coverage and a certain unemployment compensation or salary.
  • Operational reasons: If the business situation is demonstrably poor over a longer period of time and the employer has no possibility of continuing to employ his employee elsewhere, this results in termination for operational reasons. In this case, many companies refer their employees to the Department of Labor, which tries to help hose affected by providing them with information on their rights.

What if I have to write a letter of termination?

Above, we have already mentioned the basic aspects of the background and process of employment termination. If you are looking for further information, you can check our content on this topic and search for the right answers, regardless of whether a contract must be terminated for behavioral or performance-related reasons or even voluntarily. Check your rights as an employer and terminate a contract properly!

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