The Termination Phase of the Employment Cycle

The Termination Phase

Termination is the ending of the employment of an employee.

Types of Termination

The types of Termination include:


Retirement is when an employee decides to give up full-time or part-time work and no longer to be part of the labour force.


Resignation is the voluntary ending of employment by the employee “quitting” their job. Notice needs to be given. The reasons for resignation may include change of lifestyle, start to a new business, boredom with present job and promotion from another organisation. 


Redundancy occurs when a person’s job no longer exists, usually due to technological changes, an organisation restructure or a merger or acquisition.

Redundancy can be voluntary or involuntary. Voluntary Redundancy occurs when an organisation wishes to reduce the size or nature of the workplace and decides how many employees should be let go. The employees are informed of the situation and given opportunity to nominate themselves. Meanwhile Involuntary Redundancy involves when an employee is asked to leave the organisation against their will. In this case the employee is not at fault and the decision is based in the ongoing needs of the organisation.


Retrenchment occurs when an organisation dismisses an employee because there is not enough work to justify paying them. This usually occurs on the basis of the financial needs of an organisation, in the event of downsizing or if the business is not doing well. When this occurs employees can be offered redundancy or severance pay, which will usually depend on how long the employee has been employed.


Dismissal refers to the behaviour of an employee that is unacceptable and the organisation terminates their employment.

There are two type of dismissal, these include:

  • Summary Dismissal, which is the most serious type in which no notice is required. Examples of actions leading to a Summary Dismissal can include drunk at work or engaging in criminal activity.
  • Dismissal on Notice, is when an employee is not performing at a satisfactory level and the notice required depends on the contract, age, length of employment of the employee.

 An Unfair Dismissal is when an employee is dismissed because the employer has discriminated against them in some way. Unfairly dismissed employees can lodge a claim with an industrial tribunal.

Managers need to be trained to handle dismissals in a way that takes account of the legal and financial implications, minimizes the trauma for both parties and does not have adverse effects on the morale of the remaining staff.

Example of discrimination under Commonwealth Workplace Relation Laws include:

  • Absence from work due to illness or injury.
  • Belonging or not belonging to a trade union
  • Race, colour, sex, sexual preferences, age, disability, martial status, family responsibilities, pregnancy, religion, political opinions or nationality.

See Also