Employment Termination Worldwide

Termination of employment occurs when an employee's contract of employment ends with an employer. This can happen due to resignation, dismissal or redundancy. Employment at-will, common in USA, authorizes both employe

What is employment termination?

Termination of employment occurs when an employee's contract of employment ends with an employer. This can happen due to resignation, dismissal or redundancy. Employment at-will, common in USA, authorizes both employers and employees to sever an employment relationship at any time. An employer can terminate an at-will employee for any reason-however ridiculous or irrational it may seem-or no reason at all. At-will employees are usually employees without contracts. Laws, however, create certain exceptions (protected categories like age, disability, race, etc.) to the at-will principle. Employment contracts usually require "just cause" for employment termination.

What are ILO provisions on employment termination?

According to ILO convention 158, justification of employment termination must be linked to

  1. Capacity (of a worker)
  2. Employee conduct
  3. Operational requirements of an enterprise

What leads to unfair dismissal?

According to ILO Convention and Recommendation on the subject, employment of a worker is unfairly terminated if a worker is dismissed on the following grounds.

  1. Union membership or participation in union activities outside working hours or, with the consent of the employer, within working hours;
  2. Seeking office as, or acting or having acted in the capacity of, a workers' representative;
  3. Filing of a complaint or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;
  4. Race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
  5. Absence from work during maternity leave;
  6. Age, subject to national law and practice regarding retirement;
  7. Absence from work due to compulsory military service or other civic obligations, in accordance with national law and practice

What procedure should be employed prior to termination of employment?

When an employee is terminated for reasons related to his conduct or performance, he has to be given an opportunity to be heard before dismissal. Similarly, a worker should also be given warning for misconduct and if that action is repeated, a worker can be fired. A worker who is unfairly dismissed shall be entitled to appeal against termination to an impartial body like labor court or labor tribunal. A worker is expected to appeal against the management' dismissal decision within a reasonable period of time otherwise he is deemed to have waived his right. If labour court/tribunal or any such impartial authority finds termination to be unjustified, it can order reinstatement of a dismissed worker or due compensation.

Does ILO Convention require notice before employment termination?

A worker whose employment is to be terminated is entitled to a reasonable period of notice or compensation in lieu thereof. This requirement can be exempted only if that worker is guilty of serious misconduct of such type that it would be unreasonable for employer to continue his employment during the notice period. Length of notice usually depends on length of service of an employee, age and occupational classification of a worker.  ILO Recommendation requires that workers be allowed time off during the notice period in order to allow them to search for employment. Moreover, upon termination, a worker must also be provided with experience/employment certificate indicating (start and end) dates of employment, job title and responsibilities.


What about severance pay/allowance?

Severance Pay is the amount paid by the employer for terminating employment relationship, regardless of the reason for termination. In the case of employment termination, a worker is entitled to severance allowance or other separation benefits. The amount of these benefits may depend on the length of service and wage level of an employee. This allowance can be paid directly by employer or through a fund constituted by employers' contributions.

What are the relevant provisions in case of redundancy, i.e., employment termination due to economic, technological, structural or other similar reasons?

It is required that when an employer contemplates employment termination on any of the above mentioned reasons, an opportunity for consultation is provided with workers' representatives as soon as possible. Similarly, convention also requires notification to the competent authorities if a large number of workers are being laid-off.