Termination of Employment

Andrew Willis

Andrew Willis


27 Jun 2019


Although a natural part of employment, terminating an employee is often awkward and contentious. That’s why it’s important to have your documentation up to date. You should also follow good business practices to avoid an employee pursuing a claim of unfair dismissal.

And, remember, if you need immediate assistance with this matter you can contact us for advice through our employment law services.


What is termination of employment?

It’s when an employee departs from their role and your organisation. It can be voluntary or at the hands of the employer.

There’s a variety of terminology people use to describe the end of employment—some of them mean different things.

For example, an employee can be ‘laid-off’, which means you no longer require their services—or there isn’t enough work to justify their role.

They can also be ‘fired’, which is a term you generally use to describe the termination of an employment contract as a result of gross misconduct or behavioural issue.

Ultimately, there are two different types of consideration:

  1. Voluntary: Retirement, resignation etc.
  2. Involuntary: Fired, made redundant etc.


Dismissal vs termination

This is another example of when terminology gets mixed up.

A dismissal is a type of termination, like being ‘laid off’, it’s an action that results in an employee’s position at a company ending.

A termination is any kind of ending to a contract of employment, voluntary or otherwise. In essence, a dismissal is always a termination. But it’s not the same the other way around.


Notice of termination of employment

When dismissing an employee, you must give them a minimum period of notice. You should outline their notice period in the employee’s contract.

You should also restate the length of the period in a notice of termination of employment letter. We’ll go into further detail on what you should include in this letter a little later.

In most cases, you should pay the employee their normal pay during their notice period. There are two types of notices you can give:

  1. Statutory.
  2. Contractual.

Statutory notice is the minimum notice you can give. This is one week’s notice if the employee has been with the company continuously for one month or more, but for less than two years, or, two weeks’ notice if the employment is two years or longer.

The notice period increases by one week for every additional year the individual is with your business, up to a maximum of 12 weeks.

For example, an employee with you for five years would have five weeks’ notice.

Contractual notice is the length of notice you specify within the individual’s employment contract.

If the statutory notice is longer than the notice set out in the employee’s contract, then you must give them statutory notice instead.

The only time you can terminate employment without giving notice is in cases of gross misconduct.


Termination of employment due to ill health

Although it’s not pleasant, sometimes when an employee’s health impacts their ability to work, you may have to consider dismissal.

There are laws regarding termination of employment for employees suffering with ill health.

Namely, you may only dismiss an employee fairly for one of five reasons. These are:

  1. Misconduct.
  2. Redundancy.
  3. Illegality.
  4. Capability.
  5. Other substantial reasons.

The key term to consider is ‘capability’. If the employee’s illness renders them incapable of performing their role, then it may be fair to dismiss them.

This is known as medical capability.

However, the dismissal should always be a last resort after exhausting other efforts. Remember to consider reasonable adjustments such as flexible working hours, remote working or issuing alternative responsibilities.

If it becomes clear the employee remains incapable, you should provide evidence of reasonable adjustments made as well as any other opportunities provided to improve said employee’s performance or to return them to work.

A long-term medical condition may qualify as a disability, which means if you dismiss an employee for this reason they may be able to claim unfair dismissal due to discrimination.

We strongly advise completing an occupational health report to back up any dismissal of this nature.

Here, you can find more information on whether you can fairly dismiss an employee due to ill health.


Termination of employment letter template

If you’ve come to the decision you want to let an employee go, you need to provide them with a written statement. Here’s a sample termination of employment letter in the UK.

Of course, if the dismissal is as a result of gross misconduct, or following a string of disciplinary actions, the wording of the previous letter is unlikely to fit your requirements.

So here’s a termination of employment letter you can use following a breach of contract or gross misconduct.


Expert support

If you need to remove an employee from your business but are unsure how to proceed, speak to a Croner expert today on 0808 145 3380.

About the Author

Andrew Willis

Andrew Willis is the senior manager of the Litigation and Employment Department and assumes additional responsibility for managing Croner’s office based telephone HR advisory teams, who specialise in employment law, HR and commercial legal advice for small & large organisations across the United Kingdom.





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