Involuntary termination is when a company needs to lay off an employee, for no fault of their own. In a survey answered by more than 10,000 employees, 18 percent have been fired from their job at least once. Understanding the difference between voluntarily leaving a job and involuntary termination can be confusing, but we are here to help clear up the confusion.
Voluntary vs Involuntary Termination
The differences between voluntary and involuntary termination can be confusing in the midst of getting fired or laid off. Voluntary termination is when a person leaves their job willingly and an involuntary termination is when a person is terminated from their job and has no say in the matter.
When an employee is voluntarily terminated, they choose to leave their job, start a new career elsewhere, voluntarily take up a layoff offer, or retire altogether. Oddly enough, being fired is usually also considered “voluntary termination”. This is because the employee made a choice or did something directly to lead them to be terminated from their job, like breaking a rule or underperforming. In other words, the termination has a reason, or is “justified.”
What Does Involuntary Termination Mean?
Involuntarily termination however is when an employee is being let go from their job because of a business decision that they cannot control.
Usually this is because their company is experiencing financial hardship, and needs to lay off some employees. The employees being laid off did not purposely do anything to become laid off and had no control over this situation.
Issues When Someone is Terminated Involuntarily
The involuntary termination meaning, defined by the IRS, is “a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services”. While it might be a long definition, it is a simple explanation.
Involuntary termination has its challenges, especially when there is confusion about whether or not the employee is being involuntarily terminated. Perhaps your company is relocating and you have some employees who are not on board with the relocation or are giving you a hard time about the move. You may have no choice but to fire the employee, especially if this dispute is affecting how they do their job.
If your employee is giving you a hard time about relocating due to moving expenses or global relocation and is planning on leaving their job, things can become very confusing. If your employee decides they no longer want to work for your company because they are not willing to relocate, this is considered voluntary termination because they chose to leave their job.
If your employee will not leave their job, but will also not relocate, you will have no choice but to lay off the employee. This is considered involuntary termination of employment because this is a company choice that the employee who is being involuntarily discharged has no say over. Your company will be moving and if they will not follow, they will need to be laid off.
This circumstance can cause legal issues, especially if the employee is trying to collect unemployment. Your employee can legally collect unemployment compensation if they have been laid off for no fault of their own, or if they had a very good reason to quit their job. The relocation of your company is a valid reason for your employee to collect unemployment compensation, as they cannot be forced to move with your company.
An employee is not qualified to receive unemployment compensation benefits if they are fired from their job for a just cause, or if they are refusing an offer for work that they are well suited for. Your employee can certainly apply for unemployment benefits, but it is ultimately up to the county’s unemployment office to make the final decision.
Benefits of Involuntary Termination
Involuntary termination usually comes with benefits for the employee, like a severance agreement and outplacement services. A severance agreement will explain the terms and conditions of your employee’s termination and will offer your employee a sum of money if they sign the agreement and agree they will not sue your company. Severance agreements help both the employee and company. They provide the employee with a large amount of money to help while they are without a job and ensure your company stays out of court, which is a win for both the employee and your company.
Outplacement services help your existing employee find a new job in a sufficient amount of time, by using job coaches, helpful techniques, and online tools to help them feel less stressed about being let go. This not only helps the existing employee but helps your company maintain a good reputation.
Final Takeaway
Understanding the differences between voluntary and involuntary termination is necessary when deciding to lay off employees before a company relocation. For help with managing employees during a business relocation, schedule a consultation with ARC Relocation today!