Involuntary termination or a pink slip is the employee’s departure at the hands of the employer. There are two basic types of involuntary termination, known often as being “fired” and “laid off.” To be fired, as opposed to being laid off, is generally thought of to be the employee’s fault, and therefore is considered in most cases to be dishonorable and a sign of failure (compare dishonorable discharge). Often, it may hinder the new jobseeker’s chances of finding new employment, particularly if he/she has been fired from earlier jobs. Jobseekers sometimes do not mention jobs which they were fired from on their résumés; accordingly, unexplained gaps in employment, and refusal to contact previous employers are often regarded as “red flags”. Being successively fired from several jobs has the possibility of preventing jobseekers from obtaining gainful employment for a long time.
Dismissal is where the employer chooses to require the employee to leave, generally for a reason which is the fault of the employee. The most common colloquial term for dismissal in America is “getting fired” whereas in Britain the term “getting the sack” or “getting sacked” is also used.
A less severe form of involuntary termination is often referred to as a layoff (also redundancy or being made redundant in British English). A layoff is usually not strictly related to personal performance, but instead due to economic cycles or the company’s need to restructure itself, the firm itself going out of business or a change in the function of the employer (for example, a certain type of product or service is no longer offered by the company and therefore jobs related to that product or service are no longer needed). One type of layoff is the aggressive layoff; in such a situation, the employee is laid off, but not replaced as the job is eliminated.
In a postmodern risk economy, such as that of the United States, a large proportion of workers may be laid off at some time in their life, and often for reasons unrelated to performance or ethics. However, employment termination can also result from a probational period, in which both the employee and the employer reach an agreement that the employer is allowed to lay off the employee if the probational period is not satisfied.
Often, layoffs occur as a result of “downsizing”, “reduction in force” or “redundancy”. These are not technically classified as firings; laid-off employees’ positions are terminated and not refilled, because either the company wishes to reduce its size or operations or otherwise lacks the economic stability to retain the position. In some cases, a laid-off employee may eventually be offered their old position again by his/her respective company, though by this time he or she may have found a new job.
Some companies resort to attrition (voluntary redundancy in British English) as a means to reduce their workforce. Under such a plan, no employees are forced to leave their jobs. However, those who do depart voluntarily are not replaced. Additionally, employees are given the option to resign in exchange for a fixed amount of money, frequently a few years of their salary. Such plans have been carried out by the United States Federal Government under President Bill Clinton during the 1990s, and by the Ford Motor Company in 2005. However, “layoff” may be specifically addressed and defined differently in the articles of a contract in the case of unionised work.