What is Voluntary Termination?
Voluntary termination occurs when an individual decides to leave the organization where they are currently employed. They may be leaving the job market or may leave to start a new job or career at a different institution.
Voluntary termination can occur when an individual is fired from their position. We will discuss why that can occur later. Understanding it is important for HR professionals and employees when interpreting their employment rights and discussing with a new employer how they left their previous job.
- Voluntary termination occurs when an individual decides to leave the organization where they are currently employed.
- Crucial differences between voluntary and involuntary termination are critical to understanding what constitutes voluntary termination.
- Understanding voluntary termination is important for HR professionals and employees when interpreting their employment rights and discussing with any new employer why they left their last job.
Fired for Under Performance – Voluntary Termination
There is a common misconception where an individual who is fired is said to lose their job through involuntary termination. It is not the case, however, according to the way that the term is generally used.
When an individual is fired, in the case of underperformance, for example, the company did not hire that individual with the intention that they would underperform. The organization is terminating the individual’s employment because of actions and decisions the employee made.
Such voluntary decisions that led to underperformance result in the termination of employment by the organization.
Difference Between Voluntary and Involuntary Termination
|Voluntary Termination||Involuntary Termination|
|Being fired due to poor performance||Corporate layoffs due to financial difficulties and market conditions|
|Retirement||The employee is released due to a business or market condition beyond their control|
|Taking a job at a competitor’s company or a new field of employment||Sometimes comes with benefits like different types of agreements or packages|
|Quitting and going back to school|
Discussing Your Termination in Future Interviews
If terminated, either voluntarily or involuntarily, a future employer will likely have questions as to the circumstances surrounding the termination of your employment.
You, as an employee, must be able to understand the difference between voluntary and involuntary termination, so your new prospective employer fully understands the circumstances surrounding your departure from your previous place of employment.
For example, if one were to lose their job in an economic downturn due to layoffs, the employer would likely see that termination differently than if someone was terminated due to lack of effort or poor performance.
Discussing termination can be difficult during the interview process. However, it can better help your prospective employer in understanding the circumstances around leaving your last employer, especially if it was not a result of your direct actions.
Severance Packages – When to Expect Them
Severance packages are often not given to employees who are a part of the voluntary termination process since the employee is leaving because of an action they committed while employed or actions that resulted in accepting employment elsewhere.
When employers institute involuntary terminations, like through the course of a layoff, they will usually provide severance packages to displaced employees. The severance packages will include financial benefits to aid in the transition period to a new job or career.
CFI is the official provider of the global Certified Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful: