What Is Employee Separation? (With Types And Reasons)

Updated 8 August 2023

Employees often end their employment and separate from their employers for various reasons. This may happen at any stage in their career. Knowing more about employment separation and its types can help you if you are planning to separate from your current employer or are planning to let go of an employee. In this article, we define what employee separation is, discuss its types and explain some reasons for separation.

Related: What Is The Employee Life Cycle? (Advantages And Stages)

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What Is Employee Separation?

Employee separation refers to the end of a professional relationship of an employee with their employer. This typically happens when an employee's contract ends with the employer. Other reasons for separation may include voluntary resignation, termination or retirement.

Related: What Is Employee Relations In HR? (And Why Is It Important)

Types Of Employee Separation

Here are the different types of employment separation:


Many people see resigning from a job as a professional and courteous way to pursue employment separation. This can help employees maintain a professional relationship with their employer even when leaving the company. Different types of resignation include:

  • Forced resignation: There may be some challenging situations where an employer may ask an employee to resign or the company may require to let them go. This option gives employees the opportunity to leave their current role without the employer terminating them, which can work favourably for them when they wish to find a new job.

  • Voluntary resignation: A voluntary resignation happens when an employee chooses to leave a company for their own benefit. Employees typically provide a notice period before their last day of work, which helps the employer to find a replacement.

Related: Resignation Letter Due To A Career Change (With Samples)


Another type of employment separation is termination. There are several types of employment separation within this category. Here are some common types of termination for you to learn more:

  • Termination with prejudice: An employer may choose to terminate an employee with prejudice if they do not plan to hire the employee for the same job again in the future. While this may be challenging news to receive, it provides both the employee and the employer with clarity and an opportunity for a new start.

  • Termination without prejudice: If an employer terminates an employee without prejudice, it means that the company may rehire the employee in the future. This type of termination typically occurs when a company lets go of an employee for reasons other than their performance, and gives them the opportunity to apply for jobs with the company later in their career if they wish to do so.

  • Wrongful termination: Wrongful termination occurs when an employer dismisses an employee unlawfully. As there are laws that exist to protect employees, the employee may be able to receive compensation if they have a strong enough case, which can help them continue with their career.

  • Fired: An employee and an employer may not always suit each other. An employer may choose to fire an employee in these cases so both parties can pursue other opportunities that fit their interests and goals.

  • Layoff: When a layoff occurs, an employer may decide to let go of an employee due to changing business needs, such as an acquisition or restructuring of departments. Employees who get laid off often receive extended benefits and job search assistance to help them pursue a new career path they enjoy.

  • Constructive dismissal: There are some work environments that employees may find challenging, even after they have attempted to improve their situation multiple times. Here, the employee can choose to leave the company through a constructive dismissal, which may provide them with some of the same rights as a discharged employee if their case for leaving is strong enough.

  • End of temporary job or employment contract: If an employee is working with a company through a temporary job or a contract, the company may let them go when their agreement ends. Both parties are aware of the final date of employment in these situations, which often allows them to part on good terms and provides the potential to work together again in the future.

  • Voluntary termination: A voluntary termination occurs when an employee leaves a company at their own free will. For example, an employee may pursue voluntary termination when they accept a job offer with another company or when they decide to retire from their role.

  • Involuntary termination: An involuntary termination takes place when an employer chooses to let go of an employee. The reasons for an involuntary termination can vary, but typically the employee is still willing and able to work, which can make it easier for them to find employment elsewhere.

  • Termination by mutual agreement: A termination by mutual agreement occurs when both the employee and the employer agree to a separation. This type of arrangement can benefit both parties by giving the employer time to hire someone new and the employee an opportunity to plan for the next phase of their career.

  • Termination for a cause: If a company terminates an employee for a cause, it lets them go for a specific reason. While this news may be challenging to receive, an employee who understands why they were terminated may accept this as a learning experience and use the employer's feedback to improve themselves professionally.

Related: What Is Employee Retention? (And How To Increase It)


Many employees choose to work with an organisation throughout their career. They may decide to separate from their employer at their age of retirement or take an early voluntary retirement. Here are the different types of retirements:

  • Mandatory retirement: An employer may implement a mandatory retirement to encourage an experienced employee to retire for a variety of reasons. This can provide employees with the opportunity to pursue other interests outside of work and allow the company to train someone new to fill their role.

  • Voluntary retirement: For many professionals, the end goal in their career is to retire. When they reach this milestone, they may go through the process of resigning from the company voluntarily.

  • Phased retirement: Companies may implement a phased retirement plan for experienced employees. This can help both parties adjust by slowly reducing the employee's work hours prior to their official retirement date.

Related: Retirement Wishes For Your Colleague (With Tips And Samples)

Reasons Of Employment Separation

There can be various reasons for employment separation, including:

  • New job opportunity: Many employees decide to change companies at different stages in their careers. They may decide to separate from their current employer to work with a different employer to fulfil their career goals.

  • Employee performance: Employers may sometimes decide to terminate an employee's contract if they do not meet the company's expectation. The company may determine that the employee may perform better in a different role at a different organisation.

  • Retirement: Experienced employees may choose to retire so they can spend more time pursuing their interests outside of work. Retirement is often mutually beneficial for the employee and the employer, who may wish to acquire new talent to fill the open position.

  • Relocation: An employee may choose to move for a variety of reasons, such as to be closer to family or to support a change in their spouse's career. In these cases, leaving their current job may give them the opportunity to relocate.

  • Change in family dynamic: Employees may choose to leave a company based on changes within their family dynamic, such as having a child or becoming the primary caregiver for a loved one. This type of employment separation may be temporary or permanent.

  • Finances: An employer may choose to lay off employees to save money so they can sustain their company long term. An employee may also seek employment separation for financial reasons if another company offers them a position with a better salary or benefits.

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