The main difference between laid off and terminated is that laying off does not happen due to an employee’s fault, whereas termination can happen due to an employee’s fault.
Both laying off and termination refer to the end of employee-employer relationships. Laying off refers to a specific situation where the company decides to let go of employees due to reasons related to their business. Termination, on the other hand, is a much broader term and involves both laying off and firing.
Key Areas Covered
1. What Does Laid Off Mean
– Definition, Features
2. What Does Terminated Mean
– Definition, Features
3. Difference Between Laid Off and Terminated
– Comparison of Key Differences
Key Terms
Laid-off, Fired, Terminated
What Does Laid Off Mean
Being laid off means a company terminating the work contract of an employer due to reasons related to the company. A company may lay off one employee or a group of employees at the same time. However, the most important point to note here is that the layoff doesn’t happen because of a fault in the employee. Layoffs typically happen due to downsizing, issues with personnel management, restructuring, or even bankruptcy. A layoff can also be a temporary or permanent situation. Sometimes, companies may rehire employees when the economy and the performance of the company improves. However, when employees are laid off on a permanent basis, this is usually because of redundancy in positions.
Generally, laid-off employees are entitled to unemployment benefits. In some cases, they may also receive severance pay or other employee benefits offered by the company.
What Does Terminated Mean
Termination also refers to ending a work contract between an employee and an employer. However, termination is different from layoff. Termination is a much broader term and can involve both voluntary and involuntary terminations. Voluntary terminations happen when an employee makes the decision to end their journey with a specific company because they are going to retire, join another company or pursue another career path, or for other personal reasons. Involuntary termination, on the other hand, occurs when an employer terminates the work contract by firing or laying off an employee. Therefore, termination can include both firing employees and laying off employees.
There is a distinct difference between laying off and firing. Companies or employers typically fire employees due to factors like unsatisfactory performance, poor attitude or behavior that does not fit with the company’s culture, or unethical conduct violating company policies. Laying off, as we explained above, does not happen due to the fault of an employee. When firing an employee, the company does not usually offer severance pay or any other company benefits. These employees are also not eligible for unemployment benefits.
Difference Between Laid Off and Terminated
Definition
Being laid off means a company terminating the work contract of an employer due to reasons related to the company. Termination is a broad term that refers to the end of employee-employer relationships.
Fault
Laying off does not happen due to an employee’s fault, whereas termination can happen due to an employee’s fault (firing).
Cause
Layoffs can happen due to downsizing, issues with personnel management, relocation, restructuring, or even bankruptcy. Termination can happen due to the employee resigning from his/her position or the employer’s decision to lay off or fire the employee.
Pay
In laying off, employees usually get severance pay, but in termination, employees do not get severance pay.
Conclusion
Laying off refers to a specific situation where the company decides to let go of employees due to reasons related to their business. Termination, on the other hand, is a much broader term and involves both laying off and firing. The main difference between laid off and terminated is that laying off does not happen due to an employee’s fault, whereas termination can happen due to an employee’s fault.
Reference:
1. Kagan, Julia. “Termination of Employment.” Investopedia, 8 June 2021.
2. “Laid Off – Definition, Reasons, Alternatives to Layoffs.” Corporate Finance Institute, 7 May 2019.
Image Courtesy:
1. “Termination-cease-and-desist-letter-2473879” (CC0) via Pixabay
2. “Retrenchment” by Gan Khoon Lay from the Noun Project
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