Types of Separation from Employment

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There are many ways to lose a job. Employment separation occurs when an employment contract or at-will agreement between an employee and their employer ends.

Some terminations will be forced by an employer, including getting fired, laid off, or furloughed. Other separations, like retirement or resignation, will be voluntary. 

Knowing which type of separation from employment you’ve experienced is important. It may determine whether you receive unemployment benefits and severance pay. It’s also essential to know the particulars so that you can prepare to interview for new jobs.

Key Takeaways

  • Separation from employment occurs when a worker ceases to have a professional relationship with an organization. 
  • Examples of employment separation include firing, layoff, furlough, resignation, and retirement. 
  • Depending on the circumstances of your separation, you may be able to collect unemployment benefits and severance pay.

Types of Termination and Other Employment Separations

Constructive Discharge

Constructive discharge, also known as constructive termination or constructive dismissal, occurs when an employee quits under duress and believes that they have no choice but to leave their employer.

Often, they feel that they have been forced to leave by an employer who has intentionally made their working conditions intolerable. If employees who are separated in this manner can prove their case, they may retain some of the same rights as discharged workers.

Although it appears as if the employee left voluntarily, he or she had no other option but to leave due to the very difficult working conditions.


If the employer’s actions are illegal or unlawful, the employee may have a viable claim for wrongful dismissal.


A firing takes place when an employer severs ties with a worker due to poor performance or violations of company policy. Depending on the nature of employment, an employer may work with the employee to resolve the problematic situation or provide a probation plan as a warning.


In the case of at-will employment, an employee can be fired without a reason or warning.


Being laid off refers to a separation in which the employer has let an employee go because their services are no longer needed. Layoffs occur when employers experience a reduced volume of business or funding, or when a reorganization occurs that renders a job unnecessary.

Economic changes, financial decisions, restructuring, redundancy, attrition, or a change in function may lead to this kind of separation from employment. Layoffs can happen to one or many employees at once, depending on the circumstances.

Termination for Cause

When an employee is terminated for cause, they are fired from their job for a specific reason. Reasons can include any sort of misconduct, such as ethics violations, failure to follow company rules, breach of contract, theft, falsifying documents, violence, harassment or threatening behavior toward others, insubordination, etc.

Termination by Mutual Agreement

Termination by mutual agreement covers situations where both the employer and employee consent to a separation. Examples include contract employees at the end of their agreement, retirement, and forced resignation. Mutual agreement does not necessarily mean that both parties are happy with the arrangement. It just means that they have formally agreed to stipulations for separation.

Termination With Prejudice

Termination with prejudice indicates that an employee has been fired due to inadequate performance, poor attitude, or ethical/legal transgressions. Employees terminated with prejudice are ineligible for rehire.

Termination Without Prejudice

A termination without prejudice means an employee has been let go for reasons other than performance, behavior, or attitude on the job, as in a layoff. Employees terminated without prejudice are eligible to be rehired into the same or similar job role.

Involuntary Termination

An involuntary termination takes place when an employer either fires or lays off an employee.

Voluntary Termination

A voluntary termination occurs when an employee resigns or retires of their own will.

Wrongful Termination

Wrongful termination happens when an employee is discharged from employment for illegal reasons or if company policy is violated when the employee is fired. Discrimination, complaining about workplace issues, and being unwilling to commit an illegal act on behalf of the employee are other common examples.

Temporary Job or Employment Contract Ends

Once an employment contract is completed, or a temporary job ends, there will be a separation unless the employment is extended further.

Types of Resignation From a Job


A resignation occurs when an employee decides to leave a job of their own accord. Submitting your resignation is an official notice that you are ending the relationship between yourself and the company. Resignation etiquette varies by organization and job type, but typically, it is common for written notice to be issued at least two weeks in advance of your official last day.

Forced Resignation

A forced resignation means that an employer has offered an employee an ultimatum—either resign or be fired. This sometimes falls under the “constructive dismissal” umbrella.

Types of Retirement


Retirement is a separation from employment whereby an employee opts to cease working once they have met the age and tenure stipulations laid out by the employer or negotiated by the employer and a union.

Mandatory Retirement

Mandatory retirement rules are limited to a few occupations where workers are deemed a risk to the public or themselves as they experience diminished capacities after a specified age. Examples include air traffic controllers, law enforcement officers, and pilots.

Phased Retirement

Phased retirement occurs when older employees are allowed to steadily reduce their work hours over time, often months in advance of their official retirement date.


During a furlough, an employee is still considered employed. A furlough is considered a temporary unpaid leave from a job. If the worker is eligible for unemployment benefits, they may be able to collect.

In addition, many employers continue health insurance and other benefits for furloughed employees.

Frequently Asked Questions (FAQs)

What are the different types of employment?

Workers have a variety of different relationships with employers and client organizations. An employee may be full-time, part-time, or temporary. Independent workers are contracted with companies on a per-job basis for a limited time and may refer to themselves as freelancers, contractors, or consultants. People may also volunteer, typically for nonprofit organizations, or work as interns or apprentices with or without pay. 

Is it better to quit or be fired?

Quitting typically means forfeiting unemployment benefits but may enable you to leave on your own terms. Being fired may or may not allow you to collect unemployment—it usually depends on whether you were fired for cause or laid off. If you feel that you may be fired soon, you might try to negotiate your separation as a layoff to receive unemployment pay. 

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. The National Law Review. "What Is Constructive Discharge and How Does It Relate to My Employment Discrimination Case?

  2. U.S. Equal Employment Opportunity Commission. "I Need To Discipline or Fire an Employee." 

  3. National Conference of State Legislatures. "At-Will Employment—Overview."

  4. U.S. Equal Employment Opportunity Commission. "The Age Discrimination in Employment Act of 1967, Section 621." 

  5. U.S. Department of Labor. "I Have Been Furloughed." 

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