11 Valid Reasons for Termination of Contract: Do You Need to Fire a Worker?

By: | April 8, 2021 | Tags: , , , , , |
reasons for termination of contract

Nobody wants to fire an employee. But sometimes, there are valid reasons for termination of contract especially when your employees post brand risks to your company.

You have to reflect on your decision to hire them honestly and realize that you made a mistake. It’s a tough gig, but it sometimes happens. 

What’s more, it’s critical for your business as a whole too. Hiring the wrong people can lead to irreversible brand damage that prevents your firm from ever achieving its potential.

To minimize brand risks, you need to consider reasons for termination of contract.

In this post, we take a look at some of the signs it’s time to let an employee go. 

However, this post isn’t only for employers. Workers concerned about getting fired should examine these valid reasons for termination of contract if they want to try to keep their day jobs.

This post explains the following reasons for termination of contract:

  • Lack of growth mindset
  • Lack of alignment with company vision
  • Negative attitudes towards work
  • Changes in employees’ passions
  • Substance abuse
  • Failing to keep up with the pace of the organization
  • Failing to fit the culture
  • Not telling the truth
  • Constant bad-mouthing
  • Lack of ownership
  • Lacking Integrity

Let’s get started learning why these are legitimate reasons for termination of contract.

What Does “Termination of Contract” Mean?

An employee signs a contract agreeing to work for a certain period of time.

Employers don’t always need reasons for termination of contract. Some contracts state employers can fire an employee without stating the reasons for the termination of the contract.

“Termination of contract” means the employer is ending the contract before the employee finished the tenure with the company. In other words, the employee is fired or let go.

Although employers don’t always have to state a reason, they usually do have reasons for the termination even if they don’t reveal the reason to the employee.

Often, if an employer fears the employee will do the brand damage and harm the brand’s image, they let the employee go.

This post examines possible reasons for termination of contract.

Lack Of Growth Mindset

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When it comes to realizing one’s potential, it requires more than just approaching work with positivity. You also need somebody willing to take themselves to the next level. In other words, they should have a growth mindset

Many employees, however, become stuck in the same groove for years on end, never really challenging themselves or taking strides forward. And, for employers, that can be a problem. They might be ready for a promotion from a knowledge perspective, but their attitudes and emotions simply aren’t keeping pace. 

Lack Of Alignment With Company Vision

Ideally, you want people on your team who share your vision and values. This way, you don’t have to manage so much. Employees naturally veer towards the direction you want them to go without much instruction from you at all. 

When they don’t share the same connection to brand values as you do, trouble can start. You can often find yourself having to say things to them which seem entirely obvious to you. But even though you mention them repeatedly, their behavior doesn’t change. They still don’t seem concerned about the company’s mission or what you stand for. And, therefore, they don’t have any intrinsic motivation to move forward. 

Negative Attitudes Towards Work

Negative attitudes towards work are yet another sign that it’s time to let the colleague go. Not only can they harm your brand, but they can also sap the rest of your team of motivation with their approach to work. Nothing is worse than having somebody continually complaining about the task at hand, instead of just getting on with it. 

You need to be cautious of negative attitudes, though. Sometimes colleagues can develop negativity if they feel exhausted or burned out. Firing them in this situation would be foolish. A complete break from work for a couple of weeks would soon sort them out. 

Changes In Their Passions

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When colleagues first begin work at your firm, they are usually passionate about what they do. Having a job and an income is new and exciting and opens up a world of possibilities. 

But, over time, their passions can change. They might fall out of love with the work they do, your brand, or earning money in general. Other things in their life, such as their faith or family, could take center stage, and work becomes just something they do “to pay the bills.”

When this change occurs in somebody, it is hard to bring them back into the fold. Your brand ceases to be a central part of their lives, and they move on to higher and loftier things. You can try appealing to them, reminding them of their mission. But if this falls flat, your only option might be to let them go. 

Substance Abuse

Employees who abuse alcohol or drugs put your brand at risk. Not only could customers find out that you’re hiring people with substance issues, but their very presence in the workplace could be putting people at risk. Operating machinery while drunk, for instance, is extremely dangerous. 

Because of this, all companies need to put a drug abuse policy in place. You need to outline the conditions of testing and specimen collection in the employee handbook. This way, if you suspect that somebody is under the influence, you can quickly put them through the proper protocols and remove them from the company, if necessary. 

Failing To Keep Up With The Pace Of The Organization

Different brands proceed with varying levels of energy. Some are slow and take life easy, while others are highly competitive and move rapidly. While many colleagues will thrive in fast-paced environments, some will struggle to keep up – or might not even see the point of doing so. 

When this happens, you might want to consider the value that they bring to your team. You need some cautious, steady people in your organization, but not to the point where it becomes a hindrance.

Failing To Fit The Culture

Like it or not, all companies have a culture – a set of assumptions and implicit values that underlies the work that people do. In many cases, people can fail to fit that culture, jarring with other colleagues. 

If there is a genuine cultural mismatch, the employee themself is probably unhappy. No matter what they try, they just can’t go with the flow of the rest of the firm. They find themselves waiting for the clock to strike five so that they can go home. In these situations, it is often kinder to let the colleague go instead of subjecting them to a continued life of misery. 

Not Telling The Truth

Ideally, you would like your employees to tell the truth no matter what. But sometimes, they will lie to you, especially if their performance hasn’t been up to scratch.

Lying is a real red flag – a sign that something’s wrong with the employee. But it isn’t always a reason to fire somebody. After all, practically every senior manager and executive lied at some point in their careers. However, if lying is part and parcel of the personality, then you will lose trust in the person. And that is something that you’ll want to remove as rapidly as you can. 

Constant Bad-Mouthing

Smart employees keep their mouths shut about other colleagues. But there are always those who will badmouth the people they work with. Usually, people do this for two reasons: Either they are genuinely frustrated with the performance or attitude of the other person. On the other hand, they might be worried about their own position and want to deflect attention to others.

As a leader, you need to quickly deal with incidents of bad-mouthing or gossiping. If you don’t, it can afflict the whole team, wrecking productivity, and totally changing the dynamic between people for the worse. 

Lack Of Ownership

reasons for termination of contract

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You want employees who feel like a genuine part of the company. That’s because ownership is the only way to motivate people to act in the interest of the entire brand. If you don’t do that, you wind up in an every-person-for-themselves situation. 

Lacking Integrity

Should you fire somebody for a lack of integrity? Well, to preserve your brand, the answer is “yes.”

Remember, integrity just means consistency of actions, behaviors, and values. So lacking integrity is when they espouse one value but behave in a way that denies that value. 

Many employees have shady integrity. At the interview, they make it seem as though they have the company’s interests at heart. But as you work with them, you get the distinct sense that they have ulterior motives. Their work is shoddy and they keep reneging on their commitments to the company and its mission. 

Reasons for Termination of Contract: Frequently Asked Questions

What Ways Can a Contract Be Terminated?

Even if the employer has ground for firing the worker, they don’t necessarily have to state them. Reasons for termination of contract include any reason the employer no longer feels the employee is a good fit for the company. For instance, the employees may present brand risks.

How Do You Terminate a Contract Politely?

Gently explain why you feel the employee is no longer a good fit for the company.

Wrapping Up: Reasons for Termination of Contract

In conclusion, letting somebody go is always an unpleasant experience. But when it comes to protecting your brand, it’s sometimes worth it. After all, getting a new employee is easy; replacing your entire brand with a new one is not. Don’t be afraid of unpleasant conversations with employees: in many cases, you will be doing them a favor. 

Readers, please share these 11 reasons for termination of contract.

I look forward to your views in the comment section. Can you suggest any additional reasons for termination of contract not on the list?

This post was contributed and made possible by the support of our readers.

  1. Bella X

    I have to constantly deal with alot of people with alot of different attitude and it is not easy. Some can be nice and others very unpredictable. I agree that if one have to let go staff to protect company image then it should be done.

    • Janice Wald

      Hi Bella,
      My daughter works in Human Resources. She doesn’t tell them that they are fired, but she’s in the room during the termination and she must escort them to their office as they clean it out and then out of the building. She doesn’t like this aspect of her job at all.
      Thanks for commenting.

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