Understanding your employment contract’s termination clause

On Behalf of | Jun 30, 2023 | Employment Contracts |

Many employment contracts include a termination clause. The termination clause defines the expectations and requirements surrounding termination of that employment contract. Every employee should understand the clause and their rights to severance in the event of termination.

There are a few key elements of the termination clause to consider.

Notice period

The notice period details how far in advance either party must notify the other of termination of the contract. This portion of the clause applies to both the employer and employee. Unlike many standard employment-at-will relationships, this clause protects employees from immediate termination in many cases. Advanced notice provides employees the opportunity to seek other employment before losing their source of income.

Grounds for termination

In an employment-at-will relationship, either party can terminate employment without any reason. In contractual relationships, the termination clause defines the grounds for contract termination. This clause is important for employees to protect their rights and ensure that the employer only terminates them with just cause according to the contract’s binding terms.

Severance requirements

Many termination clauses provide parameters for severance pay in the event of an employee’s termination. Understanding severance requirements allows you to fight for the compensation owed to you after termination. When a severance agreement is part of the termination clause, employers must honor that commitment.

Understand the specific terms of your employment contract’s termination clause so that you have the tools to protect your financial interests and your legal rights. That contract serves as valuable evidence to support a court claim if necessary to get you the compensation you deserve.


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