Either party may terminate this Agreement and the Employee's employment at any time by giving the other party in writing the required notice period as defined by the Employee's contract of employment or the statutory minimum notice period, whichever is greater. During any period of notice, the Employee shall continue to work for the Employer unless instructed otherwise and shall be entitled to receive their normal salary and benefits. The Employer may, at its sole discretion, elect to terminate this Agreement and the Employee's employment immediately by paying the Employee in lieu of their notice period. Any delay by the Employer in exercising such right of termination shall not constitute a waiver of it.
Here is a plain English explanation of the suggested Termination clause:
This clause explains how either the employee or the employer can end the employment relationship.
It states that the employment can be terminated by either party at any time, as long as they provide written notice to the other party. The amount of notice required is whichever is longer - the notice period stated in the employee's contract, or the minimum statutory notice required by law.
During the notice period, the employee must continue working and will still receive their normal salary and benefits. However, the employer can choose to terminate employment immediately by paying the employee's salary in lieu of having them work the full notice period.
If the employer does not immediately exercise their right to terminate, that does not mean they waive the right to do so later.
In simple terms, this clause allows either party to end the employment with proper notice, and explains the responsibilities both have during the notice period.
It gives the employer the option to pay salary instead of having the employee work the full notice period.
Termination clauses have long been a standard part of employment contracts to define how the employment relationship can be ended.
Their origins can be traced back to 19th century English common law which established principles of at-will employment and notice periods for terminating contracts.
In earlier eras before formal employment contracts, employment arrangements were more informal and terminations could happen abruptly, leaving workers vulnerable. As employment regulation emerged in the 1800s and 1900s, the law emphasized creating procedures and norms around termination to protect both employers and employees.
At-will employment became codified in state laws in the United States in the late 19th century. This established the default that employment was for an indefinite term and could be terminated by either party. while English law developed the concept of reasonable notice periods.
Termination clauses in written contracts grew out of these principles to provide clear processes around termination. Specifying notice periods and conditions for terminating employment created a more orderly exit for both parties. Standard termination clauses clarified procedures around things like returning company property, maintaining confidentiality, and severance.
Over time, termination clauses evolved to deal with various contingencies and legal considerations around termination. But their basic purpose has remained the same - to create certainty for both employer and employee around dissolving the employment relationship.
They grew out of a desire in the 19th century to move away from at-will, abrupt terminations to terminations with defined procedures and notice.