66

This may be seemingly obvious question, but I can't quite grasp the difference, and I also haven't found a satisfying answer.

Is it something like when you get laid off you still get to work for a month ( or some time period ) at the company, and when fired, its instantaneous?

Are there pros and cons?

  • 5
    cause is the difference – Richard U Jun 29 '17 at 15:04
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    I don't understand the reason for the Close votes or down votes. While this may be an obvious question to some, its not an outright dumb question. I have seen many worse questions than this. – Mister Positive Jun 29 '17 at 15:13
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    @MaskedMan In my native language, there is no different word for these two, and also, there is no difference in law. We can only "get fired" here, and you get unemployement rights anyways. – Dragonturtle Jun 29 '17 at 15:17
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    I think the difference deppends on the country. In my country they are several ways to terminate a job, but they aren't easily classified between "being fired" and "being laid-off". Maybe this question should wear a country tag. – Pere Jun 29 '17 at 16:44
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    @MisterPositive: Hover your mouse over the downvote button. You'll see that "does not show any research effort" is a valid reason to downvote. – Lightness Races in Orbit Jun 29 '17 at 22:35
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Being fired is reserved for individual personnel issues: performance, behavior, etc. This would be targeted at a single individual.

Being laid off is when the company is having financial issues and needs to remove costs. This is almost never just a single individual losing their job or the suspicion would be that it's actually a firing.

Note that financial issues can include things like "We don't want to spend as much money as we used to."

From this website: https://www.thebalance.com/difference-between-getting-fired-and-getting-laid-off-2060743

Being fired and being laid off are two distinct ways of leaving a position. Being fired vs. laid off can impact your eligibility for unemployment as well as your hiring prospects for the future. Therefore, it's a good idea to be very clear about the precise nature of your termination, should you lose your job.

To collect unemployment, you typically need to have lost your job "through no fault of your own." People who are laid off are [more] likely to receive unemployment because they left due to restructuring rather than personal performance.

In either case you could stay on to work if the company allows it, but this almost never happens in the case of being fired.

  • 18
    That's not really a creditable source. Unemployment laws, in the US, are governed at a state level. In many states, you can still collect unemployment, even if fired for performance reasons. Typically, disqualification for unemployment comes from "gross misconduct" which typically means you broke the law(sexual harrassment, assault, embezzlement, etc.). You'd have to check your state unemployment laws to determine your eligibility to collect unemployment. – Triplell89 Jun 29 '17 at 15:12
  • This does not actually answer the OP's question. – Mister Positive Jun 29 '17 at 15:14
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    If the whole point of OP's question is the final sentence, then maybe it does not @MisterPositive I think it does though, and includes something about unemployment. – Robert Rodriguez Jun 29 '17 at 15:16
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    There can also be a mix of the two reasons: supposing you have to cut costs by laying-off employees - and you have employees that you would certainly like to get rid-of - you can then fire someone while keeping the pretense it was a layoff. – Dai Jun 29 '17 at 19:35
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    @Dai and that is why it always reflects poorly on you for future employers. Being out of a job, regardless of the root cause, is never good for you. It always severely impacts your employability. This is why one should change jobs at the first sign of trouble your employer has. – Juha Untinen Jun 30 '17 at 9:30
31

Are there pros and cons?

Absolutely. You would much rather be laid off than fired. If you are fired you may have to explain the situation to future employers whereas if your were laid off it is self explanatory.

The term "fired" means the company got rid of you due to performance reasons ( on an individual basis).

"Laid off" means you were let go to save the company money, and typically you would not be the only one affected by this.

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    Layoffs are a time to both cut costs and trim the fat. That means expensive employees and underperforming employees are candidates to be laid off. If I'm interviewing a job candidate who was previously laid off, it's incumbent on me to determine if it was for performance reasons. A struggling employer wouldn't get rid of a star performer if an underachiever could go instead. – user2023861 Jun 29 '17 at 18:39
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    +1. If one is fired for performance reasons (which might be arguably true or not true), how can he explain it in future interviews if being asked? – Tim Jun 29 '17 at 22:29
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    @user2023861 "A struggling employer wouldn't get rid of a star performer if an underachiever could go instead." That's not true. A star employees salary could pay for 5 or 6 under performers, then the star performer gets the boot. This happens a lot in situations where there is a "fixed raise" per year and someone has been with the company for many years. – coteyr Jun 30 '17 at 8:02
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    "Keep the star performer" is the rational company fallacy. Especially in larger companies, that no longer can be assumed. E.g. IBM utterly ruined their reputation by cutting quality much faster than they cut costs. – MSalters Jun 30 '17 at 14:02
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    Performance can also include "compatibility problems" with people I suppose. Unfortunately sometimes companies enact layoffs like "one person from every group" and it doesn't matter if they're a star performer or not, somebody gets the boot...or like the other comments, the guy who makes the most gets the boot. Odd I know... – rogerdpack Jun 30 '17 at 19:39
23

This may be seemingly obvious question, but I can't quite grasp the difference, and I also haven't found a satisfying answer.

When somebody is fired, the company was unhappy with his or her ability to do the job. The job is still there and needs to be done. The company will probably look for a better suited individual.

When somebody is laid off, the company removed the job. The job is gone and so is the individual performing it, with no indication whether this performance was good or bad. Generally people assume the performance was at least average, or the company would have fired (see above) the person and hired somebody else, keeping the job to profit from it.

(Please note that when I said "removed the job" it does not mean they removed all jobs of a kind. Removing a job means you have one less. So you could lay off 5 people by reducing the number of programmer jobs from 10 to 5 for example).

Is it something like when you get laid off you still get to work for a month ( or some time period ) at the company, and when fired, its instantaneous?

Notice periods and unemployment benefits depend on local labor laws. You will need to look that up for your jurisdiction.

Are there pros and cons?

There are really no pros. The person is out of a job either way. Maybe there is a severance package, but that, as notice period and unemployment benefits is subject to local labor laws and can happen in both cases.

If in doubt, you want to be laid off, because that implies no fault of your own and is normally not held against you in future job interviews. But what you really want is to switch jobs before either scenario happens.

  • Getting fired is most definitely worse than being laid off. – Mister Positive Jun 29 '17 at 15:58
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    @MisterPositive I agree. Did I say something else? – nvoigt Jun 29 '17 at 15:59
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    Nope, I just read it too fast! – Mister Positive Jun 29 '17 at 16:00
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    @nvoigt My apologies; I may have misread. I didn't see mention of unemployment benefits the first time through. I also though this was a US-specific question but see there is no specification now. So I retract my suggestion. – Nicholas Jun 29 '17 at 16:26
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    Well, in germany people are often laid off based on social considerations AND job seniority. By law. You first get rid of the newest hires, particularly those still in or around the trial period for example. In large companies most of the process will be formalized. – TomTom Jul 1 '17 at 9:07
9

US perspective.

To be fired, means you did something wrong. You may be fired without cause, which means they don't want to document why you were let go, or fired with cause, meaning they document fully why you were let go.

Without cause is generally political move to give you a place to go. It's a bit of a risk for a company to fire without cause, so it's pretty rare, but it does happen when the company wants you gone, and would rather do it faster then documentation requires. For example, you really piss your boss off, and while they could write you up three times with 30 days in between for minor infractions then fire you, they just want you gone. You as an employee may accept this, because you found a new awesome job and want to go there, and don't want to have to wait 90 days to get fired, or want to breach your contract.

Another good example of this (fired without cause) would be when you have good terms with your employer, but you find a much better job offer they can't match. However your contract states that your there for a certain amount of time or you loose a bonus or some such. Your current employer may fire you without out cause so that you can take the new job, effectively releasing you from your contractual obligations.

Fired with cause is easy. You did something wrong. Maybe performance, maybe behavior, maybe both. But you, individually did something wrong.

By far fired with cause is more common and fired without cause is risky for the company. If you get fired, you can almost be certain it's with cause.

Laid Off means that your job (not you) was reduced. It's not uncommon, and there are a lot of reasons to do it. Usually it's motivated by money. For example if you have a worker making $20k and a worker doing the same job for $40k You might lay off get $40k worker and hire 2 new $20k workers.

Another example is a company that needs to reduce their expenses may layoff half their employees to do so.

This happens a lot in support and retail jobs around the holidays. There is a big hiring phase in October or November and in January or February a big "Lay off".

What it means for benefits

Different states have different rules but in general lay off, or fired without cause will get more benefits for longer. Fired with cause will get little to no benefits. This will depend a lot on the local laws.

What it means for job seeking

Fired with cause you will 100% have to explain. You will need to identify what you did wrong and why you won't do it again. It can be very difficult to recover from a fired with cause. Generally the company you were fired from will give you a negative reference. Keep in mind that most US companies will only confirm employment, attendance, duties, and termination reason. So you new job prospect calls your old job and the old job may say "Employed from 2010 to 2017, good attendance, server admin, fired for sexual misconduct" and that's it. They likely won't explain more then that.

Fired with out cause you will need to explain, but as it's generally mutual you may still get a positive reference. "Employed from 2010 to 2017, good attendance, server admin, let go under mutual agreement" This may actually be a good thing, or bad, depends. It's certainly a flag for the interviewer, but one that can be explained away.

Laid off, generally needs no explanation. You past employer probably won't give one, and you just generally say something like, "I was laid off due to budget cuts." It happens and is a normal part of business. It depends a lot on your job though. If your an "extra" employee that is easy to out source, it probably happens all the time, while "core" employee that is very difficult to outsource, it may be very rare. When I worked as a developer for a call center years ago, almost every agent (phone call taker) had been laid off several times in their carriers. They would get laid off at one location and just move to another. Or laid off at one company and move to another. For example a T-Mobile contract would leave company A and go to company B. 90% of the staff on that contract would be laid off, and just go get a job at company B, then when the T-Mobile contract eventually moved back to company A, they would be laid off at company B and re-hired at company A.

Social Notes

When people talk, they generally use Laid off to mean fired or laid off. It's less embarrassing that way. But you need to make sure you have it 100% correct when your going through interviews. Saying you got laid off when you were really fired is a automatic "ban" from the interview process.

  • There are certainly cases where objectively good and fine performing employees are fired because of company politics/management related issues. I would think that most of those would end up in fired without a cause group. Hence, maybe being fired without a cause isn't much worse than being laid off? – Akavall Jul 1 '17 at 18:35
5

In the UK, for permanent employees:

"Fired" is an informal term for "Dismissal", for reasons other than redundancy.

"Laid off" is an informal term for "Made redundant".

Dismissal means that the business doesn't want you any more, and can show that you're not fit for the job.

Perhaps you've consistently under-performed -- the employer would need to prove that they've given you repeated warnings and opportunity to learn and improve. Perhaps you've been guilty of gross misconduct -- misusing work equipment; sexual harassment; racist abuse; bullying; disobedience; endangering the public; causing the company to break the law (e.g. using pirated software to do your work, fiddling work accounts); embezzlement, etc. Perhaps you've been negligent.

A serious incident would be grounds for immediate dismissal. Less serious incidents might result in a warning, with repeated offences resulting in dismissal.

If the reasons for dismissal are not sound, the employee may sue for unfair dismissal, and might claim compensation, even getting their job back (awkward!).

Redundancy means the job doesn't exist any more. A classic example of this would be a downturn in demand. I used to sell 1000 widgets per month. Now I sell 500 a month. I can manufacture those widgets with half the factory workers I currently have. Other reasons might include automation or even outsourcing.

UK law is pretty clear that the job really has to not exist. So if you're made redundant, then a short time later someone else is recruited into the same role, you have a strong case to claim unfair dismissal.

In the UK, for larger employers at least, the employer must provide the employee with an independent legal representative. They must give a notice period, based on years of service. They must give the employee an opportunity to look for suitable alternative employment within the company.

When making someone redundant, a UK employer must give the employee a lump-sum redundancy payment. There are statutory minimums set by the government, linked to current salary and years of service.

Typically employers exceed the statutory minimum payment, and can be really quite generous. It helps foster a less hostile relationship between employer and ex-employee, reducing resentment held by their remaining colleagues/friends. It provides a disincentive for the employer (or their lawyer) to make a fuss about irregularities in the process.


None of this applies to contractors.

1

From the employer's perspective, there are a few differences.

Firing

The employer usually needs cause to fire someone. That means the employee is breaching their contract or causing problems in some way. Firing also opens a company up to a greater possibility of lawsuit, like an employee who believes they were actually fired for religious discrimination.

Lay offs

The cause for a layoff is restructuring, generally for financial reasons. No individual reason needs to be given to explain why a certain employee was laid off. Often times, employers can use this to git rid of the under-performing staff, or the over-paid senior employees.

  • 1
    Do note, however, that some legislations (parts of Western Europe) do govern the order in which employees get laid off. If 5 out of 10 people doing the same job get laid off, and of these 10, some have families to support while others are single, the employer may be required by law to lay off the singles first. So in this situation, the employer would need to justify why these particular 5 people were chosen. – user149408 Jun 29 '17 at 20:58
  • @user149408 that's startling. Could you share some article on that? – Jesvin Jose Jun 30 '17 at 6:36
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    It might be valid for some country, but as a general statement it is simply wrong. There are many countries where usually firing for misconduct is no-issue, but lay-off is open to protest. – user50700 Jun 30 '17 at 10:06
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    Btw, if you are laid off in Bulgaria, your employer has to pay you 6 salaries. Also, he cannot rehire someone on the same position for some time. – Ivanka Todorova Jun 30 '17 at 11:22
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    @aitchnyu only in German, unfortunately, namely §1 Paragraph 3 Kündigungsschutzgesetz: buzer.de/s1.htm?g=KSchG&a=1 – user149408 Jun 30 '17 at 11:31

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