What's the Difference between the Contract End Date and the Termination of an Employment?

 

The employment contract between your company and an employee can be terminated in various ways. This article describes what you have to consider when a fixed-term contract expires and how to permanently terminate the employment.

 

Contract end date

If an employee has a fixed-term employment contract, the contract end date can be noted under Employee profile > Personal info > HR information > Contract ends.

Please note that entering a future date as the contract end date is for your information and to enable the prorated leave entitlement calculation only, and does not initiate automatic employment termination in Personio on that date. 

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This note can also be tracked under Employees > Timeline view. There, the month in which the contract ends is highlighted in pale yellow. Since fixed-term contracts are usually extended, the employee will still be listed as an employee in your timeline, even after their expected departure from the company.

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If you need to take organizational steps before the contract end date either to extend the contract or terminate the employment, those responsibles can easily set up Reminders for employee contract end dates.

The contract end date also has a direct effect on the employee's Leave accrual. The vacation days for the year in which the contract ends are calculated pro rata on the basis of your Accrual policies and in accordance with the Contract end date. If you extend an employee's contract, the number of vacation days available to them may also change. 

 

Terminating an Employment

If you do not want to extend your employee's contract or wish to terminate the employment for any other reason, you can use the appropriate function to correctly enter this information into Personio. To do so, navigate in the Employee profile to the button with the three dots in the upper right corner and then select Terminate employment.

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You can now permanently terminate the existing employment contract with your employee. To do so, enter the date on which the employment ends, the termination type, the date of the last working day and optionally specify the reason. Besides, you can adjust the number of vacation days remaining when the employment is terminated.

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On the date specified as the Termination date, Personio automatically sets the affected employee profile to an Inactive status. From this point on, the employee can no longer log into their account.

In order to keep track of all the organizational steps associated with the departure of an employee, you can set up an offboarding process in Personio. The offboarding process operates in the same way as an onboarding process and accesses the same elements.

Of course, terminating an employee's employment does not cause them to be automatically deleted from your Personio account. However, they will be assigned Inactive status after leaving, allowing you to retain all employee data. Also, the final termination date is highlighted in red in the Timeline view and the employee is no longer listed as an active company employee.

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