Is It Better To Quit Your Job Before You Get Fired From It?

Here are the unseen financial and emotional benefits and costs with each option.
RealPeopleGroup via Getty Images

Many of us don’t always get to choose how we leave a job. But when you do see the writing on the wall at your company, you have an opportunity to consider your options.

Maybe you see finances are in the red, hear grim updates at all-hands meetings, or otherwise know that a layoff may be imminent. Maybe you’re just reaching a breaking point with your boss and are more than ready to work somewhere else.

This is the crossroads you face: do you quit on your own terms, or wait to see if your employer lays you off or fires you?

Both options come with major consequences. How you leave a job, or how a termination happens to you, can have ripple effects for your professional reputation and future financial benefits.

Here’s what you need to weigh up when deciding whether to exit on your own or wait to be ushered out.

PRO: Quitting avoids the unpleasantness of losing your job suddenly.

One big advantage with quitting is that you control the story of leaving the job, rather than having it decided for you. Victorio Milian, a human resources consultant at Humareso, says that in his 15-plus years of experience, being terminated is more emotionally fraught for people than quitting.

“Even when they have an adversarial relationship with the employer, even when they know, ‘OK there’s all this progressive discipline against me, they’ve made it clear that any further missteps are going to result in a termination,’ when you’re actually administering it to that person, it is still always an emotional gut punch for that person,” he says. “So for me, you can avoid that by taking the reins yourself and choosing the way you’re going to exit the workplace.”

Particularly if you are in a job you hate, quitting may also come with much-needed peace of mind that you are finally leaving behind unreasonable bosses and co-workers, and not just suffering until an uncertain end date.

PRO: If you quit, you don’t have to deal with the reputational risk that comes with getting fired.

Future employers are generally understanding when someone loses a job due to a layoff, particularly during the coronavirus pandemic. But getting fired for performance can be a blow to your reputation that you may have to explain to unsympathetic interviewers.

“There is an inherent bias on the part of most hiring managers and recruiters when they come across a candidate that was fired from a previous role,” Milian says. He notes that depending on the role and the state, future employers may find out about your firing during a reference check where they ask your past employer questions like, “Was this an employee in good standing? Were there any disciplinary actions in the last 12 months?“

Of course, getting fired doesn’t always mean your employers have the opportunity to badmouth you. California-based labour and employment lawyer Ryan Stygar said it may be possible to negotiate a neutral reference check in severance agreements or in settlement agreements for wrongful termination claims, ensuring your employer cannot talk negatively about you.

PixelsEffect via Getty Images

CON: Quitting can make it harder to get benefits and severance pay.

Before you wait to lose your job, you may want to calculate just how much you would receive from both severance as well as unemployment benefits, and whether going through a termination instead of quitting is actually worth it.

Work out your budget, recommends Citizens Advice. “This will tell you how long you’ll be able to manage for before you find another job. If it’s not for very long, it could be better to wait a bit longer before you resign.”

It also worth checking if stopping work will affect your or a partner’s benefits. “For example, you could get less Universal Credit for three months or longer if the Department for Work and Pensions says you didn’t have a good reason for resigning. This is called a sanction,” adds Citizens Advice.

“If you don’t have another job to go to, you can claim benefits straight away.
You can claim benefits as soon as you know the date you’re stopping work. You’ll need to show you had a good reason for resigning, or you might get less money for around three months. This is called a sanction.”

Unless your employee contract requires it, severance is not usually guaranteed. In a 2019 survey of more than 1,500 HR professionals around the world, 44% reported that all employees received severance pay after an involuntary separation, but most said the amount depended on tenure and salary.

Some professions rarely see severance packages at all. Milian works with people in teaching and therapy, and points out that it’s very rare for professionals in those fields to receive severance pay. There’s no financial benefit for them to get laid off rather than quit, he says.

CON: Quitting can make it harder to pursue legal action later.

If you want to pursue a wrongful termination claim against your employer, it’s going to be much harder to do that if you quit voluntarily, Stygar noted.

“If you leave wilfully, in a lot of cases, you forfeit those claims. You can’t sue for termination if there was never a termination,” he said.

People can be forced to resign because of intolerable work conditions, like harassment and discrimination, under what is known as constructive dismissal.

This allows you to potentially file a wrongful termination, discrimination or harassment suit, but it can be “hard to prove,” Stygar notes. “If you can tough it out and ask for help when you need it and just get fired, your wrongful termination claim is going to be available much more easily.”

Ultimately, it’s up to you to decide what’s best.

How you choose to leave a job should ideally be a decision you weigh carefully, no matter which course you instinctually prefer.

“If given the choice between resigning and being fired, employees should pause and seriously consider the benefits of a termination that don’t exist with a resignation,” Stygar says, who recommends consulting with an employment attorney if you have questions around severance and unemployment benefits.

“Definitely don’t knee-jerk and resign just to save face. Think about what you are doing. It’s a business decision,” he adds.

Broadly speaking, Milian has a different perspective. He says that if you have a choice, he believes that leaving under your own willpower is best so that you get to define your career story. But he advises that “no matter what the scenario is, be proactive, not reactive.”

“If you are weighing the options of either being terminated or quitting on your own, you have to do the research to weigh the pros and cons of each in the context of your situation,” he says. “And that will determine ideally the best course of action.”