Employment-at-will is a U.S. law rule that states that an employment contract between an employer and employee can be terminated at any point of time and for any reason. This is also called being ‘terminable at will’. Reasons for discharging any employee can be “good” or “bad”. These ‘at-will’ employees are those which do not have a backing of any employment contract.
One noteworthy point is that at-will employment clause applies only to infinitely timed contracts, not on contracts that have been defined for a specified term. The major follower of this law is United States. Other nations like Canada, Germany, France, Japan and Italy have provisions that require every employer to show good cause prior to discharging any employee.
In the 1980s, the laws relating to Employment-at-will came under scanner in the United States. Due to the growing discontent amongst employees owing to numerous reasons like reduction in the number of farmers and self-employed people, and people who incurred heavy losses due to being discharged in terms of pension, perks, insurance and other reasons.
Employment at-will works in the other direction as well. This implies, that even an employee can terminate his contract of employment at any time and for any reason. This also has its advantages as well as disadvantages. It offers a huge degree of flexibility to the employee and proves especially useful if the individual is looking for more lucrative job opportunities elsewhere. However, a majority of the workforce around the world requires security. In this regard, at-will employment does not offer job security at all.
There are several limits that have been imposed on employment-at-will. For example, under the Title VII of 1964 Act on Civil Rights, employers cannot fire employees on the basis of their colour, religion, caste, sex or colour. Also, one cannot be discharged for exercising legal rights, such as having the right to serve in military, or take time off work for family emergencies or voting. One major exception is an ‘Implied Contract’, which is a legally enforceable agreement that is assumed to be present between the two parties due to their conduct, to ensure it brings a fair result.