i would have thought that regardless how crappy a person is at their job, if they have been there for 8 yrs they deserve some flex. Most people I have heard of being "dismissed" basically arrive at work one day, they are told to pack up their desk, hand in their cards, and to tidy things up, and then go home, and never come back. this is done for security/sabbotage reasons! one months pay plus whatever else is owing is then paid. some contracts demand 3 months pay for employment periods over a few years.
It's a conflict of interest - you want to get rid of an employee and save further losses, the emplyee has to find a new job witout a good reference. I think maybe the business is in the position to be mr nice guy here, yes?