I have an employee who is a manager that i have spoken to many times and he has not improved his work habits. I feel it best to fire him and just pay out a severance package. Is this legal

It is absolutely legal, but we should discuss how much severance is owed to him. If he is let go without adequate severance, that would be a wrongful dismissal. The factors that go into deciding how much severance is owed are the length of employment, the person's age and the type of job that he has. Please give me a call to discuss so that we can make sure you have no problems.
Lior Samfiru