I'm going to assume you don't do annual performance reviews, so there is no documentation trail.
Two choices here.
First Choice = build a case against this person and who knows, maybe they will smarten up.
Step 1. You have a verbal conversation with them, then send them a memo outlining your discussion and give them an opportunity to respond in writing. Document goes in their file. No need for them to sign it. Just email it to them.
If no improvement, move to Step 2
Step 2 = Meet with them face to face. You come into that meeting prepared with a written documentation of their shortfalls and your expectations AND (this is important), you put them on a Performance Improvement Plan. (There will be examples on line). Typically, you set out a series of goals, deadlines, mile posts, etc and then at that time, you agree to a date for followup. Best to have the person sign the performance Improvement plan and it goes into their file and you email them a copy.
Step 3 = you monitor them to ensure that they are meeting their goals and hope they smarten up.
Step 4, if they continue to dog fuck, you terminate them.
I would recommend you reach out to any number of HR professional consultants if there is big money on the line. But this is how we do it.
Second Choice = Cut to the chase and fire them right now and follow the law which basically states that they get 1 week's pay in lieu of notice (severance) for every year's service they worked for you. They've worked for you for 5 years, you pay them 5 weeks salary and bye bye. Of course, everything is documented, signed and agreed upon prior to issuing any cheque. Again, I recommend you hire an HR consultant to assist you with the verbiage of the letter of termination. But be advised, often long term employees will not accept a crappy 1 week's severance per year of employment. (I would not.) Usually, to get rid of a senior long term professional, we will pay 1 month's salary for every year of employment. A smart employee will engage a labor lawyer (I would. I would never sign anything my employer put in front of me without hiring a lawyer.) You don't mention your line of work, which is fine, but often times employers will decide that they just can't work with a person any more and will pay to get rid of them. Keep in mind that the law is slanted in favour of the employee. If you get taken to the labour board, you'll probably lose. Also, note that there are many variables that go into calculating any "fair" severance. Such as number of years service, age, ease for which that person can find new similar paying employment, if you recruited them from a previous job where they had worked for 20 years (get ready for that if that's the case, you could have to pay for the 20 years in your severance).
Most important when terminating anyone.......NEVER DO IT ALONE. Always have another person with you. You don't want to be accused of anything improper. ("She grabbed my ass.") . Better still, record the conversation. No need to tell the person you're recording the conversation. (You still need a witness though.) Make it fast, if they ask you why they are being terminated, don't answer that. Don't drag it out. Should be out the door in 2 minutes. It's not a discussion, it's a termination. I usually will just start with have a seat, Joe, we've decided to terminate your employment effect immediately. I then read them the term of their severance and wish them well. If they persist, just say, "it's not a good fit" and leave it at that.
Out the door.
As an aside, this is often the result of people "working from home" Let's face it, a great many employees need to overseen and you can't do that if you're working at home. At home there are just too many distractions. social media, TV, Fridge, sofa, have a nap, kids, do a load of laundry, put a load in the dishwasher, you name it. All well and good if the guy is going to plug away for 10 or 12 hours a day. But most people don't want to work more than 7 hours a day anyway and no-one is productive 100 percent of their working hours anyway.
Oh, and at the moment they are being terminated, you have your IT guy cutting them off from the network, their email, etc. You don't want them fucking you up that way. Also, retrieve any corporate property - keys, cell phone, credit card, computer, etc. If they don't have it with them, tell them that they don't get their severance check till they return it. You can hire a courier to go to their place and pick up stuff like that. Don't do it yourself.