Which phrase fits best: "He lost his job ________ inefficiency"?

The phrase "on the grounds of" is the best fit in this context because it is commonly used to indicate the reasoning or justification for an action or decision. In the case of losing a job, saying "He lost his job on the grounds of inefficiency" clearly communicates that inefficiency was the reason for the job loss. This phrase effectively conveys the idea that the action taken was based on a specific reason.

The usage of "on the grounds of" is prevalent in legal and formal contexts, where decisions are justified by citing specific reasons or criteria. When someone is dismissed from a position, it is standard to articulate the rationale behind such a decision, making this phrase particularly appropriate.

Other options do not fit as appropriately: "by the terms of" suggests conditions or stipulations in a contract, which is not the case here. "On the basis of" is similar but less precise in formal contexts compared to the established phrase "on the grounds of". "Due to the grounds of" is not grammatically correct since "due to" typically introduces a cause, while "grounds" suggests a justification, making the phrase awkward and incorrect.