You can say you do not have enough business and have to let him

You can say you do not have enough business and have to let him go.

When he comes to work in the morning, just tell him that and wish him good luck. He is probably too surprised to say anything.

I did that a few times and it worked well. (Now I have employee review process, which may help me later.)

Employees should have proficient skills and as well as good attitude. If he does not respect you, he has to let go. That's my principle. He needs to know who is the boss.