If you have no problem filling the space then get rid of them! Two hours late would be the final straw for me, without a phone call? I would be livid! I would ask them to pay an extra day's pay or something outrageous I would be so angry. Get some clients who respect you and don't feel the least bit guilty about it. I had to terminate some clients in my first year and it's really difficult but the burden that lifts off your shoulders once they are gone is amazing.