Introduction

Employee Termination Letter comes into play when you dismiss an employee from their job.

This letter ensures the employee receives the message of their termination along with other related information & documents.

Employee termination letter tells the employee that their working relationship has come to an end with the company. It is important that you frame the termination letter perfectly.

This article covers all the aspects related to the termination letter. Plus we have provided a termination letter template & sample termination letters, to give you a better idea about how you should draft one.

So, let’s clear most of the questions you have related to it.

What is an employee termination letter?

An employee termination letter is a written document that notifies an employee about their termination from the job.

It holds important information regarding termination, like the employee’s name & title, the reason for termination, benefits they’ll receive, etc. 

It’s important to give the employee a termination letter no matter if the relations with the employee were good.

The main reason to create it is that it gives protection to your company against legal actions if they arise.

What should a termination letter include?

Since it is an official document that’s why you must create it in that manner only. After drafting, you must let your legal team look into it before delivering it to the terminated employee, to check if everything is okay.

Depending upon the size of the company, and other factors you might need to add other relevant information apart from what we have listed.

The termination letter should include the following:

• Employee’s name & designation
• Name of your company
• The effective date of termination
• Reason of termination (without cause, with cause, end of contract)
• Company property to be handed over – vehicle, laptop, mobile, swipe card, etc.
• Information regarding benefits & compensation they’ll receive.
• Procedures to acquire health coverage via COBRA law, severance pay, etc.
• Info about their final paycheck. The amount they’ll receive, on which date they can expect it, etc.
• Details concerning legal agreements like non-disclosure, non-compete, and the likes
• Who they must contact, in case they have any questions

Definitely, some of the things we have mentioned you can exclude if they are not applicable, in your letter.

What tone to use for employee termination letter?

You need to talk to the point & maintain a professional tone while drafting a termination letter. Keep in mind that it is an official document so being specific is crucial.

The tone should sound firm yet empathetic in case of good relations with the employee. But if the dismissal is happening for the cause then we recommend using a diplomatic tone only.

Let someone among your peers read the letter after you complete it, to make sure if the tone is okay.

What to omit while writing a termination letter?

Leave out sarcasm, ambiguity, jokes, unnecessary information/details, and the likes. It holds value in the eye of the law, and it will give you legal protection in case of a lawsuit. Make sure you leave no space for mistakes as well as confusion of any kind.

Employee termination letter template

[Date of the letter]

Dear XYZ,

This letter is to inform you that from [date of termination] your employment with [company name] will end. The decision is final & cannot be revoked. This decision is taken due to [list the reason/s].

As we have discussed earlier, as per the policy you are entitled to receive: [list the compensation & benefits the employee gets].

You are requested to hand over the [mention company property to be returned] to the HR manager on your last working day.

Please remember you have signed a non-compete & non-disclosure agreement with our company, copies of which are attached with this letter. If you hold any information with respect to our customers, the company, etc., in your possession, please erase it right away.

If you have any questions regarding this matter, you can contact [name of the HR] during the weekdays.

We wish you all the best in the future!

Sincerely,

[Name of the person handing over the letter]

Sample employee termination letter 

Here are some samples of the termination letter. Check out these to get an idea about how you should make them.

Sample termination letter without cause:

10 October 2021

Dear Mr. Rick,

This letter is a written confirmation about your end of employment with Corp. International on 31st October 2021. This decision is final & cannot be changed.

Our company is facing financial issues & that is why we are laying off 30% of the staff which includes your position as well. We took this difficult decision to avoid further losses incurred by the company.

You will receive health care benefits for the next month along with your final paycheck by the end of this month. Get in touch with the HR manager of your department to know your eligibility for COBRA insurance & the process of getting it.

Please return your mobile, laptop, company ID & swipe card to your manager on your last working day.

It was a pleasure to work with you. If you like we will provide you with a letter of recommendation & will assist you to find another employment opportunity.

We wish you the very best!

Sincerely,

David Johnson

Sample termination letter with cause:

1 November 2021

Dear Mr. Robert,

This letter is a written confirmation about your dismissal from your job at Corp. International, effective immediately. This decision is final & cannot be changed.

We have terminated your job due to the following reasons:

On March 22, 2021, you took leave without taking approval. We provided you a written warning about this which mentions that this is a violation of the company policy.

On July 14, 2021, this was the 2nd time you were absent without taking permission. At that time you were given a written warning. It was informed to you that if this happens for the third time, it will result in your dismissal.

On 28 October 2021, for the third time you were absent without permission which resulted in your termination.

You will receive a final paycheck for this month. You are eligible to receive severance pay as per the employment contract along with health coverage for 1 month, from the date of termination.

Please return the company laptop, car & employee ID to the HR manager on your last working day.

If you have any questions regarding your compensation & benefits, please contact HR manager, Miles Johnson at123456789.

Sincerely,

John Miller.

Note: These letters are provided only for reference. Please consult with your legal team when you make one before sending it to the employee.

Now, that you know all about the Termination letter. We thought you might be interested to know about the process of firing an employee harmoniously.

How to terminate an employee?

There are instances when you need to lay off an employee. It is for true, a difficult thing to do, but you need to carry it out.

Dismissing an employee from their job seems uncomfortable for everyone involved, namely the employer & the employee. But unfortunately, sometimes it has to be done for the welfare of the company & others who are working there.

Let’s jump to the main part! But, before that here are some important tips for you.

Quick Tips:

The following tips will help you to be ready for this process:

• Before terminating an employee you must make sure you are ready with the script & with all the documents that are required.
• Remember to go through the employee policy/contract so as to make sure you are making the termination on solid ground.
• The reasons must be there on the employee policy for which you are terminating, otherwise don’t do it, as it may attract a lawsuit.
• Keep the meeting as short as possible.
• You must maintain the dignity of the employee while terminating.
• Conduct the meeting at the end of the working day as it ensures they don’t feel embarrassed at the time of termination.
• Give them ample opportunity to improve their performance before giving them termination. Notify them that if they fail to improve then it will lead to dismissal from the job.
• Include human resources manager or a trusted employee as a witness ahead of conducting the termination process.

Follow these steps to terminate an employee smoothly:

1. Fix a meeting with the employee

It is advisable to set a meeting with the employee to give this message to them in person. Do not terminate an employee over electronic means or on a phone call. Set the date & time, comfortable for both the employee & the employer.

2. Conduct the meeting smoothly

Now, it’s time to meet the employee and convey them the news about their termination tactfully. Tell the employee about his/her termination & specify the reason behind this action.

Don’t sound rude while speaking with the employee & don’t say unnecessary things like “I understand your situation”, “It’s for the best”, etc.

Furthermore, inform them about the benefits & compensation they will receive after termination. Not just that, cover all the necessary points in the meeting to ensure that the employee gets complete details regarding this case.

3. Ask the employee to return the company property

After you declare the termination, ask the employee to surrender any of the company property which is in his/her possession. Car, laptop, mobile phone, etc., are some of the examples of company property.

4. Revoke access of the employee from the company systems

After termination, the employee should be restricted from accessing company data & computer systems. You can change the passwords of the systems to maintain security.

Conclusion

To conclude, we want to say that if you plan to dismiss an employee, please take into consideration all of the directions mentioned here. 

As you know this situation is difficult to face, but you can easily avoid it if you recruit the right candidates. As a result of employing the right employees, you won’t have to face termination.

So, bring the right & most talented candidates with our world’s easiest Applicant Tracking System, Recooty. It makes the recruiting process effortless & helps to source candidates from the top job sites like Indeed, Monster & others.