From time to time, the employees of an organization will usually have to be dispensed. These could be due to gross misconduct on the part of the worker or the loss of revenue by the firm. As a matter of courtesy and to conform to the various labor laws, the employer has to draft and issue the affected employee with the employee termination letter.
Apart from notifying the employee of his loss of a job, the letter also outlines the steps that the affected employee ought to take going forward. It also explains the benefits and the remuneration packages that the employee is entitled to. It is also called a contract termination letter or a notice of termination of employment.
Types of Employee Termination Letter
Termination Letter due to Layoffs/Downsizing
This perhaps is the most common kind of letter of termination. Companies downsize their workforces from time to time due to a dip in demand or a difficult business environment. It is a bit straightforward and less painful to draft compared to the many other kinds of letters.
Termination Letter for Cause
Next comes the termination letter for a cause. In this instance, the termination is implemented as a result of some error, misconduct, or disciplinary issue on the part of the employees concerned. Here, the letter states explicitly why the employee is shown the door. While at it, the letter makes some references to the various labor laws and conventions.
Termination of Business Contract
Termination of business contract is strictly speaking, not an employee termination letter. Instead, it suspends a pre-existing business contract. This is the one you use when dealing with other business people rather than the ones you have employed and hired.
What Kind of Tone Should I Use?
Matters of job losses are often very emotive. That is given the problems that come along with a job loss like a dip in the income levels, stress, depression, and a host of psychological problems. You have to use a tone that is persuasive and kind to deliver the sad news hence.
Remember also that many employees never go down without a fight. They will often troop to the courts to have their grievances addressed. Be sure hence to use a tone and language that is not offensive and can withstand the scrutiny by the courts of law.
What to Include (How to Write)
Though these letters vary widely in scope and content, they contain some unifying details that serve to convey the content to the targeted person. They are:
Name of the employee
This is the name of the employee who has been affected by the termination.
The name of the company that is implementing the termination altogether.
Name of the Line Manager
It is the person who is overseeing the termination. Most probably, this is the person who decided that the employee be terminated.
Date of Termination
This is the official date when the termination is to take effect.
Reason for the Termination
A vivid description of the exact reason why the employee is terminated. This is often followed by references to the various labor laws or other regulations that vouch for that reason.
A listing of the previous written and verbal warnings
Before the decision to terminate the employment contract is arrived at, and there are usually some verbal or written warnings that are sent out to the affected party. The letter has to explain and refer to the past warnings as a justification for the eventual termination.
A list of the items to be surrendered
It could be that the employee may be in possession of some pieces of property of the company he works for. It is at this stage that the employee is asked to surrender the said items as well.
Receipt of Company Property
Other than the real pieces of property, the fired employee has to also surrender the receipts of the company property.
Send-off Package Details
In closing, the information about the send-off package has to be displayed. These include the severance, vacation payments, and final paychecks are some of these.
When Should you Send Termination Letter
There are a number of circumstances that necessitate the use of the termination letter. Here below are some of those, vividly explained:
Redundancies are by far the primary reason why these letters are issued out. When used in this sense, the letters communicate that the position presently held by the worker is no longer available. The exact reasons may vary from company to company and circumstance to circumstance.
When an employee engages in gross misconduct, he too may be given a pink slip. The exact reasons have to be stipulated clearly to avoid the abuse of this loophole by an employer. If possible, references have to be made with regard to the various laws and regulations that sanction the same.
Compliance with Statutory Obligations
Many states and local jurisdictions demand that this letter be used before an employee is fired. The failure to use this letter may render the termination null and void. Thus, the letter, to some extent, serves to comply with the various statutory obligations.
We have explained earlier than matters to do with job losses often get too emotive. It is not uncommon, in fact, for the same to spill over to the courtrooms. Yet again, this letter comes to the rescue of the employer as it helps him to argue his case to the jury.
Minimum Period for Sending the Termination Letter
There is a mandatory interval within which this letter is to be sent to the affected period. No universal law exists as regards this duration. Nonetheless, some guidelines form the bedrock of the waiting periods.
For an employment contract that lasts less than one year, there has to be a one week period; 2 weeks for a contract lasting 1-3 years; 3 weeks for one that lasts 3-5 years; and one month for the contract that lasts in excess of 5 years.
What Should You Leave Out?
For the sake of passing the message well and spare the affected person from the shocks that ordinarily come along, there are some things that ought to be avoided. These are:
Jokes and Sarcasm
You should make every effort to stay away from all forms of jokes and sarcasm. These may not go well with the affected person as they may be construed to be mocking. Instead, use a straightforward language that is devoid of anything that may be considered not serious.
Next, avoid inappropriate languages like mockery, insults, or demeaning words. Remember, this letter may have to be produced and used in a court of law. All these words may have to be used against you someday. Maintain some fair degree of professionalism as you go about drafting it hence.
Incomplete or Ambiguous Information
While drafting this letter, you should make every effort to back your allegations with solid facts. Refer to the various labor laws and employment regulations that govern the career that is affected by the layoff. That will convince the affected employee of your seriousness and help with litigations later.
Employee Termination Letter (Samples & Examples)
City, State Zip Code
Re: Employee Termination Letter
Even though your work with our company has been excellent, we are sad to notify you that your position is redundant. The economy is facing tough times occasioned by the ongoing COVID-19 pandemic.
In compliance with the various labor laws, we shall pay you the full salary for this month alongside a 13% gratuity. As for your pension, you will have to wait till you attain the mandatory retirement age of 65 years.
Your termination takes effect within a fortnight. Though we welcome any grievances from you, kindly note that the decision is final.
We wish you well in your future career endeavors.
Signature (hard copy letter)
Dear Mr. /Ms. Last Name:
Subject: Your Name – Employee Termination Letter
You have been working for us for an unbroken 7 years now. While we admire the quality of your work, you have not shown diligence as pertains to the attendance of duty. As per our list of attendance, you have been coming late, around 60% of the time.
To add insult to injury, you have failed to pull up your socks despite receiving warnings from us on three separate occasions. Kindly refer to your records for the full details of these warnings.
Now, this is simply untenable. We cannot continue to keep you a part of our team with this kind of lackluster approach to duty, hence our, unfortunately, decision to fire you.
We wish you all the best in your future job and career undertakings.
Termination Letter Templates
Frequently Asked Questions (FAQs)
You are advised to discuss the matter with the employee first and foremost before issuing the letter. That is to relieve stress, prepare the employee psychologically, and avoid unnecessary conflicts going forward.
Not necessarily! He only needs to sign that he has indeed received it, for the purposes of record keeping future follow-up. Him not signing the does not invalidate it whatsoever either does it affect the termination.
Larger companies often have forms that they hand in to their employees in the event that they have to sack them. If you belong to such a firm, by all means, you have to make use of the said form.
Our long and detailed look into the employee termination letter comes to an end there. As you may see, the letter plays a critical role in facilitating the laying off of the employees. You should hence make maximum effort to learn how to draft and use it in your dealings with the employees hence.