A Termination Letter is a notice that informs an employee he has been dismissed from his current job.
Employers need to know the best way to terminate an employee’s contract. Therefore, knowing the different types of termination letters and how to implement each one depending on the situation will allow employers to avoid legal issues in the future. Therefore, this article will highlight the types and samples of termination letters so that employers can better understand how they need to act in case of terminating an employee.
What is a Termination Letter?
This letter can also be called a Contract termination letter, letter of separation, termination of services letter. All these names give a clue of what the letter entails.
The letter provides a detailed description of the following steps that the employee will have to take in the successful exit from the company. However, these letters are not only issued by employers. Employees also issue contract termination letters based on resignation.
Free Examples
Below is our comprehensive collection of sample termination letters. These meticulously crafted sample letters offer you a valuable resource to navigate the delicate process of terminating employment or lease contracts. By utilizing these samples, you gain access to proven templates that ensure clarity, legal compliance, and adherence to best practices, enabling you to effectively communicate termination decisions with confidence.
When are Termination Letters Used?
Different reasons warrant the issuance of a termination letter to an employee in an organization.
For example:
It could be the HR policy of the organization to have a contract termination letter of the employee that is being let go.
One of the reasons a contract termination letter is used is when the organization is downsizing due to some unforeseen circumstances. In the same way, many companies globally were downsizing during COVID, this reason is not proportional to the performance of the employee, but the need for the company to survive.
Another reason for a termination letter is when the employee performance drops below par in the organization. At that point, employers will have no other choice but to offer a contract termination letter.
Finally, offering a termination letter indicates termination of any business contract you had with someone. It means you are no longer interested in the working relationship. Business owners also need to understand some of the intricacies of the law that guides issuing termination letters.
According to the Fair Labor Standards Act, there is nowhere that employers need to give a heads up to an employee about their termination. Employers are even liable not to issue a termination letter. However, if the employee belongs to a union or is caught in a massive layoff, the employer must notify before issuing the termination letter.
Why are Termination Letters Important?
Imagine having to let an employee go after many years of service with the words “You are fired.” It will be highly insensitive and completely disregards the feelings of the employee. One of the reasons why a termination letter is important is the reputation of the organization.
The image the organization always seeks to portray cannot be tainted, and the mere word of mouth termination can affect how the employees and even outsiders perceive the organization. Furthermore, a contract of termination is essential in case of a legal suit.
In any case, where the employee seeks to take legal action, you have proof documenting the reason for the termination, and your organization can be absolved from any legal problem.
Although this reason is of sentimental value, it is also essential. Contract termination is essential to prepare the employee better for the things to come. The letter of termination allows the employee to process the upcoming realities of unemployment and make the necessary adjustments. It is best to remain respectful even in dire situations with the employee.
Should You Write? Legal Considerations
We have highlighted that one of the reasons for writing a termination letter is to stay away from legal issues. However, some information needs to be included to be absolved of any legal constraints that may be imposed on your organization if you default. One of these is to detail the reason why you are terminating the contract of an employee.
The reason has to be detailed in the document for any legal consideration. Another piece of information that needs to be included in the termination letter is the receipt of the company property. Furthermore, it is a principle that you need to give an employee a proposed time when their services will no longer be needed.
Finally, you must learn the relevant terms required to legally terminate an employee’s contract before proceeding with the termination.
How to Write a Termination Letter
The formal document detailing the termination of an employee has to follow some specific guidelines to avoid any issues in the future.
Therefore, we will look at the following guidelines to be included:
Notify the employee
If you are to terminate any employee’s contract, you need to specify the date when the expected termination will commence before it happens. This will help the employee mentally and physically prepare for the termination.
State the reason(s)
You need to also state in clear terms what caused the termination of the employee’s contract. Do not beat about the bush, but explain what happened and how it led to the conclusion of termination in clear terms.
Explain their compensation and benefits going forward
In order to maintain a solid reputation, it is necessary to visit the unpaid leaves, severance pay promises, and any other salary that has not been paid in the termination letter.
Notify them of any company property they must return
Let the employee return any company item that has been with them. Sate that any company phone, ID card, or document has to be returned on or before a state date.
Remind them of signed agreements
It is easy for employees to forget the non-disclosure agreements that they might have signed in the past. You need to remind them of these documents that have different provisions in the contract termination letter.
Include HR contact information
In any case, where the employee needs clarification about specific issues or has complaints, you can leave the HR contact information before signing off on the termination letter.
Employment Termination Letter Sample
Depending on the type of termination letter you want to draft for the employee, we have some samples that will be good for you to look at. However, before that, UK employers must understand some bit of information. As a result of the devastating effects of COVID, the UK government has been reimbursing employees’ wages.
However, only a percentage of their wages is reimbursed by the government, while the employers pay 20%. For each employee, the UK government has capped the reimbursement of a maximum of £1,875. Employers, for each employee, therefore, need to tag their employees as furloughed to be eligible.
On the other hand, employers in Australia can afford to stand down an employee, which in other terms means to let someone go. This is based on the issue of COVID and how it has affected the business of many employers. Another critical aspect of the Australian government proposition is that the employer can let the employee go without pay. However, both the employer and the employee can agree about yearly pay or any type of financial compensation.
Following are some employment termination letter samples:
Termination letter sample due to bad performance
[Date]
Dear [Name],
This letter is to inform you that your employment with [Company Name] has been terminated, with effect from [Date].
We have concluded that your performance does not meet the requirements for this job position. After the general meeting of all staff members from different branches last year, your supervisor brought to our notice that you needed some improvement in certain areas. The following week, we provided a training workshop to enhance your skills. However, reviewing your performance from then till now has shown not much sign of an improvement. Furthermore, your supervisor had a series of meetings with you leading up to this to improve your performance. Therefore, it is clear that you are not consistent with the responsibilities needed for this job position.
Please return the company laptop and phone.
If you have any questions, you can contact [Name and number]
Regards
[Name]
Termination letter due to lousy attendance
[Date]
Dear [Name],
We have received several complaints about your tardiness and how it affects others’ creation of content. Since you handle the social media aspect of the content creation, work has to be done at a certain time, and with your tardiness; there is always a delay from your end. This cannot continue to happen with the tight schedule we are currently running. Furthermore, the late coming without any prior notice or calls to inform other team members so they can work on extra content until you get back is absent.
As much as you have been of great value to the company, we cannot continue to turn a blind eye to the issues that have been raised. You no longer meet up with the responsibilities required of you for this job position.
Thank you for your great service.
Please return the company laptop and phone.
If you have any questions, you can contact [Name and number]
Regards
[Name]
Termination template due to staff reduction
[Date]
Dear [Name],
With the issues of finances currently plaguing [Company name], it has been difficult trying to cope with these struggles. The number of options we have explored is too much to count with the new introduction of new marketing strategies, social media advertising, and other content creation methods, all to no avail.
Unfortunately, we have realized that we may not keep up with some of our promises to you with the constraints we are currently battling. Therefore, it is with utmost regret that your position is one that we will have to remove.
In a few days, the HR representative will call you in for a meeting. Here we will give you all the details of the separation benefits and other forms of assistance that we will offer you. But, more importantly, we will also provide information about other companies that you can work in.
Please accept our gratitude for your efforts while working at [Company name].
Sincerely,
[Name]
Other Types of Termination Letters
Following are some other types of termination letters:
Lease termination letter
One of the differences between this type of letter and the highlighted ones is the “Cure” period. This type of letter is used to cancel a lease when the tenant or the landlord violates a part of the agreement. Most times, the tenant or the landlord is given a period to try to resolve the issues.
There are two types of lease termination letters, notice to quit, which is for the tenant. In any case, he or she violates the agreement. It is issued by the landlord. The other type is (Early) Lease Termination Letter which can be used by either party to terminate the agreement.
Here is a sample of a lease termination letter issued by a landlord to a tenant over nonpayment of rent:
Notice to quit or vacate for non-payment
To: _________________________________________________________
All residents (tenants and subtenants) in possession and all other in possession
The premises herein referred to is located in the City of ______________,
County of ______ State of ________, Zip Code _ designated by the number and street as _______________________________
Apt.. In accordance with your lease agreement signed on the day of _________, 20_____ and the laws in the State of _________ WITHIN ____ () DAYS after service on you of this notice, you are hereby required to pay to the undersigned or __________________ an authorized agent, the rent of the premises hereinafter described, of which you now hold possession amounting to the sum of: __________________ Dollars ($______________________) enumerated as follows:
$________________ Due from __, 20____ To __, 20____
or quit and deliver up the possession of the premises.
YOU ARE ALSO NOTIFIED THAT the owner/landlord has chosen to declare that your lease or rental arrangement under which you have possession of the above-described premises has been forfeited. Suppose you fail to perform or otherwise comply. In that case, we will take legal action to recover rent and possession of the premises, which will result in a judgment against you, which will include costs and necessary disbursements, as well as any statutory damages that may be available under the law for such unlawful detention.
Landlord/Agent Signature _______________
CERTIFICATE OF SERVICE
I certify that on the _ day of ____________, 20_____ I served this notice to
______________ by
☐ – delivering it personally to the person in possession.
☐ – delivering it on the premises to a member of his/her family or household or an employee of suitable age and discretion with a request that it be delivered to the person in possession.
☐ – first-class mail addressed to the person in possession.
Signature _______________
Contract termination letter
This letter can be issued by both parties, whether the employee or the employer. Although anyone can terminate such a contract, the letter will state the other party’s compensation as the contract was terminated before a set date.
Furthermore, the termination of the contract in the organization does not affect the settlement of disputes in the contract. Plus, the termination also does not include damages for poor or non-performance of an employee. It is also important for the employer to understand that the employee or the aggrieved party can feel there needs to be restitution, whether in kind or some form of allowance. Therefore, the law allows the employer to either pay in kind or offer some form of allowance upon the termination of the contract. However, if the contract had been extended before the termination letter was given, the restitution would be given or paid for the employee’s working period.
Sample
[Date]
Dear [Name],
This is to inform you that your employment with [Company name] will end as of [Date], and this decision is in its finality.
Once you sign the released documents, we will issue you [Amount] as severance pay. However, you will still be able to collect your paycheck for the end of the month.
Your health benefit will still be in use until 90 days after your contract termination.
Please return the company laptop and phone.
If you have any questions, you can contact [Name and number]
Regards
[Name]
Termination of services letter
This is a letter issued to employees or contractors to signal the end of their services to a company. Employers need to read the terms and conditions of their agreement carefully. This will help you avoid losing to a service provider who uses for damages after you breached the contract. Hence, take precautions by going over the agreement thoroughly.
Additionally, if you are looking to terminate a service contract, you should have another service provider so that your business does not suffer. It would be best if you settled everything that has to do with the agreement with the new service provider before ending ties with the old one.
Before you decide to terminate a service contract, look at the basis for this reasoning.
For example:
If it is a performance problem, you can contact the service provider and work things out before issues escalate.
This is preferable and less costly in ensuring your business continues to run smoothly.
Sample
[Date]
Dear [Name],
We sadly inform you that your employment with us will come to an end on [Date]. Therefore, please regard the Date as mentioned above to be your final day of employment. This is done in accordance with your contract’s minimum notice time requirements.
You will also be paid [Amount] as stated in your contract, issued to you on [Date]. This payment will be given to you on the last day of your service to the company.
We want to commend you for your service and hope for the best in your future endeavors.
Please return any company material.
If you have any questions, you can contact [Name and number]
Regards
[Name]
Tips for Writing Employee Termination Letter
Now that we have seen some different employee termination letters, let us look at some tips you need to know:
- First, ensure that you consult a lawyer when you are thinking of terminating an employee’s contract. This is because different principles apply depending on the country. Therefore, there are some rules that you need to be familiar with.
- Secondly, discuss with the employee supervisor or manager and agree on the last day for the employee. Some employers prefer to have a send-off party, again heavily dependent on the nature of the dismissal. It is, therefore, important to discuss beforehand with their supervisor.
- Thirdly, acquaint yourself with all the necessary guidelines post-termination letters to avoid future legal issues with the employee.
- Finally, sound professional and sensitive regardless of the nature of the dismissal. You can use our guide to tailor your employee termination letter.
Frequently Asked Questions
Here are the necessary steps in writing a termination letter to an employee,
First, add the employee’s name, ID number, the position the person holds, and the department.
The next thing to do is to add the manager’s name that is in charge of the termination process.
Next is to add the benefits that the employee seeks to gain.
Add all the company items and properties that the employee has to return and include the date when they have to be returned.
Remind the employee of any legal document they have signed in the past and ensure that you seek legal counsel on writing the letter.
Employers issue employee termination letters out of respect and for posterity’s sake. In addition, it helps to uphold the company’s reputation.
You can have a written document detailing the cause of the termination. On some other occasions, employers have one-on-one discussions with the employees.
Inability to meet up job requirements.
Redundancy
Bad behavior
Personality clash
Breach of contract
The termination still stands regardless of the employee’s signature.
Depending on the laws governing the company, the duration might differ. However, employers are expected to give their employees a 30 – 60 days period to prepare for termination.
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