Firing employees could be the most difficult aspect for any HR or management supervisor. It's the inverse side of the hiring process and of course more challenging. The fact is that jobs and their criteria change throughout time and supervisors need to work accordingly.
Undoubtedly, there’s both a right and wrong approach to firing an employee. It is essential to choose the right method to end professional relationships on a positive note. Also, it associates with legal aspects to avoid any further issues.
Termination of Employment Letter— that’s exactly what you need to manage this tricky situation. Moreover, verbally firing someone isn't a solid enough justification. As a reason, it's critical to have a written document to keep all parties on the same page.
Today’s guide will help you to learn and understand how you can terminate an employee from the company in the right manner. Going by the book would assist you to safeguard the business reputation and relationships with employees. Let’s take a look at the content that we’ll cover ahead:
- What’s Employment Termination Letter
- Understanding Employer Termination Letter
- Significance of Termination of Employment Letter
- Use of Employment Termination Letter
- Types of Employment Termination Letter
- Elements of Employment Termination Letter
- Major Steps to Write an Employment Termination Letter
- Pro-Tips for Writing an Employment Termination Letter
- Pointers to Follow in Employment Termination Letter
- Employment Termination Letter Template
- Examples of Employment Termination Letter
- Frequently Asked Questions (FAQs) on Employment Termination Letter
- How Deskera Can Assist You
What’s Employment Termination Letter?
An employee termination letter is a document that informs an employee that they have been dismissed from their employment. Further, HR and managers provide termination letters to employees that notify employees about their dismissal.
This written form will simply include predefined sections listing various basic information. It includes the employee's identity, name, or title, received compensation or benefits, and so on.
Additionally, it also includes a section to contact the employee specifically with the grounds for termination.
The major behind employment termination letter is that— it safeguards your organization from legal action— if it emerges.
Moreover, a professional and precise termination letter helps to assist the business ’ reputation intact, and it's normally kept with the business's records for a set amount of time following termination.
Regardless of the status of the connection between the Employer and the employee, it is highly advisable to provide a termination letter.
Note: Few other names of Employment Termination Letters are— "letter of separation," "a notice of termination of employment" or "contract termination letter."
Major Reasons for Getting Fired
There are certain reasons why a company terminates or dismisses an employee from the company.
Following we have mentioned some major reasons why a company terminates an employee from their jobs. Check out:
- Company Rules or Policy Violations
- Falsifying company records at work
- Use of drugs or alcohol at office premises
- Improper use of company's property
- Damaging, misappropriation, or theft of firm property
- Frequent Absentees
- Verbal abuse and so on.
Understanding Employer Termination Letter
A termination letter is a letter sent to an employee that documents the individual's dismissal. While termination letters aren't needed by federal law, certain states do have notice obligations, such as the ones listed below:
- Employers in Missouri, Minnesota, and Nebraska are required to provide information and documents to some workers upon demand.
- Employers in Louisiana, Georgia, and Tennessee are required to utilize state-specific termination paperwork.
- Written notice is required in Connecticut, California, and New York.
- Supervisors or Employers in Arizona and Illinois are required to provide dismissed employees with documents from the labor department or employment security.
Employment termination letters are essential to conflict management tools, whether or not your state needs them.
Moreover, they serve as a guiding map for the termination conference and provide vital information for the employee to consider afterward. In the event of a disagreement, they can also provide crucial documentation.
Significance of Termination of Employment Letter
The significance of termination letters lies in the fact that it helps assist your organization to retain a favorable reputation, showcase professionalism, and provide a legal record of events.
Furthermore, providing employees a termination letter is a more considerate and respectful manner of dismissing them. Moreover, it allows employees to take time to deal with external circumstances that will alter as a consequence of their instant unemployment.
In addition, employment termination letters also ensure that employees are fully informed about the circumstances regarding their discharge.
As an employer, it is important to maintain respect for an employee, and assisting them each and every step is critical. It will eventually help to have a better relationship between employers and employees.
Employers can discontinue employment at any moment for any cause as long as the termination is not discriminatory and there is no contract or union contract in effect.
Moreover, a document of termination will certify the dismissal, offer a receipt of corporate property, and explicitly explain the effective date of discontinuation in the event of a legal battle.
Use of Employment Termination Letter
It is important for employers to let someone know about their job’s dismissal with a respectful and professional approach. For that, employers use termination of employment letters.
Moreover, the termination of employment letter is a document for both the employer and the employee. And, it could be used to protect a company legally if both parties sign and date it.
Also, it's also handy for laid-off workers because they can use it to file for unemployment benefits.
Furthermore, employers use termination of employment letters to summaries all events that led up to dismissal and to clarify any post-termination agreements.
Although, the Fair Labor Standards Act does not require an employer to provide a letter of termination or to notify an employee of their dismissal in advance. However, it is required if the employee is a member of a union or collective bargaining agreement.
On a case-by-case basis, some businesses may be required to provide advance warnings during massive layoffs and large corporate shutdowns.
Types of Employment Termination Letter
Following we have discussed some general types of employment termination letters adopted by companies. Let’s discuss:
With a Cause:
This document is for terminating an employee's employment due to poor performance or conduct. This is dismissal with cause, for example, if an individual breaks business rules.
When an employee engages in unacceptable behavior, it's important to keep track of it so that you have a good basis to terminate them.
Without a Cause:
A corporation may be forced to fire an employee due to layoffs or budget cuts. This form of termination is referred to as "without reason" because it is not due to the employee's fault.
However, this is an undesirable circumstance, and it is critical to have open lines of communication with staff.
End of their Contract:
You can issue the employee a termination letter after their work contract expires. This type of invoice could be used for contractors, freelancers, or third-party suppliers with whom your company does business. The termination letter must relate to or include the underlying employment contract.
Elements of Employment Termination Letter
As it is an official document, you must create it in this format. After you've completed composing, have it reviewed by your legal team before handing it over to the fired employee to confirm that everything is in order.
Moreover, you may need to include more important information in addition to what we have listed, depending on the size of the organization and other variables.
Following we have listed major elements that you must add in the termination of employment letter. Check out:
- Employees Name or title
- Employee's company's name
- The effective date of Termination
- Supervisor Name who made the dismissal decision.
- Generating date of the termination letter; the day the termination takes effect; the dates of warning and reviews, and whether they were given verbally, in writing, or both; and the date the termination takes effect.
Reason for Employees Termination
- Layoffs are made as a result of the company's financial situation and/or reorganization.
- Verbal Abuse
- Misconduct of behavior
- Ineffective performance
- The reason for the termination (without cause, with cause, end of contract)
- Excessive tardiness is a problem.
- Frequent Absenteeism
Benefit/Compensation or Paycheck Information
- The date on which the departing employee will be compensated
- The procedure for returning corporate property that was utilized during the employee's employment.
- If the final paycheck will be delivered in person, mailed, or deposited electronically
- How will vacation, sick days, and other benefits be paid out if they have been accrued?
- How will retirement savings or other business monies be distributed?
- The day on which your health benefits will expire.
- Procedures for obtaining health insurance through the COBRA statute, severance pay, and other means.
- Laptops, vehicles, ID cards, mobile phones, swipe cards, and other company property must be turned over.
- Non-disclosure, non-compete, and other legal agreements are discussed in detail.
- Include contact information where employees can discuss their concerns.
Certainly, any of the points we've made can be left out of your letter if they aren't applicable.
Major Steps to Write an Employment Termination Letter
Following we have discussed some major steps on how you can draft an employment termination letter. Let’s learn:
Step 1: Notifying Employees
A notice of termination begins by telling the employee of the termination of their contract and the date on which it will take effect. Businesses must provide employees with notice and a set length of time before their employment expires.
Step 2: Providing Relevant Reasons
In your termination letter, explain why an employee was fired. Employees might be fired for a variety of reasons, including poor performance, contract obligations, or cutbacks within their sector or business.
When drafting a termination of employment letter, it's critical to be kind and straightforward, as well as to include specifics so that the individual recognizes why they're being fired.
To avoid claims of prejudice, make sure you specify your reasons for the firing.
Step 3: Make the Employees Aware of their Benefits
After you've explained why you need to terminate their contract, let them know how their perks are going.
Furthermore, provide additional data about how they can get a copy of their most recent pay stub. Put the details in the letter if you're providing a severance package or any other types of compensation.
Step 4: Provide Guidance to Employees to Return Company Property
Employers may supply computers, cell phones, keys, or a uniform to employees in some instances. You may need to notify employees to return this office property after their job expires because they are business property. Give them instructions on how and when they should return these items.
Step 5: Contracts of Employment as a Reference
When a person is hired, they are usually required to sign a contract.
Non-disclosure agreements and legal documents outlining the company's and employees' rights are among the contracts. It's critical to include these papers in the termination letter so that the employee is informed of their legal obligations.
Step 6: Provide the Human Resources Representative's Contact Details
Whenever you sign your letter, tell employees to contact a human resources representative. This is useful if the employee has any concerns regarding their dismissal. It's also a show of respect for employees that the corporation is concerned about their issues.
Pro-Tips for Writing an Employment Termination Letter
Below we have discussed pro-tips that you should implement for writing termination of employment letter. Let’s check:
- Before dismissing an employee, double-check that you have the report and all of the necessary documentation
- Remember to go over the employee policy/contract to ensure you're on better ground when terminating the employee
- If the reasons for the termination aren't listed on the employee policy, don't do it because it could lead to a lawsuit
- Keep the meeting to a minimal level
- While terminating an employee, you must protect the employee's respect.
- Arrange the discussion at the end of the working day so that they are not humiliated when they are fired
- Allow them a reasonable amount of time to improve their skills before dismissing them. Inform them that if they do not improve, they will be fired from their employment
- Before beginning the termination procedure, enlist the help of a human resources manager or a trustworthy employee as a witness
- Keep your attention on the grounds for termination, avoid mentioning unrelated instances, and remain objective
- Make use of company letterhead and write the letter in a proper business letter format that is devoid of errors and typos
- Before beginning the procedure and preparing the letter, review the legal requirements and the specific reasons for termination
- Maintain a respectful, professional, and empathic tone throughout the letter, resulting in a document that is acceptable to anyone who reads it
- Before delivering or mailing the letter to the employee, get it reviewed by Human Resources or the legal department
- Compile any relevant documents, such as documentation of counseling and coaching meetings, an employment contract, a non-disclosure agreement, an independent contractor agreement, an employee handbook, and any other written evidence showing the employer tried to prevent the necessity for the termination
Pointers to Follow in Employment Termination Letter
Following we have listed some points that you must follow in the employment termination letter. Check out:
- Always act in a professional manner. Even if you have a friendly relationship with the employee, avoid using casual or informal language. In this type of documentation, it's vital to keep a professional tone.
- Be genuine. Do not provide any material that is false or overstated. A termination letter should be a true account of what happened.
- Keep it brief. Remove any extraneous information. You should include content that is directly linked to the employee's dismissal.
Employment Termination Letter Template
For your company's termination letters, you can use the following template. Make sure to adjust it to your individual situation.
Examples of Employment Termination Letter
Following we have showcased the examples of termination of employment letters for your reference. Have a look:
Example #1: With a Cause:
This illustration of a termination letter stems from unexcused absences from work, which are against corporate policy:
March 23, 2022
Dear Joseph Williams,
The purpose of this letter is to tell you that your contract with Information And technology will be discontinued as of March 23, 2022.
We have decided to discontinue your employment at Information and technology for the following reasons:
As of January 28, 2022, you missed work without prior approval or notice of your absence. We issued you a formal written warning at this time, explaining that your absence was a breach of our company's rules and policies.
On February 24, 2022, you were missing from work again, without informing a supervisor of your leave. We issued a second warning letter for unapproved absences, and we informed you that a third offense will result in your termination.
On March 4, 2022, you were unavailable without authorization resulting in your dismissal from our organization.
Your final paycheck will be mailed to your address. Your health coverage benefits are valid for 60 days after your March 23 termination date.
We request that you deliver your corporate laptop and uniform to your supervisor by March 23rd at the end of the day.
Please contact Alice Clark, our human resources manager, at 63452345 or email@example.com if you have any queries about your compensation, benefits, or business policy.
Example#2: Without a Cause:
Following we have showcased an illustration of termination results from company downsizing:
February 1, 2022
Dear Tom Parker,
Your employment with Sun's Corporation will terminate on March 30, 2022, as stated in this letter.
We are sorry to inform you that Sun's Corporation has been experiencing financial difficulties as a result of a reduction in sales in recent months. We've tried everything just to keep the corporation budget afloat, but we've come up short, therefore we've had to slash labor costs.
We drew the conclusion that we agreed to cut our personnel by 16%. Further, we regret to notify you that your position as a software coder has been terminated as part of our cost-cutting measures. This is a definitive decision.
Your health insurance will continue to be valid for another 120 days after the termination date.
On your last day of work, kindly return your corporate mobile phone, uniform, and ID badge.
A human resources person will contact you later this week to arrange a meeting to review and discuss your perks and remuneration. If you have any further queries, please contact Jessica Blacksmith, our human resources manager. You can reach her at firstname.lastname@example.org or by calling 85467380.
We value your contribution to the Sun Corporation team and wish you the best of luck in your future endeavors.
Frequently Asked Questions (FAQs) on Employment Termination Letter
Following we have discussed some crucial frequently asked questions (Faqs) associated with the termination of employment letter. Let’s discuss and learn in detail:
Que 1: What are the legal elements of terminating an employee that I should be aware of?
While a contract employee or an at-will employee can be fired at any moment, the employer must adhere to state and federal labor rules.
Employers are prohibited by state and federal legislation from terminating an employee's employment for discriminatory reasons (i.e., race, gender, age, gender identification, religion, national origin, the status of pregnancy, sexual orientation, disability, etc.).
If an employee believes they were unlawfully terminated by their employer, they have the right to obtain legal advice to determine the validity of the termination. If held liable for wrongful termination, an employer could incur penalties, sanctions, or fines.
Que 2: What voice should you use in a letter terminating an employee?
When writing a termination letter, you should be direct and use a professional tone. Remember that this is an official document, therefore precision is essential.
In the case of good connections with the employee, the tone should be stern but sympathetic. However, if the termination is for a valid reason, we advocate simply utilizing a courteous tone.
Allow a peer to review the letter after you've finished it to ensure that the voice is appropriate.
Que 3: Is it necessary for me to produce a letter of termination of employment?
It all depends on where you live or located. While there is no federal legislation requiring an employer to provide a termination letter, several states have their own set of guidelines.
To find out what your state's requirements are, go to the Department of Labor's website.
Que 4: What should you leave out of a termination letter?
Make sure that you avoid any kind of joke, sarcasm, vagueness, or needless information/details while drafting the employment termination letter.
Moreover, it has legal worth and will provide you with legal protection in the event of a lawsuit. Make certain there is no room for errors or ambiguity of any type.
Que 5: What is the minimum notice period for a job termination?
Unless an employee is under contract or covered by a union agreement, companies are not required to give notice before terminating or laying off an employee. In that instance, the terms of the contract govern the employer-employee relationship.
Furthermore, employers with 100 or more employees are obligated to provide 60 days' notice in the event of a mass layoff or plant shutdown under the Worker Adjustment and Retraining Notification Act (WARN).
State and municipal laws may differ based on where you live, therefore you need to check with your Department of Labor to learn more about the rules and regulations in your area.
Que 6: Is there ever a time when I shouldn't issue a termination letter?
It's difficult to see yourself in that circumstance. There's no reason not to use a letter of termination from an employee that only provides the essential information and sticks to the truth.
In all cases, our termination letter template should suffice. Remove the grounds for termination from the termination email template if you're concerned.
Que 7: Is the term "discharged" synonymous with "terminated"?
The terms "discharge" and "termination" are sometimes used interchangeably, although their meanings differ when it comes to contracts.
"Discharge of a contract" signifies that the employee has fulfilled the contract's major obligations, signaling the end of the employer-employee relationship.
How Deskera Can Assist You?
As a business, you must be diligent with the employee payroll system. Deskera People allows you to conveniently manage payroll, leave, attendance, and other expenses. Generating payslips for your employees is now easy as the platform also digitizes and automates HR processes.
Finally, you have reached the end section of this detailed guide. We’ve provided some crucial points for your future reference. Let’s learn:
- An employee termination letter is a document that informs an employee that they have been dismissed from their employment.
- This written form will simply include predefined sections listing various basic information. It includes the employee's identity, name, or title, received compensation or benefits, and so on.
- Few other names of Employment Termination Letters include— "letter of separation," "a notice of termination of employment" or "contract termination letter."
- The significance of termination letters lies in the fact that it helps assist your organization to retain a favorable reputation, showcase professionalism, and provide a legal record of events.
- The termination of employment letter is a document for both the employer and the employee. And, it could be used to protect a company legally if both parties sign and date it.
- The Fair Labor Standards Act does not require an employer to provide a letter of termination or to notify an employee of their dismissal in advance. However, it is required if the employee is a member of a union or collective bargaining agreement.
- Employees might be fired for a variety of reasons, including poor performance, contract obligations, or cutbacks within their sector or business.
- You may need to notify employees to return this office property after their job expires because they are business property. Give them instructions on how and when they should return these items.
- You may need to notify employees to return this office property after their job expires because they are business property. Give them instructions on how and when they should return these items.
- Make sure that you avoid any kind of joke, sarcasm, vagueness, or needless information/details while drafting the employment termination letter.
- Employers with 100 or more employees are obligated to provide 60 days' notice in the event of a mass layoff or plant shutdown under the Worker Adjustment and Retraining Notification Act (WARN).