At some point in the workplace, employers have to fire employees. Termination of employment is a necessary part of any business. Our free employment termination letter can help you simplify this process. It will guide you on everything you need to consider when structuring a termination letter, eliminating any risks of disputes and misunderstandings.
Create your own letter of dismissal today using our comprehensive termination letter template.
What is an Employment Termination Letter?
An employment termination letter is a document from an employer to an employee that informs the latter that their job is ending. This formal notice must be clear and concise, letting the employee discover why they are being dismissed from their role. An employment termination letter is also known as:
- A pink letter
- Notice of termination of employment
- A letter to fire an employee
- A letter of dismissal
How to Write a Termination of Employment Letter?
Firing an employee is a difficult thing for most employers. It’s a delicate process that has to be handled carefully so that employees don’t feel degraded. The tone of your employment termination letter should be formal and firm.
Here’s how to write a termination letter:
1. Add Employee Information
An employment termination letter should include the employee’s full name, job title, employee ID, address, and the name of the contact person in charge of termination.
2. Inform Them About the Termination Date
The date when a termination is drafted and when it takes effect will help avoid confusion when firing an employee. Notifying an employee about the termination date makes the handover process easier.
3. Explain Why They Are Being Dismissed
It’s advisable to include the reasons or events that led to an employee’s dismissal. If there are previous verbal or written warnings, you should incorporate them in the employment termination letter. Make sure you take into account any relevant evidence that supports the dismissal to avoid confusion.
4. Include Any Benefits Owed to Them
Always clarify the compensation and benefits an employee will receive during dismissal. A termination of employment letter template can include details regarding one’s final paycheck, severance pay, 401(k), unused leave days, and health benefits.
5. Return of Company Property
Highlight any company property the employee is expected to return to their line manager or the HR department, such as a laptop, company car, badge, keys, or phone.
6. Spotlight All Legal Agreements
It’s critical to remind an employee about all documents they signed during onboarding or the course of their employment, such as non-disclosure and non-compete agreements.
7. Add a Signature Section
The person in charge of the termination — employer or HR rep — should sign the termination letter right after the word “Sincerely.”
Alternatively, you can simplify this entire process by using our contract termination letter builder.
When Are Employment Termination Letters Used?
The main objective of a termination letter is to notify an employee that they’ve been fired. Organizations also use termination letters as part of HR’s standard operating procedures, signifying the end of employment contracts. These letters are used to end fixed-term business contracts or engagements when a clear conflict of interest occurs.
Organizations can use termination letters with or without cause. If an employee violates a company’s code of conduct by stealing company property, harassing employees, or absconding duty, such actions may warrant an immediate termination letter to the offending employee. A contract termination letter template can also be used for business reasons like downsizing staff.
Other Things to Consider in an Employment Termination Letter
- Don’t indulge in unrelated issues
- Watch out for any crucial omissions
- Consider using the company letterhead
- Don’t forget about the minimum notice period
- Be professional, courteous, honest, and unbiased
