Letting an employee go is tough, but a well-written termination letter can prevent legal issues and misunderstandings.
An employment termination letter confirms the end of an employment relationship between an employer and an employee. It’s a written explanation ensuring everyone is on the same page about why and how the employment will end.
Whether due to performance issues, company restructuring, or the natural end of a contract, delivering this news requires professionalism, empathy, and clear communication. A termination letter is vital in this process — it acts as a formal record and helps both parties navigate an emotionally charged situation with clarity and respect.
Whether due to performance issues, company restructuring, or the natural end of a contract, delivering this news requires professionalism, empathy, and clear communication. A termination letter is vital in this process — it acts as a formal record and helps both parties navigate an emotionally charged situation with clarity and respect.
Why a termination letter matters
A termination letter is essential as it lays out all the key details, such as the reason for termination, the employee’s last working day, and any next steps required (such as returning company property or finalizing severance).
A termination letter covers both termination with cause and without cause. Termination with cause includes cases like serious misconduct, poor performance, or breaking workplace policies.
For example, if someone consistently fails to meet their goals despite receiving the necessary support or repeatedly engages in unethical behavior, a letter of termination with cause would detail these incidents to support the reason for termination.
Termination without cause, on the other hand, may happen during company restructuring, budget cuts, or the completion of a fixed-term contract or project. In these situations, a termination letter would inform the employee the termination is due to company circumstances and not their performance.
For example, if someone consistently fails to meet their goals despite receiving the necessary support or repeatedly engages in unethical behavior, a letter of termination with cause would detail these incidents to support the reason for termination.
Termination without cause, on the other hand, may happen during company restructuring, budget cuts, or the completion of a fixed-term contract or project. In these situations, a termination letter would inform the employee the termination is due to company circumstances and not their performance.
Key elements of a termination letter template
- Employee details: Start with the basics, such as the employee’s full name, department, and the date they joined the company.
- Manager/supervisor details: Identify the employee’s direct manager or supervisor who would be involved in the termination process.
- Company information: Include the company’s name and contact details to formalize the document and ensure easy reference if needed.
- Date of and reasons for termination: Clearly state the employee’s last working day and provide clear, factual reasons for the termination. Whatever the reason, ensure clarity to minimize confusion or disputes.
- Severance pay or other benefits (if applicable): Outline any severance package, unused leave payout, or continuation of benefits. Providing specifics helps the employee understand their entitlements and can ensure legal compliance.
- Return of company property: Specify what items the employee must return (e.g., laptops or access cards) and the return date to ensure you account for company assets.
- Final steps: Detail the process for receiving the last paycheck and any continuation of benefits, such as healthcare coverage or retirement contributions. Mention whom the employee should contact for questions.
Free termination letter template
Please note: This template is only intended for general usage and does not constitute professional or legal advice. To ensure your termination letter is legally compliant, consult with a qualified legal professional.
Example 1: Termination with cause
[Employee’s Full Name]
[Job Title]
[Department]
[Company Name]
[Company Address]
[Date]
Subject: Notice of termination of employment (with cause)
Dear [Employee’s Name],
We are writing to inform you that your employment with [Company Name] is terminated, effective immediately, due to [specific reason, e.g., repeated policy violations or performance issues].
This decision is based on a thorough assessment of your [conduct/behavior/performance] and made only after careful consideration for the following reasons:
- [Detailed example of the issue, e.g., consistent failure to meet performance targets despite feedback and support provided on (specific dates)].
- [Mention any prior warnings or disciplinary actions, e.g., written warning issued on (specific dates)].
Your final paycheck, including compensation for [any accrued benefits, if applicable], will be provided on [date]. Please note that this decision is final and non-negotiable; legal action may be taken if necessary.
Please return all company property, including [list items], by [deadline]. If you have questions, please contact [HR Contact Name] at [email address/phone number].
Yours Sincerely,
[Manager’s Name]
[Job Title]
Example 2: Termination without cause
[Employee’s Full Name]
[Job Title]
[Department]
[Company Name]
[Company Address]
[Date]
Subject: Notice of termination of employment (without cause)
Dear [Employee’s Name],
We regret to inform you that your position with [Company Name] will be terminated, effective [termination date]. This decision is not related to your performance but is due to [reason, e.g., company restructuring or budget constraints].
You will receive your final paycheck, including any accrued leave or overtime, on [date]. Additionally, you will receive severance pay as outlined in our company policy, totaling [amount]. Information regarding the continuation of benefits through [e.g., COBRA] will be provided separately.
Please return all company property, including [list items], by [deadline]. Should you require further assistance, feel free to reach out to [HR Contact Name] at [email/phone].
We thank you for your contributions to [Company Name] and wish you all the best in your future endeavors.
Sincerely,
[Manager’s Name]
[Job Title]
Example 3: Contract termination
[Employee’s Full Name]
[Job Title]
[Department]
[Company Name]
[Company Address]
[Date]
Subject: Confirmation of end of employment contract
Dear [Employee’s Name],
We are writing to formally notify you that your employment contract with [Company Name], dated [start date], will conclude as scheduled on [contract end date]. This marks the end of our agreement as per the terms outlined in your contract.
We want to thank you for your dedication to [specific project or company goal] during your time with us. Your final paycheck will include compensation for any unused leave or other entitlements and will be processed on [date].
Please return all company property, including [list items], by [deadline]. If you have any questions or require employment verification, please contact [HR Contact Name] at [email/phone].
Best regards,
[Manager’s Name]
[Job Title]
Example 4: Probationary period termination
[Employee’s Full Name]
[Job Title]
[Department]
[Company Name]
[Company Address]
[Date]
Subject: Notice of termination of employment during the probationary period
Dear [Employee’s Name],
We are writing to inform you that your employment with [Company Name] is terminated effective [date] due to [specific reason, e.g., repeated policy violations or performance issues].
This decision is based on a thorough assessment of your [conduct/behavior/performance] and made only after careful consideration for the following reasons:
- [Detailed example of the issue, e.g., consistent failure to meet performance targets despite feedback and support provided on (specific dates)].
- [Mention any prior warnings or disciplinary actions, e.g., written warning issued on (specific dates)].
Your final paycheck, including compensation for [specific entitlements, if applicable], will be processed on [date]. Please ensure all company property, such as [list items], is returned by [deadline].
If you have any questions or need further assistance, feel free to contact [HR Contact Name] at [email/phone].
We wish you the best in your future endeavors.
Yours Sincerely,
[Manager’s Name]
[Job Title]
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