Employers or companies use termination of employment letters to terminate employees due to their poor performance and disciplinary issues. Terminating toxic employees is important as they affect the overall company’s environment and the morale of other employees.
Table of Contents
- 1 What is a termination of employment letter?
- 2 Different types of termination letters:
- 2.1 Employment termination letter for probationary employee
- 2.2 Immediate termination letter to the employee
- 2.3 Employee termination letter due to poor performance
- 2.4 Termination letter of employee benefits
- 2.5 Employee termination letter due to prolonged absence
- 2.6 Employee termination letter due to redundancy
- 2.7 Employee termination letter due to business needs
- 2.8 Employee termination letter for the infringement of company rules
- 3 The significance of the termination letter:
- 4 When do you need an employee termination letter?
- 5 What information you should include in a termination letter?
- 6 Key points regarding the letter of termination:
- 7 Some tips for writing a termination letter:
- 8 Faqs (Frequently Asked Questions)
What is a termination of employment letter?
A termination of employment letter is an official document given to the employee to inform them that they are being dismissed from their job. This written document officially declares the termination of employment. The letter outlines the reason for termination, the effective date, and other relevant details.
Additionally, the termination letter should be well-written as it helps you in ending things amicably with your employees. Some other names of this letter are;
- Pink slip
- Letter of termination
- Contract termination letter
- Letter of separation
- Notice of termination of employment
Different types of termination letters:
Let us discuss below the different types of termination letters;
Employment termination letter for probationary employee
Employers hire employees on probation for the initial few months typically for 90 days or three months. However, it may vary from company to company. If the employee doesn’t fall on the company’s expectations and their performance isn’t satisfactory then this type of termination letter send to them.
Immediate termination letter to the employee
An immediate termination letter to the employee is the basic type of employee termination letter. It contains the primary details which tell the employee about their termination.
Employee termination letter due to poor performance
Non-performance can be costly for a company after the successful hire of an employee. According to the company’s requirements, you can try to train the employee and develop their skills. But, if the employee continues poor performance then you can send this termination letter.
Termination letter of employee benefits
This type of termination letter is sent to employees to tell them about the termination of their employee benefits. It contains the reasons for benefits termination and the effective date.
Employee termination letter due to prolonged absence
Employees receive this termination letter when they have gone on an unexplained prolonged absence and are uncontactable as well as there is no sign of their returning to the company. Such type of behavior is highly unacceptable according to any company rule.
Employee termination letter due to redundancy
An employee whose services are deemed redundant receives this employee termination letter.
Employee termination letter due to business needs
Because of some factors such as downsizing, restructuring, or economic difficulties company has to let go of employees. In such a case, the company has to give proper notice and compensation according to legal requirements.
Employee termination letter for the infringement of company rules
A company sends this type of termination letter to employees when they violate the established policies, procedures, and regulations within a company. This type of termination occurs due to unacceptable behaviors which include theft, harassment, substance abuse, and insubordination. This letter makes sure that the company remains productive and safe.
The significance of the termination letter:
A termination letter stands out whenever the need arises. You just have to make it effective and leave no room for doubt and misinterpretation. This letter can be used to point out discrepancies or unfair employment practices in case the employee thinks they have been unfairly terminated. Other than legal issues, a termination letter is an effective way to end things with your employees amicably. A well-drafted termination letter provides all important details relevant to the termination including;
- The reason for termination
- When it takes effect
- Final compensation
When do you need an employee termination letter?
Let us discuss below the cases that can result in employees getting fired;
An employee can’t perform the job
On training employees, employers invest a lot of money. If after being provided with training and coaching, employees cannot do the job properly and are incompetent, this means that they should be terminated. Some companies often provide leverage. They also make decisions to put the employee into different roles and modify their work requirement in hope of resolving the issue. It is time to let the employee go instead of wasting money if they are still unable to perform the task seamlessly.
To the culture of the organization, an employee can’t adjust
All employees ideally must be adjustable and fit in the environment of the company. A good employee makes them able to adjust to a diverse environment, approaches and welcomes all types of thoughts. They have knowledge of how to be adjustable and make the business benefit in every aspect. However, some employees don’t share similar values. It is time to fire the employee if they cannot adapt to the culture of your organization or there are signs that they cannot fit in.
An employee breaches the company’s code of conduct
Every organization has specific rules and regulations that their employees have to follow. Under the code of conduct of the firm, employees must act ethically. This indicates that they have to build relationships with customers according to policy. Also, they have to treat each and every co-worker respectfully and equally. You would be required to terminate the employee instantly in case the employee displays any of the following unethical acts;
- Bullies or harasses a coworker.
- Accepting gifts that exceed or do not come under the gift policy guidelines.
- Trying to bribe or accepts a bribe from a vendor.
- In case, the employee doesn’t work most of the time and spends most of his time on the computer to shop and performing other things that have no concern with a business’ growth.
For theft, an employee is found responsible
Any employees don’t have any right on a company’s property. But, there are specific employees that steal from employers. If they are found responsible for the theft, employers have all the authority to punish the employee, whether in the form of termination or legal proceedings. Therefore, companies make sure to keep checks so that they can grab them quickly. This includes reconciling statements and regular audits.
An employee doesn’t keep commitments
It is the responsibility of the employees to keep their commitments as they have both small and big commitments to the organization. An employee has to make sure that they show up for work in time or finish the project quickly. Furthermore, if the good employee is unable to perform the tasks on time, then they will always keep their boss updated and request them to extend the due date. But, in case, an employee does not do that and keeps their boss on the blindside then the employer should give them a letter of termination.
What information you should include in a termination letter?
Other than the reason for termination, you should also include the following information in a termination letter;
- Name of the employee
- Employee’s all basic information such as employee ID number, position, department, etc.
- Date of termination
- Termination reason
- Company property which under the use of employee
- Benefits, and severance that is given to the employee at the time of termination.
- Legal contractual
- Define employee’s final paycheck.
Key points regarding the letter of termination:
Here are the key elements regarding the letter of termination;
Name of the company and termination date
At first, the employers have to make sure the company’s name. You have to write the date of the termination in the space provided beside the name of the company. These are basic and they should be written on top of the letter.
Reason to terminate
Next, you have to write the name of the employee and give an appropriate reason for termination. The reason for termination should be really clear and obvious. The reason may be poor performance, misconduct, absenteeism and alcohol usage. You are also required to mention the warnings after mentioning the reason clearly.
Outstanding requirements
Against the name of the company, an employee may be entitled to loans and returns. In the section of the employee termination letter, you should write the details about outstanding loans. You need to provide information about the things which should be returned in case there are no loans.
Benefits
The employee will not be able to receive any benefits after or until the effective date is another most important thing that should be highlighted in the termination letter. For example, they will unable to take the benefit of causal leaves, annual leaves or vocational benefits. You should specify the date on which the employee would get the final payroll.
Health insurance coverage expiry
In the next step, give the expiry date of health coverage. It is based on the employee whether or not to keep the health insurance coverage. Employee’s other insurance coverage would get expired on the effective date besides health insurance coverage.
Amount of severance
Employers give the employee with a severance package when they are about to get terminated. This is the advantage that employee receives when they leave employment. This exchange of payment is basically made so that employee keeps details of the company confidential. Employers can give a severance package as a lump sum amount. Employers have to specify this amount in case they are giving it to the employee.
Appeal for termination
Employers can provide the right to the employee to request their termination. For instance, you can write down in this section in case an employee does not find the termination fair or consider that there could be something else done in this regard. In terms of giving employees a number of days to make their appeal, employers can give limitations to them. Furthermore, there is a requirement to add this paragraph if the employer does not want to give the right to appeal regarding termination.
Signature
Finally, the employee has to write the date, sign, and return copy of the letter to the employer. It is the duty of the organization to make sure that the signed copy is also given to the employee. While signing the letter of termination, the employee has to make sure that they have agreed to all the terms and conditions.
Some tips for writing a termination letter:
Consider the following tips while writing a termination letter;
- A termination letter is formal documentation so it should be direct and very specific. Although the letter should be precise, it must contain all relevant information. Doing so is particularly important if the employee is being terminated for cause.
- Your aim is to end the employment amicably so the letter should sound professional and direct. Ensure that everything is clear in the letter.
- Make your letter more airtight and solid by consulting with your legal department. Getting legal advice is necessary in order to make sure that the termination letter is aligned with your company’s termination policy.
- It would be recommended to have a face-to-face meeting with your employees before sending them the termination notice. This may add human respect to the termination process.
Faqs (Frequently Asked Questions)
Here are a few things that you shouldn’t say in a termination meeting;
1- Don’t say that it is also hard for you to terminate him/her. This is because it seems you are self-centered and insensitive.
2- Don’t say that you do not agree with it it’s just a company decision. Once the company made the decision then it’s your duty to inform your employer.
3- Don’t say that company will pay your final payment in some days. Because companies usually pay the employee on the day of termination.
4- Don’t say that your regular complaints force the company to question your sincerity to the company.
5- Don’t say that he/she told other co-workers what you were making and n this way he/she violates the company rules.
6- Don’t say the employee that you don’t have any specific reason for termination. Ensures that all the reasons you told the employee are accurate and supportable.
7- Don’t say that you are hiring fresh employees for the company.
You should say the following things at a termination meeting;
Firstly, you should give sufficient reasons for termination to the employee. You have to give a reasonable explanation.
Inform the employee that your decision of termination is final.
Also gives an employee a chance to speak. Be humble and polite during the meeting.
Defines the benefits that the company is giving at the time of termination such as vacation pay, separation pay, life insurance benefits, etc.
Ask the employee to return the things that are given to him by a company such as keys, company car, company credit cards, etc. You can also assign him a specific date to return all these things.
An employee termination acceptance letter is a path to end your agreement relationship with the employer in a noble and professional manner. It helps you to maintain a professional relationship with the company. In writing the acceptance letter, you can follow the following tips;
1- You should make sure that you are communicating with the accurate and proper authorities.
2- You must provide the basic contact details of both parties clearly.
3- A letter must contain formal, polite, and decent language.
4- Don’t show that you are frustrated and disappointed.
5- At the end of the letter, you have to be thankful to the company for sincere gratitude.
6- Before submitting it, proofread it thoroughly.
However, writing an employee termination acceptance letter is not as difficult as you thought. You just have to maintain a positive outlook.
No, it isn’t mandatory to give an employee a termination letter as well as there is no federal law regarding them.
It would be better to inform an employee about termination by sending them a written notification.
These are as follows;
1- Misconduct
2- Performance or capability issues
3- Redundancy
4- Breach of a statutory restriction
No, it isn’t a requirement and also it does not affect the termination.
