A termination letter is a formal document or a formal letter given by an employer to an employee at the time of termination, often used as an official and authorized statement to the employee, which keeps a record of their termination. It is an essential part of the termination process.
A letter of termination typically includes information about the reason for dismissal, any benefits or severance pay they may have received, the date of their last pay check, and other pertinent information about the termination.
In general, there can be the following reasons for the termination of an employee:
- Attendance issues, like frequent absence or chronic tardiness.
- Sexual harassment or other discriminatory behavior in workplace.
- Violation of the company’s rules, regulations and policy.
- Physical violence or threat against other employees of the company.
- Incompetence, low productivity, low performance or poor quality of work.
- Theft or other criminal behavior in the workplace.
- Insubordination and related issues such as dishonesty or breaking company rules.
- Lack of cooperation and progressive discipline.
- Leaking the company’s private information to other.
- Lack of interest in job roles.
Sample Of A Termination Letter
Dear [employee name]
This letter is to formally notify you that your employment with [company’s name] stands terminated effective today [date of termination].
The company decided to terminate this employment because of the following reason: [mention the reason of the termination].
This decision if final and irreversible.
You may be entitled to the following benefits:
[list the compensation and benefits available to the employees and specify about their expiration of their health policy].
Kindly return [company’s property] on or before the date mentioned.
Please keep note that the following agreements should be continued to be applied even after you leave the company. [list the agreements or attach the file of agreements].
Please contact the HR[name, email address, phone number of HR], if any query.
Elements of termination letter
While writing a termination letter a professional tone should be maintained throughout the letter and be honest and accurate. The content should be clear, concise and relevant. A termination letter includes the following important points:
- Date: The date should be there on which the letter is drafted, either at the left or right top corner of the letter.
- Company’s name and address: Company’s address and name should be mentioned in the termination letter.
- Salutation: A professional or formal salutation should be mentioned for the employee.
- Formal statement stating termination: A clear statement should be stated that the company is terminating the services of the employee and it could start with “I am sorry to inform you…” or “This letter is to formally notify you that…”.
- Date of termination: The date on which the employee is being terminated, should be mentioned in the termination letter.
- Reasons of termination: Reason for the termination should be mentioned in the termination letter. An employee should also be aware of his or her termination.
- Settlement details: The employee should be explained about the expiry of the benefits and policies if they are covered under any policy. They should be informed that when and from where they can collect their final certificates.
- Request for returning company’s property: An employee should be requested to return the company’s property, if employee is in possession of any company property, like godown keys, mobile or laptop, etc. and remind them of binding agreements and can attach a copy of the agreements proof.
- HR contacts details: Int the contact details if the HR should be mentioned in the termination letter, so that if employee has any query can contact the HR.
- Conclusion and sign the letter: Termination letter can be concluded with a positive conclusion statement and a formal closing salutation. It should be positively signed after the print out.
Types of termination
• Voluntary termination: In this type of termination an employee wants to leave the company and took the initiative to leave the company, which can be for many professional or personal reasons.
• Involuntary termination: In this type of termination an employer wants the employee to leave the company, which can be of the reasons mentioned above.
• Employment at will: In this type of termination an employer can fire an employee anytime, and at anyplace, an employer has no need to answer the employee for his or her termination.
• Mutual termination: In this type of termination, the employer and employee mutually arise at the conclusion that they are not a good fit and the employee gets the termination.
Steps to terminate an employee
There are 5 steps to be followed while terminating an employee:
- Identify and make a document of the issues:
The manager of a company should identify the issue of the termination and should make a document for the same as soon as possible. So that the further process may take place.
- Coach the employee to rectify their issues:
An employee should be guided and counseled for the first time, so that he could rectify his or her issues, which includes the face-to-face conversation to make the employee understand his issues.
- Create a performance improvement plan for the employee:
This plan will make the employee understand about the unacceptable behaviors and what are acceptable behaviors. It can take 30 to 90 days. This needs to be on the specific date decided by the manager and should have a regular meeting with the manager to get the feedback.
- Terminate the employee:
Take the employee to the office privately and where you both can’t be overheard and had a face-to-face conversation. Be direct and to the point with the employee.
- Have HR conduct an exit interview:
An exit interview should be conducted at the time of termination like they should be confirmed that the secrets should be remain inside the company only or the other important questions or information required at the time of termination.
This is all about the termination of the employees and the letter of termination that is given to the employee at the time of the termination.