Termination Letter to Employee [Template + Example]

Summary

• An employee termination letter is an official document given to employees to notify them that they are being let go. It should include the reason for termination, effective date, and next steps.
  

• Employee termination letters should include the reason for termination, effective date, and next steps. They should be concise, factual, and carefully written.
  

• While a termination letter is vital to the offboarding process, sometimes it is simply not enough. Most times it is essential to sit down with an employee face-to-face. 

An employee termination letter is vital to letting people go regardless of the reason. It is a written form of documentation that officially declares the termination of employment.

To check out some examples and templates, click here.

While termination letters may sound straightforward, there’s actually a lot that goes into them – and for good reason. Getting them wrong can lead to all kinds of issues for your organization down the road. So let’s take a look at some ways to get termination letters right. 

Why are termination letters important?

Short answer: to avoid legal trouble.  

A termination letter should stand in court if ever the need arises. It’s crucial to make it airtight and leave no room for doubt and misinterpretation. If an employee feels they have been unfairly terminated, the letter may be used to point out discrepancies or unfair employment practices. 

Aside from legal issues, termination letters also play a role in ending things amicably with your employees. While it should sound direct and objective, a properly curated termination letter should provide every vital detail relating to the termination, such as the reason for termination, when it takes effect, and final compensation.

What an employee termination letter should include

While terminating an employee is never a pleasant experience, you can soften the blow by doing it properly – writing a sound termination letter is a critical part of this. Here are some things that every termination letter should include:

Basic details

First, a letter should include the who, what, and when. It must clearly state that it’s for ending employment, who it is for, and when it will take effect. It also should include contact information in case the employee needs more information or has questions. 

Reason for termination

The reason for termination is at the heart of this document, and the letter should be able to clearly state why an employee is being let go. Typically, termination is warranted due to the following reasons:

• Downsizing or laying off – One of the top reasons for letting employees go is downsizing. If you’re writing a termination letter for this reason, you must explain the need to downsize and why their position is affected. 
• For cause – In some cases, employees are let go due to cause, such as violating company policies, unsatisfactory performance, misconduct, stealing or damaging company property, chronic tardiness, absenteeism, and falsifying company records. Letting go of staff for cause tends to be more complicated because, without documented proof and HR references, an employer’s cause can be called into question. It helps to consult with your legal team to ensure that you’re adhering to all relevant company policies and labor laws.
• Termination of contract – This reason is typical for freelance workers and happens when a project ends or if there’s no need for the services anymore.

Best practices for writing a termination letter 

While undoubtedly difficult for both the employee and employer, following proper termination protocol can really minimize the burden and stress felt by both parties. Here are some tips for doing just that:

Include all the necessary information

As mentioned, a termination letter is formal documentation that, if need be, should stand in court. It has to be direct and very specific. A suitable termination letter answers the following questions:

1. When will the employment officially end?
2. Why is the employee being let go? 
3. When can they expect their final paycheck, and how much will it be?
4. What will happen to their employee benefits?
5. On their end, what are the next steps they need to take (e.g., returning company property)
6. Who can they contact should they have follow-up questions?

While a termination letter should be concise, don’t hesitate to include as much relevant information as possible. This is especially important if an employee is being terminated for cause. Include information such as policies violated, a timeline of events, performance reviews, and investigation results.

For instance, if an employee is being let go for time and attendance issues, provide a record of their absenteeism or tardiness using data from a workforce management and/or HR system. 

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Use the right tone

A termination letter is a formal document, so it needs to sound professional and direct. While the goal is to end the employment amicably, the termination letter is not the place to be sarcastic, candid, or drop jokes. Instead, state the necessary information and make sure that everything is clear.

Consult your legal team

Consulting with your legal department helps termination letters be more airtight and solid. While termination letters are all routine, there’s always that risk of overlooking minute but vital details. So get legal advice and take time and go over your company’s termination policy, making sure the letter aligns with it. 

In some cases, legal advice can also help you determine if termination is really the right thing to do. For instance, you’re terminating an employee for absenteeism. Is termination the right step at this time? Did the employee receive warnings before termination? Again, your legal team can help spot these potential issues before you even send that letter and risk legal repercussions later.   

Pair it with a meeting

Before you serve the termination notice, it’s best to speak with your employees. While termination always comes with a shock, having a face-to-face meeting about it helps soften the blow. 

A conversation adds face-to-face honesty and human respect to the termination process – elements not found in a black-and-white letter. No one wants to open their email and see that they’ve been let go and their employee access revoked. It’s an unfortunate situation, but having some warning can help employees manage better.

Termination letter due to cause – Template

(Date)

Subject line: Notice of termination

Dear (employee name), 

This letter is to inform you that your employment as (name of position) at (company name) is officially terminated effective (date of termination). 

You have been terminated due to the following reasons:

(A detailed list or explanation of why you are terminating the employee. Include timelines, incident reports, investigation details, a list of policies violated, and other relevant information.)

Please surrender the following by (date):

(a list of company property endorsed to the employee)

Access to (platforms and tools) will also be revoked by (date and time). 

Please expect to receive your last pay by (date). Your final paycheck will include (salary, leave encashment, or other benefits). A detailed computation breakdown will also be provided.

In addition, keep in mind that you have signed (agreements or policies such as confidentiality agreements, NDAs, and non-compete documents). Attached are copies of said documents for your reference. 

If you have any questions, you may contact (name of company representative) at (contact details). 

Regards, 

(Name), (Position)

(Company name)

Termination letter due to cause – Example

Date: February 27, 2023

Subject line: Notice of termination

Dear Michael Smith, 

This letter is to inform you that your employment as Sales Associate at Retail Company will be officially terminated effective February 28, 2023. 

You have been terminated due to excessive tardiness. According to company policy, an employee should not exceed 7 days of coming late to work in a month. Employees are considered late when they arrive 16 minutes past their scheduled start time. The first offense will result in a verbal warning. The second offense will result in a written warning. The third offense will result in a 14-day suspension without pay. The fourth and final offense will result in termination. 

Based on your recent timesheet records, you have been late for 11 days in February. 

Prior to this incident, the following sanctions were also administered due to your tardiness:

• • December 29, 2022 – You were given a verbal warning for your excessive tardiness and for being late for 8 days in December. We scheduled a check-in after two weeks to see if your attendance improved.
  • January 12, 2023 – You were given a written warning and were asked to explain why you’re always coming in late, and you attributed it to heavy morning traffic. To help with your predicament, your supervisor scheduled you for afternoon shifts for the next two weeks. 
  • January 26, 2023 – Because your attendance didn’t improve and you were late for 10 days in January, you were served a suspension period of 14 days without pay. This also served as your last warning. 
  • February 24, 2023 – Upon checking your timesheet records, you have been late for 11 days in February. 

After deliberating with the management team, we deem that termination is the best course of action. Evidently, the lates were excessive and had been going on for consecutive months, despite scheduling adjustments. 

Please surrender your company ID, store key, and company-issued uniform by February 28, 2023. Also, your access to the company time and attendance platform will be revoked on the same date. 

In addition, please keep in mind that you have signed a confidentiality agreement with us. Please see attached document for your reference. 

If you have any questions, you may contact Shelly Harper at shellyharper@retailcompany.com. 

Regards, 

Jack Foster

Head of Human Resources, Retail Company

Termination letter due to layoffs – Template

(Date)

Subject line: Company layoff

Dear (employee name),

We regret to inform you that (name of company) needs to let some of its employees go due to (reason for laying off). Unfortunately, your role is affected, and we would need to end your employment effective on (date). 

We understand this will cause challenges for you, and we intend to make the offboarding process smooth for everyone. 

The breakdown and computation of your final pay will be sent to you by (date), and you shall receive your last paycheck by (date). 

We also request you return the following company-issued items on or before (date):

(list of company property endorsed to the employee)

Please be informed that your access to (company tools and platforms) will be revoked by (date). 

We appreciate the time you have worked with us and wish you all the best in the future. 

For any questions, please don’t hesitate to contact (name of company representative) at (contact details). 

Sincerely,

(Name)

(Position), (Company name)

Termination letter due to layoffs – Example

March 16, 2023

Subject line: Company layoff

Dear Stephen Simmons,

We regret to inform you that IT Company needs to let some of its employees go due to financial difficulties. Unfortunately, your role as IT Specialist is affected, and we would need to end your employment effective on March 24, 2023. 

We understand this will cause challenges for you, and we intend to make the offboarding process smooth for everyone. 

The breakdown and computation of your final pay will be sent to you by March 22, 2023, and you shall receive your last paycheck by March 24, 2023. 

We also request you return your work laptop and company ID on or before March 24, 2023. In addition, access to your company email, IT database and tools, and workforce management system will also be revoked by March 24, 2023. 

Your medical and other benefits will remain effective until March 31, 2023. 

We thank you for the time you have worked with us, and we wish you all the best in the future. 

For any questions, please don’t hesitate to contact Heather Watson at heather@ITcompany.com. 

Sincerely,

Chris Mitchell

Head of Human Resources, IT Company

Termination letter ending contract – Template

(Date)

Subject line: End of contract

Dear (name), 

Please be informed that we no longer require your services by (date). 

We thank you for providing us with excellent (type of service), but due to (reasons), we had to end our contract. 

Please submit all pending deliverables by (date). We will settle all outstanding bills by (date), so please send all invoices by (date). 

In addition, please be advised that you will lose access to (company-owned platforms and tools) by (date).

Once again, we thank you for your time working with us. We wish you all the best in your future projects. 

Please feel free to reach out to (name) at (contact information) if you have any questions. 

Sincerely, 

(Name)

(Position), (Company Name) 

Termination letter ending contract – Example

March 16, 2023

Subject line: End of contract

Dear Judith McCain, 

Please be informed that Advertising Company no longer requires your services by March 24, 2023. 

We thank you for providing us with excellent copywriting and content services. Unfortunately, however, the project has ended, and we also need to end your contract. 

Please submit all pending deliverables by March 21, 2023. On our end, we will settle all outstanding bills by the same date. Therefore, please send all invoices by March 22, 2023, so we can pay you promptly. 

In addition, please be advised that you will lose access to our content management system, project board, and internal messaging tool by March 24, 2023.

Once again, we thank you for your time working with us. We wish you all the best in your future projects. 

Please feel free to reach out to me if you have any questions. 

Sincerely, 

Faye Smith

Creative Director, Advertising Company