Hiring and firing are both a significant part of management prerogative, and both are done in the interests of the business. While hiring is a joyful task, firing, however, is not always a relief.

It’s easy to fire and serve a termination letter to an employee who is bringing the business more pain than gain. This is especially true in cases where there are serious business losses and the company has no choice but to lay off even the best workers. Regardless, having a sample termination letter ready will help you get through this task.

What is an Employment Termination Letter?

A termination letter is a formal written notice where the company informs that employee that his/her services are no longer needed, the reason for the employment termination (if any), and the benefits due the employee as a result of the termination. A termination letter is also called contract termination letter, pink slip, notice of termination of employment or letter of separation.

If you want to fire an employee, for whatever reason, handing a termination form can make the process less of a hassle to both the employee and the officer serving the termination paperwork.

What Should an Employment Termination Letter Include?

We strongly advise that you go back to basics and stick to the facts. Here is the information that you must include in your termination letter template.

  • The employee’s name, position and department
  • The name and position of the supervisor of the employee or HR officer handling the termination
  • The events leading up to the termination, including dates and the actions done by the company to resolve the issues (if any)
  • Reasons for termination
  • Date or effectivity of the termination, such as if the termination is effective immediately or effective after two weeks, etc.
  • The company property that the employee is expected to surrender
  • The final pay or benefits that the employee is entitled to receive

You can customize your employment termination letter as you see fit. However, it’s one of those notices that appreciate the saying “less is more.”

The Importance of an Employment Termination Letter

Gone are the days when companies can get away with a mere verbal notice of termination. While you can still say “you’re fired” when terminating an employee, we highly recommend formally serving a termination letter to save you from numerous trouble in the future.

Some benefits of using a termination letter are:

  • You get to clearly and professionally inform an employee about the reason for the employment termination.
  • You could avoid lawsuits concerning wrongful termination.
  • You have a record in case the employee applies for re-employment.
  • You could guide your employees on their next move.
  • The company’s branding image to jobseekers would improve.

Given all its benefit, it’s practical and responsible for any company to have a printable employee termination form ready.

When to Use a Termination Letter

Most employees in the United States are at-will employees, which means either the employee or the employer can sever the employment relationship for any reason, except if in violation of disrimination or contract laws. You cannot terminate an employee because of his/her gender, religion, race, etc.

If you have an employment contract fixed for a certain period, then the employee cannot be terminated outright unless there is a breach of contract. If the employment contract says a termination letter must be offered, then the company should use a termination letter.

There are more reasons to serve a termination letter when the employee belongs to a union. Talk to a labor lawyer if you aren’t sure how to deal with terminating an erring employee.

Check with your state or country if there are labor laws that require issuing a termination letter. In many countries, a termination letter and a minimum period for termination of work relationship are required. This is to give the employee sufficient time to train his/her replacement or to at least find a new job.

So what to consider in writing a termination letter? Here are a few things to keep in mind to make the process of writing and serving a termination letter smoother and less cringey.

  • Stick to the facts.

As mentioned, the employee termination letter form should only mention the facts surrounding the termination. You should not sugarcoat, nor should you include jokes or personal opinions.

  • Avoid discrimination.

Related to the first tip, make sure that you do not attack the employee based on his/her race, age, gender, gender identity, religion, status of pregnancy, disability, sexual orientation or nationality, no matter how severe the fault of the employee is. Otherwise, you may risk being sued for wrongful termination and other possible civil suits.

  • Be direct to the point.

If you are terminating the employee for a just cause, then say so. If you are firing the employee for no reason at all, then don’t mention acts that he has done. It will only confuse him and make him frantic. At the end of the day, being served an employee termination form is bad news. So, don’t make it worse by going in circles.

No matter how difficult, there will come a time when you have to let go of employees. When this happens, a termination letter template will prove useful.

CocoSign has numerous sample termination letters you can download today. Check out our employee termination letter samples in PDF today.

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