Whereas termination is an integral part of business, it is, without a doubt, stressful to both parties involved, that is, the employer and employee. Therefore, if you are thinking about firing one of your staff, it is vital to draft a termination letter.
The termination letter is a formal notice to an employee that their services are no longer needed for their current position. It is also referred to as a letter of separation, and it details the reasons for getting fired, the termination date, employee benefits, and the final staff benefits. This article is a detailed guide on how to write a termination letter hence avoid any possible lawsuits because of claims of discrimination or any other harmful accusations.
There are several steps you need to observe when writing a termination letter and this include;
- Notify Your Staff About the Termination Date. You should always start a termination letter by stating to your employees that they are being let go and when that will take effect. By doing this, you prevent any possible confusion, thereby giving your employees time to absorb this saddening news and prepare themselves for their firing.
- Explain the Reason for Termination. After informing your staff about their dismissal, you should go ahead and explain the reason why they are getting fired. As you do this, make sure to be accurate, clear, and concise to prevent any potential misinterpretation or confusion. You can also choose to add supporting evidence to back the reason for firing your employee.
- State The Benefits and Compensation They Will Receive. This is another vital thing that you shouldn’t fail to mention, and it involves explaining to your employees about their benefits and compensation will be impacted by the termination. It usually includes stating the salary owed, payment for the unused leave days, and a severance package. It would be best if you also detailed what happens to their retirement funds as well as their retirement and life insurance.
- Inform Them About Company Possessions They Need to Return. Here, you need to state all the company property given to employees that need to be returned upon dismissal. This includes ID badges, keys, company cellphone, parking, just to mention a few.
- Inform Your Employees About the Signed Documents. During the onboarding process, employees sign several documents, including a type of non-disclosure and other documents linked to their employment contract. It will help if you remind your staff about these signed agreements, while simultaneously including a copy of their records and review.
- State The HR Contact Information. You also need to include contact information for the specific HR representative. This is essential as it allows the staff to ask questions regarding their benefits, compensation, and any other information linked to their firing.
When Is an Employee Termination Letter Needed?
Companies usually issue their employees with termination letters for various reasons. Some may be stricter than others firing staff for even minor mistakes, whereas others are more lenient. Here are some of the most common reasons why employee termination letters are handed to company staff.
Employee Violates the Code of Conduct set by the Company. All companies have set rules and regulations that every employee is expected to observe to guarantee a harmonious relationship with coworkers and clients. Thanks to this, smooth business operation is guaranteed if everyone follows this set code of conduct. The most common code of conduct required by the firm is treating coworkers equally and respectfully. Likewise, it states how to build relationships with clients according to the set policy.
The most common violations of a company’s code of conduct include;
- The employee accepting or trying to bribe vendors
- Employee harassing a coworker
- Employee not attending to his set obligations despite showing up at work
- The employee receiving gifts that are either against or exceed the gift policy guidelines
Employee Isn’t Capable of Perfuming a Job. Employers usually invest a lot of time and money into the training of their staff. All this is done with the hope of ensuring the work gets done correctly and competently. However, if an employee is still struggling to deliver to what is expected, this might result in their dismissal.
Some organizations are more lenient and decide to offload these employees to different roles. Nonetheless, if the performance is still substandard, the employee will be dismissed due to poor work quality.
Employee Is Found Guilty of Theft. Some employees are known to be notorious for stealing company property. As an employer, you shouldn’t let such deeds go unpunished and need to either opening legal proceedings against any company staff guilty of theft or firing them. The best way to ensure there’s no theft within the organization is by doing regular checks, which includes regular audits and reconciling statements.
Employee Fails to Adjust to The Company’s Culture. An employee should be able to adapt to different approaches and environments and be open to different types of thoughts. By being adaptable to the company’s environment, they will be valuable to the business’s growth. However, if an employee struggles to adapt to the organization’s culture, it shows they aren’t the best suited to perform the assigned duties. Because of this, they should be let go and find someone else better placed to perform these roles capably.
Employee Doesn’t Fulfill Their Commitments. Every employee within an organization is expected to fulfill several commitments, both big and small. This includes finishing work within the set deadline, and frequently missing the work deadline. If this becomes common, you have no choice to fire such an employee and hire another one who will ensure all duties are done within the set deadline while still guaranteeing exceptional quality.
Termination Letter Template
Dear (Employee Name)
Over the last few months, (Company name) has been going through financial constraints due to the unavailability of work in our industry. However, despite our efforts to try various ways of boosting our revenue stream, such as unveiling new products to replace the obsolete ones, our efforts have been futile. Therefore, we have failed to realize an increase in the flow of work, thereby reducing our income.
As a result of this, we have decided to come to the hard decision of the need to let go of around (number) positions. It is our deepest regret that we inform you that your position is one of those affected and will be terminated from (date).
You will be contacted by a representative from Human Resources this coming week to set up a meeting. During the meeting, you will be offered counseling and help on how to find another job and taken through the details of your separation benefits.
We thank you for your commitment and contributions during your time with us.
Termination letter Samples & Templates
Here are a few termination letter samples and templates to help you in writing your letter.
Termination Letter to Employer
- MS Word
Termination Letter for Poor Performance
- MS Word
Termination Letter for Misconduct
- MS Word
Immediate Termination Letter to Employee
- MS Word
Termination Letter for Cause
- MS Word
Reading through this article has provided you with invaluable insights on how to write a termination letter. You also have learned of some instances when a termination letter should be given to an employee. With this in mind, you are now in a better position to properly draft a termination letter and avoid any possible lawsuit from a displeased former employee.