How to Write a Termination Letter to Let Go of an Employee

How to Write a Termination Letter for an Employee

A termination letter formalizes an employee’s termination from a company. It contains information pertinent to the termination, such as the date and reason. 

For example, you must state why the company decided to let go of an employee. Was he performing poorly? Has he been tardy or absent from work for several weeks already? These are just a few valid reasons an employee can be terminated, especially after a warning period.

So, how do you write the document without incurring any legal issues later on? Here are the steps you need to follow to create a termination letter:

1. Indicate the date

When writing a termination letter, remember to use the company’s letterhead. This formalizes and keeps the document professional. 

Start with the date when you are drafting the letter. The date should be printed below the header of the company.

2. Address the concerned employee

Keep things professional when you’re writing the letter. Address the employee with an appropriate salutation. A good example is “Dear,” since it is a universally accepted salutation in corporate settings.

Remember to include the employee’s complete name. 

3. Write a formal termination statement 

Be clear about the intention of the letter. Write a clear statement that the company has terminated the employee’s services. An example that you can use can be “This letter is to notify you formally…” or “I am sorry to inform you…” 

4. Be clear about the termination date

The specific date of the employee’s termination should be indicated in the document. This is the employee’s last working day in the company. 

A good practice is to serve the termination notice with a date more than the notice period. This way, the employee has enough time to prepare and look for another job. 

5. Specify the reason for termination

When learning how to create a termination letter, you likely already have the reasons behind it. This is why you must be specific in including it in the letter. 

If the termination is without cause, you can explain the company’s decision and current position. A good example is if the company is downsizing due to financial constraints. But if the termination is with cause, support it with evidence. The letter you write should indicate that you have given the employee a chance to make corrections.

6. Discuss the settlement

The document should also discuss the compensation and benefits to which the affected employee is entitled. You can indicate in this document if there is a pension, leave encashment, or severance pay. 

You must also indicate when the employee can collect his final documents, like salary slips and experience certificates. If you also provide employee insurance, let him know when the coverage will expire.

7. Request to return company property

The termination letter you write should also indicate information on how the employee should return company property. Some examples include a company-owned laptop, mobile phone, ID card, or keys. 

If the employee resides in a company-provided accommodation, you can give him enough time to vacate the property.

8. Remind him of the binding agreements

Some companies have an existing binding agreement, such as a non-disclosure or non-competing clause. Make sure to remind your employees that these agreements are applicable after leaving the company. 

9. Give HR’s contact details

Before ending the letter, include the HR representative’s contact information. This way, the employee has someone to approach for all his concerns. 

10. Sign the letter

Finally, conclude the letter by sympathizing with the employee. You can end with “Sincerely” or “Best regards.”

Leave enough space to affix your signature and write down your name.