Employee Termination Letter - Create One Easily with UBS
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Employee Termination Letter – Create One Easily with UBS

December 14, 2022
HR Toolkit
Employee Termination Letter

As an employer, terminating the employees if something goes wrong is an unavoidable fact that every one of you has to face. While it’s not a pleasant process, it’s a necessary one.

Whether the termination is voluntary or involuntary, you should have a proper procedure in place to manage it as painlessly as possible. And this procedure includes sending a clear and well-crafted terminating letter in order to keep your employee well-informed about the termination. This will help them move forward beyond their time at the organization.

Here readymade employee termination letter format comes in handy. This blog will help you with everything related to a employee termination letter for an employee.

What is Employee Termination?

Before we look at how to write a employee termination letter, it is very important for you to know what termination actually means.

The term employee termination means the end of an employee’s work with the company. An employee may be terminated from work of their own free will or by the employer’s decision. Employers who are terminating an employee may do it for various reasons like poor performance, downsizing, or redundancies.

Let’s look at the few types of employee termination first.

Onboarding requires many HR documents.

Types of Terminations

1. Voluntary Termination

In Voluntary Termination, the employees themselves take the initiative to leave the company. The decision for leaving, as such, can be for many professional or personal reasons. For instance, the reason could be toxic work culture, fewer or no growth opportunities, or employee development, or the reason could also be some of their personal problems. 

2. Involuntary Termination

In this type of termination, the employer ends an employee’s work with the company. It can be for unacceptable behavior, poor performance, violation of company rules, etc. Involuntary termination can also be the result of an employee’s disciplinary action.

3. Employment at Will

This type of termination states that an employer can terminate an employee at any time without any reason. In this, the employer does not need to give any reason to the employee. However, if a discrimination claim should ever be made, employers must be able to prove their case.

4. Mutual Termination

This termination occurs when both parties decide they are not a suitable fit, as the name implies. Given that it is a mutually decided decision, this kind of termination is much less messy.

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Causes of Employee Termination

There could be many reasons for employee termination. The reasons could be from both the employee’s and employer’s points of view, which include:

From the employee’s Point of View

  • Better employment contract elsewhere
  • Lack of interest in the job
  • Fewer or no growth opportunities like promotion, etc.
  • Bad employment relationship
  • Employees with personal problems

From the employer’s Point of View

  • Low performance 
  • Violation of company rules 
  • Employee Disciplinary Action
  • Any sort of harassment, be it sexual, mental, physical, or emotional.
  • Lack of cooperation and discipline
  • Leaking information about the competition and more.

In all such cases, an employee termination letter works best for terminating an employee officially and in a legal manner.

Further, we will know what a employee termination letter is and how you can write employee termination letters to your employees.

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What is an Employee Termination Letter?

So, what is a employee termination letter exactly?

An employee Termination Letter, also known as a notice of termination, pink slip, or letter of separation, is a formal written document that notifies an employee that they are being terminated from their employment. This might be due to poor performance, unacceptable behavior, layoffs, incompetence, or any other justifiable reasons.

Issuing a employee termination letter is the final step of an employee’s lifecycle in a particular company. It equips employees with all the knowledge they need to properly begin the offboarding process. Additionally, it helps in the proper termination of employees (or the proper layoff of employees in the case of termination for good reason) to assist you to avoid any misunderstandings or legal issues.

No of the circumstances surrounding the termination of an employee’s employment, the following details ought to be included in your termination letter format:

  • Date of Termination
  • Type of Termination (with or without cause).
  • Termination reason(s) with all the supporting evidence.
  • Next step for compensation, health insurance, and benefits.
  • List of items that are to be returned by the employee.
  • Agreement notifications that the employee signed, such as NDA.
  • The next step is information related to internal HR processes, like offboarding and exit interviews.
  • HR contact information for further queries.

Employee Termination Letter

Note: This letter will be useful to you! You can edit it, as your needs and requirements.

Importance of Termination Letters

There are various reasons why it is important for you to issue an employee termination letter while firing or laying off someone:

  • A termination letter is a written record of the employee’s termination which includes the reason for their termination and any other relevant details.
  • Termination letter is important because it acts as evidence that your organization has acted legally and fairly in terminating an employee.
  • Termination letters are usually the last step of the action plan. You can complete the circle and show that the employee was given every chance to live up to expectations and enhance performance before being let go.
  • In a letter of termination, the termination date is stated. It is crucial since, in cases of unfair termination, there are many deadlines for bringing complaints against an employer. Employers frequently assert that employees are ineligible to file claims because they missed a deadline.
  • The letter of termination debunks assertions that the employee resigned. Some businesses may claim that they did not terminate an employee and that the worker left or abandoned their job voluntarily. It is frequently carried out for tactical reasons to escape responsibility. However, if the employee receives a letter of termination, the employer cannot argue that the individual was never fired.
  • Lastly, although there is no legal obligation to issue a termination letter, it may help avoid situations where a previous employee may claim that they were fired without any reason or prior information.

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One of the worst experiences in professional life is getting fired. It is the thing that an employee dreads the most, so it is to be expected that termination will stir emotions. It is your responsibility as HR to make the procedure as simple as possible.

We hope you now have a better grasp of employment termination in order to conduct this process quickly. To get access to the readymade employee termination letter format or other HR documents, get access to the UBS HR Toolkit for free.

UBS HRMS Software has over 300+ HR documents that can help you cut down your employee documentation time by 50%. Get in touch with UBS to know more.

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Alpesh Vaghasiya

Alpesh Vaghasiya

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