No one wants to be in the awkward position of having to let go of a colleague, it is even worse to be at the receiving end of a “pink-slip”. This is the type of situation where being structured yet sensitive to another can create a smooth transition for both the employee and the employer.
Termination procedures typically involve sending the employee a termination letter. It is an important step in maintaining professionalism and compassion for the affected employee. Here, we will help provide structure to your letter and highlight essential elements to avoid any misunderstanding.
What are the essential elements of a Termination Letter Format
Termination letters are formal notices to an employee that conveys a company’s intention to terminate their employment. A typical letter should include the following points:
- Outline events/ reasons that lead up to the termination notice
- Employee last day
- Disbursement date of final paycheck
- Severance package (if any)
- Details on cessation of benefits (e.g. medical, allowances etc.)
- Company assets to be reclaimed
- Existing policies to be noted
- Human Resources contact person
Prior to sending out the notice, be sure to consult your company’s legal representative. This is a final check to ensure that all processes are in compliance with the local workforce regulations. They can also help to cross-check all relevant policies that remain in effect after the termination so that you can include them in the letter.
Read more about all other inclusions in an HRBP’s job description & responsibilities
How to write a termination letter
The primary objective of a termination letter is to provide a clear reason for dismissal and outline subsequent next steps to complete the process. Terminations are done for a wide variety of reasons, but it should not be used to define an individual. When crafting your termination letter, you need to separate the person from the act (reason of termination). This can help to preserve their dignity, allowing them to better accept the reason for termination and begin their transition to their next career move.
Here we will outline 2 scenarios that warrant termination of an employee and provide a template that you can use.
Termination due to problems in business outlook – [Template #1]
Date:
To
Employee Name Designation
_______________________________________________________________________
Subject: Termination agreement
Dear [Employee Name],
I am sorry to inform you that your employment with [Company Name] will end on [Last Work Day].
The reason for your dismissal was taken in view of the urgent business situation faced by the company. This decision, while necessary, is not a reflection of your performance and done with a heavy heart.
Over the last few months, the business has encountered financial difficulties due to [Insert Reason]. While various options have been explored to minimize impact on our employees, this has proved to be unsuccessful. The company is forced to reduce our headcount by [Insert reduction value], and unfortunately your position is part of this reduction. This decision is final.
Moving forward, please note the following during this period of transition:
- Your final paycheck is due on [Date of Final Paycheck] along with payment for your remaining leave days.
- You will be entitled to a severance package amounting to [Insert value] paid alongside your final paycheck. [A separate document will be sent to you detailing your entitlements].
- Access to your [Insert Relevant Benefits] will remain available until [Insert cessation date].
- The company is also providing outplacement services to you. For more information please contact [PIC Name] via [Email].
- Please return [Company Assets] to [Relevant Department] by [Deadline].
I would also like to divert your attention to the following company policies you have signed: [Insert Relevant Policies]. The details to these documents are attached for your reference.
Within a [Insert timeframe], a human resource representative will reach out to you to discuss your benefits and consult you on your next career move. If you need more clarity on the process or have some concerns, your representative is [Insert Name] and can be contacted directly via [Insert email and/or phone number].
We would like to express the great contributions you have made to [Company Name] and wish you all the best.
[Name and Signature]
Termination due to problems in performance or discipline – [Template #2]
Date:
To
Employee Name Designation
_______________________________________________________________________
Subject: Termination agreement
Dear [Employee Name],
I regret to inform you that your employment with [Company Name] will be terminated on [Last Work Day].
As discussed, we think that it is in the best interest of both parties that we end our employment relationship. Our decision is based on a series of the following events:
- [Insert Date]: [Insert outcome of performance review/ instance of misconduct]. This is followed up with [Insert recount of corrective action taken]
- [Insert Date]: [Insert outcome of performance review/ instance of misconduct]. This is followed up with [Insert recount of corrective action taken]
- [Insert Date]: [Insert outcome of performance review/ instance of misconduct]. This is followed up with [Insert recount of corrective action taken]
We sincerely hope that you can reflect on past errors and work towards self improvement.
Moving forward, please note the following during this period of transition:
- Your final paycheck is due on [Date of Final Paycheck] along with payment for your remaining leave days
- You will be entitled to a severance package amounting to [Insert value] paid alongside your final paycheck. [A separate document will be sent to you detailing your entitlements]
- Access to your [Insert Relevant Benefits] will remain available until [Insert cessation date]
- Please return [Company Assets] to [Relevant Department] by [Deadline]
I would also like to divert your attention to the following company policies you have signed: [Insert Relevant Policies]. The details to these documents are attached for your reference.
If you need more clarity on the process or have some concerns, you can contact the HR Manager, [Insert Name] via [Insert Email and/or Phone].
We wish you all the best in your future endeavours.
[Name and Signature]
