Letter Of Termination

What Is a Letter of Termination?

A letter of termination is a formal notice to inform an employee they will be dismissed from their current employment. A clear letter of termination can help the departing employee follow internal HR policies, protecting the organization and helping ensure a smooth transition. 

How Does the Type of Dismissal Change the Letter of Termination?

A termination letter needs to reflect the circumstances of the dismissal. Employers generally have three situations where they terminate employees:

• With cause: an employee’s performance or behaviour isn’t meeting expectations or is in violation of the employer’s code of conduct.
• Without cause: the employer dismisses employees due to larger market factors, such as a lack of revenue leading to downsizing.
• End of contract: an employer that hires a short-term employee decides not to renew the employment contract beyond the initial term.

What Should a Letter of Termination Include?

A letter of termination should include the following:

• The termination dates
• Reason(s) for termination
• An explanation of next steps for compensation and benefits
• A list of company property employees needs to return
• Notification of agreements employees signed, such as non-disclosure agreements
• HR contact information for further questions