Termination Letter - How to write a Letter of Termination

At some point in your career, you will have to write a letter of termination. This page covers the two types of termination. The first one is a termination because of poor performance or conduct. The second part, we will cover the unfortunate event of termination due to redundancy.

Before you write the letter of termination, check with the human resource department on the legal issue involved. I am unable to give legal advice on the termination letter. Every country have different requirements. Make sure you do this first before you decide to terminate the employee, or they may be able to bring you to court. This is applicable for either types of termination letter.

Termination Letter for Poor Performance or Conduct

Now, if everything is fine on the legal department, you can start the termination process. Before you write the letter of termination, talk to the employee.

As a manager, you should be able to work out any problems the employee might have. If the problems cannot be worked out, then there is one final step before you write the letter.

If the situation is not too serious, tell the employee verbally that he will be given a letter of termination. Ask the employee to resign first so that there is no record of being terminated for the employee.

(Note: Again, check if this is legal in your country). You can also write a letter asking the employee to resign or face termination. See a sample request for resignation before termination letter.

If the employee does not want to resign, then you are forced to write a letter of termination.

Begin by summarizing the employee's history with the organization and state the reason for dismissal. Be truthful, objective, and clear in stating any reasons for dismissal. False or ambiguous statements, even if meant to protect the employee's ego, may be used against you if your decision is later challenged.

If you do not include all the reasons for termination in the termination letter to the employee, do include a full explanation in your files. Make sure you document every reason for the termination as well as all the actions taken to work out the issues before termination became the only option.

Assure the employee your company will release only job titles, salary, and date of employment to prospective employers if it is your company's policy to withhold other details about performance and reasons for termination.

Avoid a hostile tone; instead show concern for the employee's future well-being.

Redundancy Letter of Termination

Sometimes, a company has to make tough decisions, and this may involve making redundant a number of jobs and even entire departments or divisions.

Now, I must highlight this point. As the senior management, you should hold a meeting for the entire company if you are making redundant a lot of positions. Employee morale will suffer even more if you just hand out the termination letter.

Also, do everything you can to help the affected employees. The fact is most of them are performing their job well enough, the problem is caused by management itself. So face up your responsibilities and make it as painless as possible. I have seen examples where employees were given their letter of termination and just asked to leave their office the moment they arrived at work. To me, this is just poor management.

Now, here are some tips on how to write the termination letter:

1. Provide as much details as possible (leave out any market sensitive information) of the situation which have led to the redundancy
2. Spell out the terms of the redundancy such as the notice period, settlement, any requirements in terms of the return of company property, and any other terms applicable.
3. Provide information on the employee's entitlement for appeal, the appeal process and time lines.
4. Offer any help you can provide.
5. Thank the person's efforts and contribution.
   
   

Cancellation letter

Another common type of termination letter is for terminating contracts or services. Otherwise known as cancellation letter.

It is critical that there are no misunderstanding so try to include the following if applicable.

• Take care to include your company's name, contact information, and the account number.
• Be sure to check if there is any notice period you need to comply with.
• When writing the cancellation letter, state in no uncertain terms, the service is canceled.
• If you have given the service provider the authority to do any activity on your behalf, tell them they no longer have that authority. Examples of such activities include contacting your customers, access to your premises or making statements to the press on behalf of your company.
• If you are happy with their service but are unable to continue with them for whatever reasons, then thank them.

Below is a letter from a reader asking me to check if the letter was ok. It is well written