An employee termination letter or termination of contract letter is a formal document used to officially inform an organization or an employee to end the relationship or contract with the company. It serves as written evidence and outlines the details of the termination, such as the effective date, the reason for ending the contract or employment relationship, and other important information.
Creating a professional and legally compliant termination letter can be a complicated process. Still, with the help of our free employee termination letter templates, you can easily create a clear and concise letter that meets your specific needs.
- Select one of our customizable templates.
- Answers a few easy questions to fill in your information.
- Review and download the letter in a business format for your use.
Table of Contents
How to write a termination letter to an employee formally?
An employee termination letter is an official document written by an employer to inform a worker that their employment relationship with a company is ending. In order to create a professional notice, the letter serves several important purposes:
- Date and address: company’s name, address (or company letterhead), and current date.
- Employee information: employee’s name, job title, department name (if applicable), and brief employment record with the company.
- Reason to terminate: the termination letter should clearly state the valid reason explanation, whether for layoffs, cut loss, employment poor performance, or violation of company policy.
- Effective Date: Mention the termination date or the last day at work.
- Termination benefits: If the worker is eligible for termination benefits, such as severance pay, unused paid vacation days, or unemployment insurance according to the laws or company policy, the letter should contain this information.
- Company requirements: Mention to return any company property provided to the employee during their work tenure.
- Final Statements: no matter how this relationship ends, the letter should add the final remarks, such as wishing the employee success in their future endeavors and appreciating their contribution. Close letter with signature and print name.
- Request the employee’s signature: Remember to request the employee’s signature as a record of receiving this letter after sending it.
💡 Important
A well-detailed employee termination letter can help protect the employer against possible legal claims by the terminated worker. On the contrary, this letter also protects employees’ rights by outlining the terms and severance benefits and final salary they are entitled to.
examples of termination letter to employee
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contract termination letter sample
Basic sample letter for contract termination With Your Reason
Service Contract Termination Letter For No Longer Requirement Example
How to write a contract termination letter?
- Review contract: Before drafting this notice, it is necessary to review the agreements’ terms and conditions regarding ending the contract.
- State the date and company information: current date, your name, title, company name, and address at the beginning of the letter.
- Reason to terminate: clearly state the letter’s purpose in the first paragraph. Provide the date the agreement was signed and explain the reason for termination.
- Effective Date: state the termination date will be effective according to the contract’s terms and mention that all responsibilities and duties under the contract will end as of that date.
- Address any outstanding amount: If there are any due obligations or payments in the contract, specify the time frame within which these should be paid.
- Professionalism: keep a professional tone and close the letter with appreciative and thankful statements.
Why do we need a contract/employee termination letter?
This formal letter could be used for legal purposes if one of the parties did not respect the termination term and the company’s policy. Below are the main reasons for creating this letter:
- Formal Record: The letter of termination provides the date and the reason for the termination as a record to start the termination process.
- Clarity and Communication: This document clarifies the terms of the termination, including the details of the effective date, the explanation of the reason, and other vital information related to the company policy or contract. It helps reduce the risk of misunderstandings and future claims or disputes.
- Legal protection: A well-detailed termination letter can help avoid any legal claims or conflict by the terminated party.
- Professionalism: A termination letter can help maintain a professional impression and respect for the contract terms and the termination process between both parties.
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