What Are Termination of Employment Letters?

A termination of employment letter, aka job termination letter, is a formal written document prepared by the employer to notify and end terms professionally with a terminated employee. Besides bringing notice to the subject matter, the letter talks about why someone is terminated, whether voluntary or involuntary. More so, this document enlists the necessary steps for the employee to take before officially leaving the company, as well as the expected compensation or benefits the terminated person expects to receive.

In 2021, one out of four people quit their jobs. Visier analytics shows that voluntary resignation occurred to 50 American enterprises and involved about 500,000 employees.

Also, the Bureau of Labor Statistics (BLS) reported that the quit levels and rate in jobs increased to 4.4 million.

Why Is a Termination of Employment Letter Essential?

Termination of employment letters are important to every business. This letter contains a clear summary of the who, what, when, where, why, and how of a termination. Who is terminated? What are the termination procedures to take? When should the employee leave or receive the final pay? Where should the employee go next? And how much is the compensation? In short, a termination of employment letter is the exact oppositive of a verification of employment letter. If employment verification letters welcome an employee and consist mostly of orientation details, employment termination letters say goodbye and fixate mostly on departure details.

Also, termination of employment letters are important as it tackles the significant elements needed to announce a termination without possible disputes or misunderstandings afterward. If an employer isn’t careful with the letter wording and decisions, disputes could follow such as unfair dismissal or wrongful termination. That explains why termination letters should properly state the reason if the dismissal is due to poor performance, short service, low attendance, or gross misconduct. Lastly, these letters aren’t only relevant in the corporate industry. You can terminate anyone from a hospital patient, college student, school board member, to a nonprofit associate. Just state a legal reason behind doing so.

What to Include in a Basic Termination of Employment Letter

When the right reason is to terminate someone for ruining the reputation, dynamics, or operations of your company, you should very well know what elements to incorporate in a standard termination of employment letter. And if you are confused as to what must be included in the letter, here are the universal components of a basic termination of employment letter:

Statement of Employment Termination: If you are sure that the employee is meant to be fired, then don’t give false hopes. Directly mention that the worker is fired. A clear statement of employment termination is a must since that is the main gist of a letter of job termination in the first place. Hence, add that statement right in your letter’s introduction and even in the subject line so it is easier to navigate.Reason behind the Termination of Employment: Of course, you can’t forget to back your statement as to why an employee is fired or terminated. So does it involve a dismal performance, an attendance problem, or any other legal reason? State it. Also, attach supporting statements, files, or documents for proof. Maybe an employee refuses to believe the decision so you can show the facts in the document. And a solid statement of purpose is a strong backbone to your letter, especially when the reason for termination is the number one question asked in employment termination.Benefits or Severance Pay: In letting go of a worker, there are lots of financial aspects to discuss. For example, how much would be the final paycheck and severance agreement pay for the terminated employee? Calculate it promptly. Also, an employee could have a benefits package within the company. So as that person officially leaves, does that mean the insurance and other benefits they have will also be terminated? Some people may want to continue their contributions for a particular benefit or insurance. So note them down. Important Dates: Also, answer the important final employee schedules or dates the terminated worker should keep in mind. So how many days left does the employee have in working with the business? Also, give a short extension because it can be a lot to take in being dismissed. Give them time to pack their belongings and most especially, tell them about the date of their final paycheck. Ensure that there is no delay for their final pay to end the process on good terms.Call-to-Action Statement for the Employee: You already know that the termination letter is part of the significant documents to collect by the terminated employee before heading out. So guide the employee on how to officially manage the entire termination process from start to finish. For example, you state who the employee should approach in deciding the benefits package, where to get their business documents, etc. And a proper call-to-action statement is the best way to do this.Thank-You and Farewell Message: Last but not least, don’t forget to be cordial by ending the message with a thank-you and farewell message. Since the employee is about to depart on a new journey, be sure to thank everything that person has contributed to the company. Just like a thank you letter, specify that person’s contributions, achievements, and milestones. And end with a goodbye message on a positive note. An example is to remain acquaintances despite not working in the same company anymore.

How to Develop a Solid Termination of Employment Letter

Now that you are well introduced to a termination of employment letter’s definition, importance, and components, are you ready to deep dive into developing your own employment termination letter? Not to worry since you will be guided every step of the way. More so, there is no need to start from scratch. Simply follow these useful steps on how to make an excellent termination of employment letter.

Step 1: Use a Customizable Termination of Employment Letter Template

You can certainly access all sorts of sample termination of employment letter templates here on Sample.net. Browse from the entire collection of editable and printable employment termination letters first until you can select something that fits your formatting and business needs. You can even personalize the template by adding the company logo, employer branding, or letterhead. So rather than creating a whole blank letter, at least you only need to work on a few more steps since details and formats are provided ahead for you.

Step 2: Follow the Standard Business Letter Format

Bear in mind that a termination of employment letter is not a mere personal letter. It is still a business letter. So don’t make it too personal as it is different from a personal farewell letter. In fact, you have to follow the standard business letter format from the date, company address, contact information, author’s name, employee’s name, subject, salutation, introduction, body, complimentary close, and signature block. It would be bad for your brand to submit letters without proper format.

Step 3: Insert the Termination of Employment Letter’s Components

As discussed earlier, you need to have the proper components of a standard termination of employment letter. So add everything from the statement of employment termination down to the thank you or farewell message. If any important component is missing, your message may be incomplete. Also, check if you have everything covered. You can also add more elements that you think are needed. An example is if you have forgotten to give an employee a warning letter before considering a termination. Or perhaps, there is room to have them back if they can appeal to just take the necessary disciplinary action.

Step 4: Work on Your Content and Discussion Flow

A common mistake is focusing too much on the format or by adding the components one by one that the whole content somehow lacks organization. Be sure that your content and overall discussion have a smooth flow to them. Don’t simply sound robotic or generic. The key is to know how to make smooth transitions by using the appropriate transitional phrases or words in moving to another topic. And with content data analysis, you can correct your mistakes and ensure that the entire message is cohesive enough for the reader to understand.

Step 5: Review the Employee’s Previous Records

As much as possible, avoid writing inaccurate or outdated data. To avoid wrongful termination, wrongful dismissal, or any mistake that could lead to a dispute, check legitimate records about the employee. And reviewing the terminated employee’s previous records is a reliable reference on what to add to the letter. Also, sharing actual and relevant records is important to be transparent. It will not only help the employee learn about her/his/their achievements but also help the next employer know if the terminated employee has been good in the previous company or not.

Step 6: Maintain a Straightforward Professional Letter

There’s no need to shower your letter with flowery words because you need to be direct to the point. Since this isn’t a personal letter, that means you write professionally. And professional business writing is short, specific, but still cordial. Of course, you mind your tone by not using countless exclamation points, full capital letters, and vulgar words. And don’t forget to consider the presentation of the letter as well. Don’t send it if it’s crumpled or has lots of errors. Otherwise, it could be seen as offensive. And you only sign and submit the letter to the terminated worker once you are 100% sure that it is error-free.


What are the different names of a termination of employment letter?

An employment termination letter may also be referred to as a pink slip, separation letter, notice of employment termination, job termination letter, contract termination letter, or simply a letter of termination.

What are the benefits of a termination of employment letter?

Termination of employment letters help resolve issues between employees and managers. Also, this formal business document is capable of protecting your business from disputes or litigation. More so, this letter is written with respect rather than letting go of an employee without any message. And most importantly, the letter answers questions about how the employee got terminated in the first place. It can be very detailed to specify the different events that led to termination.

How common is employee resignation?

Employee resignation has increased as of November 12, 2021. According to BLS, the quit levels and rate in jobs boosted to 4.4 million.

If you put enough effort into welcoming new hires and preparing new employee orientations in the workplace, then the same should apply to working with employment termination processes. Employers don’t have to keep employees forever anyway because they have their own careers to look after. And if you need extra hands to create an effective employment termination letter, simply use our editable termination of employment letter templates for reference. And what’s better? More sample templates are up for grabs. Download now!