Issuing termination letters is a part of every business. To run a successful business, companies need to discontinue the unproductive employees, otherwise, they will affect the entire organization.
In order to terminate an employee, companies need to issue a termination letter stating the reason for dismissal. Therefore drafting a termination letter is an important duty for the HR department.
What is a termination letter?
A termination letter is a formal letter issued by the employer to dismiss the employee. The termination letter should include the reason for the termination as well as the effective date of the termination.
Companies need to pay all dues such as salary and other benefits that the terminated employee is eligible for up to the termination date.
How do you write a termination letter to the employee?
- Inform the effective date of termination.
- Give reason for dismissal of the employee.
- Ask the employee to submit company properties in his/her possession.
- Mention the details of compensation and other benefits that the employee gets.
- Ask the employee to contact the HR department for any queries.
Reasons for termination?
- Poor performance/Non-performance
- Mis behavior
- Lack of work in the company
- Negligence of work
- Unauthorized/Frequent absence
- Drinking alcohol during working hours
- Absconding etc.
Types of termination letters
There are mainly 4 types of termination letters, which are as follows
- Voluntary termination: When employees intentionally leave their jobs due to reasons like better job opportunities, lack of growth in their current job, etc.
- Involuntary termination: This happens when companies lay off their business because of no business (or) cost-cutting (or) due to the poor performance of the employees etc…
- End of contract termination: It happens when a job contract between employer and employee expires.
- Termination by mutual agreement: Instead of firing employees sometimes companies want their employees to resign, so that they can be relieved normally. It helps employees avoid difficulties in getting a new job.
This type of forced resignation can be considered terminated by mutual agreement.
Importance of termination letter
- Issuing the termination letter is the professional way to terminate an employee. In business, everything should be documented for future reference. Therefore after issuing the termination letter a copy of it should be kept in the company records.
- A termination letter acts as legal proof for both employee and employer.
- The termination letter includes the reason for termination, so the employee can give his/her explanation. It also helps the employees not to be terminated for the wrong reasons
- Depending upon the notice period mentioned in the termination letter the employee can try his/her next job search.
- Finally, the termination letter confirms your last working date on the job, and you will get all your salary and other benefits up to that date.
Sample Termination Letters
Here you can find some sample termination letter formats which can be downloaded in Word format.
1. Simple Termination Letter to Employee
Sub: Termination of employment.
Dear Mr./Ms. [Employee Name],
We deeply regret to inform you that your employment with us as [employee designation] terminates on [date] with immediate effect. The reason for your termination is poor performance/violation of company policies/misconduct.
Please complete all formalities for full and final settlement and surrender the company properties such as laptop, mobile, or any other property in your possession.
Your experience certificate and relieving letter will be issued upon completing the required formalities.
We thank you for your service and wish you great success in the future.
If you require assistance please contact the HR department.
Yours sincerely,
For “the company Name”,
Authorized Signatory.
2. Termination Letter to Employee for Poor Performance
Sub: Termination of your services from the organization.
Dear Mr./Ms. [Employee Name],
This letter serves as the notice of termination of your employment as [Designation] effective [date].
Your termination is issued because of your consistent poor performance. Your performance has been evaluated many times and you have been notified several times, but you still fail to meet the basic requirements of your job.
Please return the company properties to the HR department. Your full and final settlement will be paid according to company rules.
Thank you & wish you every success in your future endeavours.
For “Company Name”,
Authorized Signatory.
3. Termination Letter to Employee for Unacceptable Behaviour
Sub: Termination of employment: Unacceptable behavior.
Dear Mr./Ms. [Employee Name],
We are writing to inform you that your position as [designation] at [company name] is terminated effective immediately by [date].
You are terminated for the unacceptable behavior of harassment of co-workers/ misconduct with customers /inappropriate physical behavior in the workplace on [date].
You have been warned repeatedly about your unprofessional behaviour, but we found no improvement in your behaviour.
Consequently, we decided to terminate your employment contract. Kindly return the company properties held by you to receive your full and final settlement.
Best of luck with your future.
For “Company Name”,
Authorized Signatory.
4. Immediate Termination Letter to Employee for Misbehaviour
Sub: Termination letter.
Dear Mr./Ms. [Employee Name],
This is in reference to our discussion on [date of discussion], we regret to confirm that Your employment with us for the position of [job title] is terminated with effect from [last date] with immediate effect.
You are terminated for misbehavior with management, and your performance is not satisfactory either.
Considering the seriousness of the matter, the company decided to terminate your employment.
You may collect your full & final settlement dues, if any, from the Accounts Department.
For “Company Name”,
Authorized Signatory.
5. Termination Letter to Probationary Employee
Sub: Termination letter.
Dear Mr./Ms. [Employee Name],
This is to notify you that you are being terminated from the position of [job title] effective at the closing hours of [date]. You are terminated for failing to meet the company’s expectations.
However, we appreciate the time and effort you have devoted to your position during the probationary period.
Please contact the accounts department regarding your severance pay.
Thanking you.
For “Company Name”,
Authorized Signatory.
6. Termination Letter Due to Lack of Work / Redundancy
Sub: Termination of employment.
Dear Mr./Ms. [Employee Name],
We sincerely regret to inform you that your employment with us will officially end on [date] due to a lack of work.
We have decided to implement a workforce deduction and, unfortunately, we no longer require your position in the company.
As your employment is terminated due to redundancy you will be entitled to receive a termination benefit as per the company rules.
We are confident that you will be able to find another position shortly. We would be happy to write a recommendation letter to help you in your future job.
Please contact the HR department if you have any questions or concerns.
We wish you all the best in your future endeavours.
For the “Company Name”,
Authorized Signatory.
7. Termination Letter for Negligence of Duty
Sub: Termination letter.
Dear Mr./Ms. [Employee Name],
The purpose of this letter is to inform you that your employment with us will be terminated as of [date]. The reason for termination is due to your negligence in the duty.
Even after a series of warnings, there is no change in your approach to work. Your wilful neglect, disobedience, and nonseriousness towards work have been observed by the management.
Therefore finally we decided to terminate your employment.
You will be entitled to severance pay, for which you must return company assets such as your laptop, mobile, and any other property you hold.
We would like to thank you for your work so far and we wish you good luck in your future endeavours.
For “ Company Name”,
Authorized Signatory.
8. Termination Letter for Drinking Alcohol in Duty
Sub: Termination letter.
Dear Mr./Ms. [Employee Name],
We regret to inform you that your employment with us as a [job title] is being terminated with immediate effect from [date] for violating the company policies.
It has come to our attention that you consumed alcohol during working hours on [date] which was confirmed after the investigation.
On this note, the company is constrained to terminate your services. This decision is final and irrevocable.
You are hereby ordered to return the company properties you possess.
Your salary and other dues if any will be paid under full and final settlement if all the conditions are met with company regulations.
Please contact the HR department for any queries and concerns.
For “ Company Name”,
Authorized Signatory.
9. Termination Letter Due to Unauthorized Absence
Sub: Employment termination.
Dear Mr./Ms. [Employee name],
You are hereby informed that your employment with us as a [job title] terminated effective the closing hours of [date] for your continued absences without any intimation.
According to the company’s terms and conditions, a continued absence without prior approval from a superior would result in the loss of employment.
Your severance pay and other dues if any will be paid until the above date if all conditions are met.
Kindly contact the HR department for any queries and concerns.
We wish you all the best in your future endeavours.
For “Company Name”
Authorized Signatory.
10. Termination Letter for Theft
Sub: Termination of employment.
Dear Mr./Ms. [Employee Name],
I am writing this letter to inform you that your employment as a [job title] from [company name ] has been terminated with effect from [date]. You are terminated due to the theft you committed.
The security cameras recorded that on June 22, 2023, at 7:00 pm after closing hours, you are taking company products outside. You also failed to prove your innocence on the subject.
Theft is a strict offense and cannot be tolerated, so we are issuing this termination letter. Please return the missing items immediately or you will be entitled to legal action.
Your final salary will be released after the clearance of this issue. Please contact the HR department for any questions or concerns.
For “Company Name”,
Authorized Signatory.
11. Termination Email to Staff
Sub: Termination of employment.
Dear Mr./Ms. [Employee Name],
We are sorry to inform you that your employment with us as a [job title] terminated on [date] effective immediately. Your termination is the result of poor performance/lack of work in the company/ unprofessional behaviour/unauthorized absence.
You will receive your severance pay/full and final payment upon return of the company’s properties to the HR department.
Thank you for your contribution during your tenure with us and wish you all the best in your future endeavours.
We would be pleased to provide a recommendation letter to help you in your future job search.
Thanking you.
For “Company name”,
Authorized Signatory.
FAQs
In general, companies will give a notice period of 30 days to dismiss an employee, but in extreme cases such as severe misconduct (or), damage to company properties (or) theft companies can termite employees with immediate effect.
It depends on the company’s rules and regulations. However, every terminated employee is entitled to receive his salary up to their last working date.
Additional compensation will be decided by the company depending upon the reason of termiantion and the company’s policies as well.
Yes, companies can terminate permanent employees by giving prior notice. The termination rules will be present in the appointment letters.
The terminated employee has a right to receive an unpaid salary, gratuity if eligible, bonus, PF, experience & relieving certificates. But to use these rights the terminated employee has to return the company properties held by him/her.
If the employee refuses to sign the copy of the termination letter still companies can terminate them. Companies should need to proceed as per the termination rules mentioned in the appointment letter. So in case the employee proceeds legally still the company has the advantage to win the case.
The best way to terminate an employee is by giving a sufficient notice period and letting the employee understand the reason for termination.
Yes, terminated employees have the right to get experience letters, relieving letters, and salary slips.
Yes, it is up to the companies to rehire the dismissed employees.
Severance pay is the compensation paid to the employee while leaving the job. It includes outstanding salaries and other benefits like bonuses, incentives, gratuity, etc.. provided by the company.
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