Learn How to Write an Employee Termination Letter [ +Examples and Format]

It is never easy to inform someone they have been terminated, and it’s crucial to make sure that the particular employee doesn't feel degraded or cheated in the process. While some employers may find writing a termination letter unpleasant, as they might find it difficult to deliver such a message or fearful of resentment, it is the only way to make sure legal ramifications do not follow. 

When processing the termination notice to an employee, employers should aim to do it respectfully, ethically, and fairly, to ensure the company’s reputation is protected and the outgoing employee is able to cope with the occurrence. 

In this article, we’ll tell you exactly how to write an employee termination letter and provide you with clear examples and letter format. Let’s delve into it!

A termination letter is a formal notice sent from an employer to an employee to notify them that they have been dismissed from their job. A termination letter would usually include information such as the reason for termination, final paycheck date, severance package or benefits, as well as any other relevant details. 

Other than that, some of the most common reasons why an employee may receive a termination notice could include voluntary unemployment, poor performance, misconducting behavior, redundancy, business downsizing, end of a fixed-term contract, breach of a statutory restriction, or conflict of interests.

Regardless of the type of information included, a termination letter (sometimes also called a letter of notice to an employee or an end-of-employment letter), it is fundamental to send a termination letter to an employee to formally end the relationship, as an employee who is not actively working because of leave of absence or illness, or an employee who is furloughed, is still deemed to employed. 

It is also important to recognize the difference between the types of termination letters employers might write to their employees. There are two types of termination letters: (1) termination with cause and (2) termination without cause.

A termination letter with a cause is where the employee is dismissed due to issues related to their behavior or performance.

For instance, when an employee is frequently absent from work without reasonable notice or pre-approval, despite repeated warnings from the employer. The employer would issue a termination letter with cause to the employee. 

On the other hand, a termination letter without cause is written to an employee when the dismissal is directly related to the company, such as a workforce reorganization or department downsizing, where the employment of a worker is forcefully terminated by the company and not due to the employee’s behavior or performance. 

Now that you understand the importance of writing a termination letter to an employee and the different types of termination letters you can write, it is time to look at some tips below on how to begin writing one. 

1. Follow the standard business letter format 

As with other standard business letters, when writing a termination letter to an employee, you should also aim to use the same format. This would include the use of an official company letterhead, with details such as company name, address and contact details printed in the header. The employee’s title and name should be addressed, and the writer of the termination letter, or in some cases the head of the company, should be used to sign off the termination letter. The written date of the termination letter should also be printed in either the top right or left corner beneath the header. 

2. Start with a formal statement of termination

The next step in writing a termination letter is to make a clear statement that the company has officially dismissed the services of the employee, which can be addressed using sentences such as “This letter is to formally inform you that you have been terminated…” or “I am sorry to notify you that…”. 

3. State the date of termination

Another key point to look out for when writing the termination letter is to make sure the date of termination is stated. This is essential as the employee needs to be informed of their last working day in the company. The gap between delivering the termination notice to the employee and the final date of employment also needs to be equal to or more than the notice period stated within the employment contract. 

4. Provide reasons for termination 

This is a crucial part of the termination letter, as the receiving employee will likely be shocked and want to understand the reasons behind the dismissal. All the reasons should be listed in the termination letter. 

If it is a termination letter with cause, supporting evidence should be included where possible in the letter to help the terminated employee clearly understand the cause of termination. In any case of doubt, consult a lawyer to make sure you can legally terminate the employee. 

If it is a termination letter without cause, explain the company’s position on why the dismissal is taking place. The purpose of this is to demonstrate that the company has provided sufficient opportunity for the employee to take corrective measures prior to proceeding with the dismissal. 

5. Provide instruction on returning company property

In the case where the employee is in possession of any company property, it is crucial to request them return these upon leaving the company. List in the termination letter the items the employee needs to return, such as a laptop, monitor, keyboard, mobile phone, and ID card. If they are occupying an accommodation provided by the company, request them to vacate the property within a reasonable timeframe in the termination letter. 

6. Remind them of any binding agreements

In some cases, the employee may have signed a non-disclosure agreement or a non-competing clause upon joining the company. This would often continue to be valid even after an employee has left the company. Ensure that any such binding agreements are mentioned within the termination letter and provide copies for their record. 

7. End with your signature

Similarly, with a standard business letter, you should end the termination letter with good wishes to the employee and a closing salutation such as “Best wishes” or “Sincerely.” Finally, add a signature including your name and title. In the case where the termination letter is print-out, sign it on paper after it is printed. 

Sample termination letter without cause

Sample termination letter for poor performance

Sample employee termination letter for probationary employee

Now that you have read about the steps needed to write a termination letter, you can follow the termination letter template below to begin drafting one. 

— Originally written by Wayne Chang —