Company Culture

3 Examples of Termination Letters Done Right

6 min read

In my past life as a middle manager, I worked for a company that had 67 offices around the globe. I was responsible for two of them. After a series of passive-aggressive jabs between my Department Head and a direct report in our APAC office, I was sent on a 9-hour flight to Kuala Lumpur with one goal:

Get this person out.

Unfortunately, I didn't have the authority to decide how that goal should be achieved. The instructions from senior management were firm:

  • Take her out to lunch
  • Tell IT to revoke access to her PC
  • When you get back to the office, tell her she's fired and ask for her key

Aaaand now you know why I no longer work there. Suffice to say, the situation was just as bad as you think it was. (Hands down, the most awkward lunch date of my life.)

So, yes. There is a right and wrong way to fire someone.

And unless you're the current occupant of 1600 Pennsylvania Ave. (or a very confused 27-year-old me), you'd rather be molar-deep in a voluntary route canal than wondering how you're going to fire someone without humiliating them.

The good news is while firing someone isn't always uncomfortable, you can still keep it human—even right down to the formal termination letter.

Does a termination letter even matter?

In short: Heck, yes.

If this is your first attempt at firing someone, you might be surprised to find out that every termination requires a letter, even if you've already told them verbally. The main reason, as you might expect, is legal.

Termination letters give you a documented paper trail in the unfortunate event of a lawsuit. A standard termination letter will:

  • Confirm the reason for termination
  • Provide receipt of company property
  • Give the employee any pertinent info as their time at the company comes to an end

(Quick Note: The info in this article is not legal advice. ALWAYS check with your legal team before terminating an employee contract.)

Unfortunately, expensive lawsuits aren't the only thing to worry about. Just like a bad hire, a bad fire is horrible for your business and brand.

Screaming "You're fired" and pointing at the door might have been OK in the pre-Google days (though, we'd argue it was pretty uncool even then), but in the Age of the Internet, that kind of behavior just won't fly.

Here's why:

  • 70% of job seekers read online reviews before they make career decisions.
  • 48% of job seekers use Glassdoor at some point during their job search
  • 60% of job seekers say they would not apply to a company with a one-star rating

Great HR doesn't stop at recruitment and hiring. And if you're one of the 80% of business leaders who acknowledge employer branding has a significant impact on your ability to hire—you need to be good at firing, too.

Need to write a termination letter? Start here

Whether this is your first time writing a termination letter (lucky you!) or your five-hundredth, you need to nail it.

So what are the core elements every termination letter should include? The answer to that depends on your reasons.

Top reasons people get fired:

According to research from CareerBuilder, these are some of the top reasons for termination:

  • 22% of employers have fired a worker for calling in sick with a fake excuse
  • 24% of employers have fired someone for using the Internet for non-work related activity
  • 41% of employers have fired an employee for being late
  • 17% have fired someone for something they posted on social media

And while you may feel good about firing the employee who called in because "the ozone in the air flattened their tires" and then flooded your Instagram with kitesurfing selfies, there are plenty of other no-nonsense reasons to let someone go.

Other reasons can include:

  • Damaging, misusing or stealing company property
  • Possession of drugs or alcohol possession at work
  • Falsifying company records
  • Misconduct
  • Insubordination

Most of these reasons will fall under 'termination letter for cause' but there are other types of termination letters that might make more sense based on the situation you're in.

Types of termination letters:

  • Termination letter due to layoffs/downsizing
  • Termination letter for cause (misconduct/performance/attendance, etc.)
  • Termination of business contract

What type of language should I use?

As a general rule, aim to keep it professional and laser-focused on the task at hand.

Don’t forget that in a worst-case scenario, this letter would need to hold its weight in court. All details should be clear and accurate. No jokes, sarcasm or overly-sympathetic language. Make sure there's no excess info, no glaring omissions and no room for misinterpretation. Take the approach of "this is what's happening and why". End of story.

What should I put in?

No matter what type of termination letter you're writing, there are a few key pieces of information that should always be included:

  • Employee name
  • Company name
  • Name of the manager overseeing the termination
  • Date of letter
  • Date of termination
  • Reason for termination
  • List of verbal and written warnings
  • List of items to be handed in before leaving (company laptop, keys, etc.)
  • Receipt of company property
  • Details about the final paycheck, vacation pay, severance and other benefits

Always include the reason for the termination and be sure to include any evidence that supports this reason, especially if you're terminating for cause.

Either list and explain the remaining loose ends regarding payment and benefits, or clearly explain how the employee will receive this information.

What should I leave out?

Sarcasm, jokes, inappropriate language or any other kind of familiar language.

For example, 'Yo Steve, it was good working with you but you were a pain in the ass. But hey, look on the bright side. You now have more time to hang out with your kids.' Or, 'You said you wanted to retire, it’s just happened sooner than you thought. I hope you find something more suitable to your personality!'

Even quips that this person might have once found funny will not get the reaction you're looking for when they're wondering where their next paycheck will come from.

And remember, if you're ever unsure about what should or shouldn't be included in a termination letter always ask a qualified attorney.

3 termination letter templates

Here are three catch-all termination letters that can be customized according to your needs.

You can copy/paste these and fill in the blanks with the details that make the most sense for your current situation. Just remember, send it to your legal team for sign-off before you send it to anyone else. (Like, seriously.)

1. Termination letter due to layoffs/downsizing

[Date]

Dear [Employee Name],

Over the last several months, [Company Name] has experienced financial difficulties due to lack of work in our industry. We have explored many options, including the introduction of new products to replace those made obsolete by technological advances. Unfortunately, our efforts have not resulted in increased sales and work.

After reviewing our options, we have concluded that we must eliminate approximately [number] positions. It is with deepest regret that I inform you that your position is one that will be eliminated effective [date].

Within the next week, a representative from Human Resources will call you to set up a meeting. During this meeting you will learn about your separation benefits that include the services of an outplacement firm to provide counseling and assistance in finding another job.

Please accept our appreciation for your contributions during your employment with [Company name].


Sincerely,

[Name]


Why it works: This is layoff letter from the SHRM actually has heart. The employer addresses the issue directly and honestly, without being overly familiar. ❤️

2. Termination letter for cause

[Date]

Dear [Employee Name],

This letter confirms that your employment with [Company Name] is terminated, effective as of [date].

Misconduct: We have concluded, following our investigation, that your conduct toward other employees on [date of recorded incident], violated the company’s [name of specific policy] policy. In particular, your display of sexually suggestive photographs in your cubicle and your explicit language in describing those images to others were direct violations of company policy. Also, you received a written warning and additional training on your obligations to avoid such conduct in October 2017.

Performance: We have concluded that your performance does not meet the requirements of the technician position. In your 2016 performance appraisal, your supervisor noted that you needed improvement in your technical skills and attention to detail. The company provided you with two additional weeks of task-specific training with a coach during the first quarter of 2017. However, the performance problems continued throughout 2017. Your supervisor gave you three written reminders of the need for performance improvements in 2017 and again noted the need for additional improvement in your 2017 performance appraisal. Since that appraisal, it has become apparent that your job performance simply is not consistent with the requirements of your position.

Attendance: Repeated tardiness, even just a few minutes, and failure to call in before missing a shift cause a ripple effect through the entire production department. One employee being late causes stress for all the others because they have to work faster to catch up so their down-line coworkers have the parts needed to complete their work. Also, delays in production of even a few units per day add up over time and make it more difficult for the entire organization to meet its goals.

Payment for your [remaining benefits: accrued sick days, PTO, vacation, etc.] will be included in your final paycheck which you will receive on your regular payday. You will receive a letter by mail outlining the status of your benefits.

We received your office keys and laptop at the termination meeting.

Please keep in mind that you have signed [non-disclosure/non-solicitation agreement/other relevant policy].

If you have any questions, please contact [contact name].


Regards,

[Name]


Why it works: This template covers the core elements of everything that goes into a termination letter and can be adapted according to the situation you're in. For more scenario-based insights on writing a termination letter, check out this article from the SHRM.

3. Termination of business contract

[Date]

Dear [Name],

This letter is to inform you that as of [date], we will no longer require your services.

We've enjoyed working with [name of company] but due to [reasons], we have decided to terminate our contract.

All outstanding deliverables should be completed before our contract is officially terminated. Please send us any pending invoices by [date] so that we can clear any outstanding amounts by [date].

Please note that as of [date] you will no longer have access to [relevant networks, systems, etc.].

Thank you for all your work over these [weeks/months/years]. If you have any questions feel free to reach out at [phone] or [e-mail address].


Sincerely,

[Name]


Why it works: Freelancers and independent contractors will make up 50% of the US workforce by 2020. And this template can come in handy if you ever need to let one of them go. In fact, it can be customized and used to terminate any business contract, whether that be with a freelancer or even another company.

Remember, firing is a skill

Before you head off to draft your own rock-solid termination letter remember that if possible, it's always best to end things amicably. Recruitment is a moving target and unless you're dealing with a truly bad-egg employee, it's always best to leave the door open in case you ever want that person to walk back through.


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