Most human resources officers write tons of letters every day. As an HR, you might wonder how to write a formal termination letter.
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What is a Formal Termination Letter?
An employer sends an employee’s termination letter with a notification that they failed to meet the company’s standards. Termination letters list information such as the reason for dismissal, the benefits they may receive, and the date of their final paycheck.
Employees must feel not cheated or degraded when they let someone go. If your evaluation or disciplinary processes worked well, the employee should receive a warning that a termination may be imminent.
Be sure to meet with the employee before you send them an official resignation letter.
Before sending the employee an official termination letter, arrange a brief meeting to let them know they’re fired.
You may also need to let go of employees temporarily. Furloughing pertains to such an instance. An employee’s furlough is a mandatory unpaid or partially paid period. Employees may receive unemployment and other benefits, such as health insurance amidst this timeline.
Many factors cause furloughs, such as cost reduction or organizational restructuring. Employers should ensure that employees know this arrangement via a furlough letter.
There should be two considerations when writing both letters: tone and compliance. A fully compliant termination letter or furlough is essential to avoid lawsuits.
The employers typically hire employees and keep them on probation for several months before confirming their employment. Generally, probation periods last 90 days or three months.
Some countries have employment contracts that are generally open-ended and do not expire until the employee or employer requests it. Employers and employees can agree to terminate contracts before the intended expiration date, but it is not necessary if both parties agree.
What are Important Things to Remember about Formal Termination Letters?
When factors occur, an employee should receive a formal notice that they will undergo termination from their current position by the company. An employee’s clear termination letter can help protect the organization and ensure a smooth transition for the departing employee.
Your legal counsel should check the letter before you send it.
The HR should safeguard the documents of the terminated employee. Keep copies of the terminated employee’s records and letter of separation in case the employee decides to take legal action against the company.
However, most employers do provide termination letters as an act of courtesy and legal records. Letters of separation also aid in unemployment claims.
All policies that apply after an employee has been terminated or furloughed are listed, so you can remind them.
Although termination letters aren’t legal requirements, some HR departments require them.
Employee termination letters let the employee know when they are being terminated and may include information about how they are terminated. Businesses can use a termination letter template to write letters addressed to employees.
An employer may terminate an employee who previously entered an agreement with the company through a business contract.
Basics of Writing a Termination Letter
It’s important to know what a termination letter is before writing one. It is a document that is used in the workplace. Also, it’s written assurance that you will stop future employment with probable cause within the set period specified in the document.
Make sure you’re legally allowed to terminate this employee and learn more about relevant terms. Some countries do require ample notice, pay, or termination reasons.
Everything should have been made clear with the employee before the termination period starts.
Take all policies in effect after an employee faces termination or furlough, so you can remind them in your letter.
If possible, ask your HR colleague to read the letter and let you know if anything sounds wrong.
Employees inform them they have been fired, explain what steps they must follow, and explain how they are entitled to benefits or compensation. The termination letter is also known as pink slips. Other terms include letter of firing, contract termination letter, letter detachment letter, and notice of termination of employment.
Depending on the circumstances, the termination letter specifies the employer’s justification for terminating the employee.
The termination letter debunks claims that the employee resigned. Some companies may argue that they did not fire an employee and that it was the employee who voluntarily quit their job.
It is commonly done for strategic reasons, as a way to avoid blame. However, if the employee receives a termination letter, the employer cannot claim that the employee resigned.
A detailed termination letter may provide protection in the event a former employee claims they have been fired without cause.
Sample Termination Letter
We regret to inform you that your employment ends on (add date). Your last day of work will be on that date and will depart from (add firm name).
Your contract specifies a notice period for termination, and the above data are as follows. The reason for termination is improper behavior or conduct with the customer.
They are outlined in the attached documents below.
You are required to return all company equipment, materials, and documents in your possession. As part of our data protection policy agreed upon at the beginning of your employment, please observe confidentiality.
You will receive a retirement package within 30 days. If you fail to return company property in your possession, your final paycheck will be delayed.
Lastly, you are welcome to reach out to the HR department if you have any questions.
Thank you for being so helpful. We wish you success in your future endeavors.
To Wrap Up
As you can see, this article has presented what a formal termination letter should contain. It may differ between organizations and personnel. A formal termination letter should generally provide the following details:
- Date that the employee is terminated
- The reason for termination.
- What would be the next steps.
- How to contact the organization if there are any questions
- A statement of the process taken to protect your company
- What would happen to the employee’s unemployment benefits.
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