Free Termination Letter Template to Use for Your Business
We’ve worked with legal experts and proofreaders to create a free termination letter template. It’ll ensure that you handle a dismissal or layoff with the correct legal document.
What is a Termination Letter?
A termination letter is a formal document used to inform employees that their employment is being terminated. It’s typically used when there is poor performance or misconduct in the workplace. However, it can also be used for other reasons, such as layoffs and downsizing.
There are several reasons why a person or company might consider using a termination letter. Some of these include the following:
- To document the termination process
- To protect your company’s legal liability
- To provide the terminated employee with clarity regarding why they’ve been terminated
- To ensure the terminated employee’s transition out of the company is smooth and orderly
It’s important to put termination in writing. First, it provides the employee with a clear and concise explanation for why they’re being terminated. Second, it gives the employee a record of the termination, which can be helpful if they file a wrongful termination lawsuit. Third, it protects the employer from legal liability.
DISCLAIMER: We are not lawyers or a law firm and we do not provide legal, business or tax advice. We recommend you consult a lawyer or other appropriate professional before using any templates or agreements from this website.
Types of Termination Letters
Termination letters come in several types, each varying in purpose and format. An employer usually writes them, but an employee can also write them.When an employee writes one, it’s referred to as a voluntary termination letter.
There are many ways to classify termination letters; one of the easiest ways is to categorize them by purpose. What is the reason for the termination? By this definition, there are three types of termination letters: with cause, without cause, and to end a contract.
We’ve covered all three in more detail below.
A “with cause” termination letter ends an employee’s job for serious reasons that warrant termination. These reasons include gross misconduct, theft, and sexual harassment, insubordination, repeated company policy violations, substance abuse, and dishonesty.
When an employee is terminated for cause, the employer isn’t required to give the employee severance pay or other benefits. However, the employer may choose to do so.
A “with cause” termination letter should be clear and concise and state the specific reasons for the termination. The letter should also include the effective date of the termination and any severance benefits the employee is entitled to.
It’s important to note that a “with cause” termination letter can have serious legal consequences for the employer. If the employee believes the termination was wrongful, they may file a lawsuit against the employer. To defend itself against the lawsuit, the employer will need to be able to prove that the termination was justified.
If you are an employer, consulting with an attorney before terminating an employee for cause is important. An attorney can help you ensure that the termination is justified and the letter is written to minimize the risk of a lawsuit.
A “without cause” termination letter informs an employee that their employment has been terminated with no specific reason given. This type of termination is typically used in “at-will” employment states, meaning that the employer can terminate employees for any reason.
These termination letters are commonly used for casual and part-time workers during layoffs and downsizing. Aside from a statement outlining that the termination is without cause, a “without cause” termination letter is relatively the same.
It may or may not include benefits information depending on what the employee is entitled to. Standard last paycheck information will be included.
To End a Contract
A “to end a contract” termination letter is a formal notice of termination from one contract party to the other. It informs that party of the other’s intention to terminate the contractual relationship. This type of letter is typically used when one party wishes to end the contract early. It may also be used when the contract has a specific termination date written into it.
This type of termination letter can be used by both employers and employees, as well as other businesses. They’re used for any contractual business relationship between two separate parties.
A “to end a contract” termination letter should include the following information:
- The names of the parties to the contract
- The contract number or other identifying information
- The effective date of the termination
- The reason for the termination
- Any outstanding obligations under the contract, such as payment or return of property
- A statement that the termination is effective immediately or on a specific date
What to Include in a Termination Letter
A termination letter should include several key components to ensure it’s clear, concise, and legally compliant. We’ve listed five of them below.
Basic information, such as the employee’s name and title, should be clearly stated at the beginning of the termination letter. This information is crucial because it ensures the letter is delivered to the correct employee.
The letter should include company info and details about the person handling the termination process. A statement on the employee’s rights should also be made for the sake of transparency. A thank you for their services is also a professional courtesy.
Reason for Termination
The reason for termination is one of the essential components of the letter and should be clearly stated. This is a necessary element for a termination letter because it informs the employee of why they’re being terminated. This can help them to understand what they did wrong and how to avoid termination in the future.
There could be several reasons why an employee is terminated. It could be a company policy violation or engaging in misconduct; it could also be layoffs or downsizing. A termination letter needs to be specific and provide clarity.
If an apparent reason is not given,the employer could also be hit with a wrongful termination lawsuit. So it’s more than just to provide the employee with feedback but to provide legal protection.
Evidence for Termination
If the employee is being terminated for cause, the termination letter should include evidence supporting the reason. This evidence should consist of disciplinary records, performance reviews, and any other relevant materials. Any strikes, chances, specific incidents, and misconduct should be referenced.
Providing evidence for termination will help protect the employer in case the employee legally challenges the termination.
If the employee has any company property, the termination letter needs to address the retrieval of these applicable items. Some examples may include a laptop, cell phone, or company vehicle. The termination letter should present a deadline for the return of the company property.
Including this information in the termination letter will help ensure the company gets its property back. It also provides that the employee doesn’t face any legal recourse if the property has failed to be returned.
Final Payment & Benefits
The termination letter should include information about the employee’s final paycheck and benefits. This should include the date and amount of the last paycheck, as well as any benefits they’re entitled to. This could include health insurance or severance pay.
Including this information in the termination letter will help ensure the employee knows their final payment and benefits. This can help protect any legal recourse, such as an unfair dismissal.
Download our free example
Termination Letter Template
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How to Write a Termination Letter
Are you considering writing a termination letter but aren’t sure how? It’s a relatively simple process, but you need to make sure it’s done right. We’ve outlined an easy-to-follow step-by-step process below.
- Start with the basics: Include the employee’s name, title, and the termination date.
- State the reason for termination: Be clear and concise, and include any evidence to support the reason for termination.
- Provide information about final pay and benefits: This includes the date of the last paycheck, the amount of the paycheck, and any benefits the employee is entitled to.
- If applicable, state that the employee must return company property: Include the deadline for returning the property.
- Thank the employee for their service: This is a professional courtesy, even if the termination was not amicable.
- Sign and date the letter: The termination letter isn’t official until you add your signature and the date.
You can save a lot of time and effort by using a free termination letter template. There are many options available, but Signaturely’s free termination letter template has been reviewed by legal experts and proofreaders. You can download it below.
Creating a digital document is one thing, but sending it is another. The easiest way to send your document to your employer, employee, or contract party is to use an electronic signature tool like Signaturely.
If you do write your own termination letter, make sure that you get your attorney to review it. It’s a legal document, so you want to make sure that it’s enforceable.
How do you write a brief termination letter?
To write a brief termination letter, start with the basic information, including the employee’s name, title, and date of termination. Next, state the reason for termination; be as clear and concise as possible while avoiding legal jargon.
Then, include final pay and benefits information. This consists of the date and amount of the final paycheck and any benefits the employee is entitled to. Remember to thank your employee for their service. This professional courtesy should be done even if the termination wasn’t amicable. Lastly, sign and date the termination letter.
Remember that these are just rough guidelines; make sure to adjust for your specific circumstances. Also, get your attorney to look over your brief termination letter. As it’s a legal contract, you need to make sure it’s legitimate.
Can you make your own termination letter?
Yes, you can make your own termination letter. Start by using a ready-made template and adding in the basic information. It should cover your final pay and benefits information, including paycheck details and any entitlements such as severance.
How do you politely terminate a contract?
Terminating a contract can be a complex and delicate process. It can be challenging to do it in a polite and professional manner. Here are some tips that you can implement to terminate a contract respectfully:
- Start by reviewing the contract: Make sure you understand the terms of the contract and what your options are for termination.
- Be clear and concise: State the reason for termination and the effective date of termination.
- Be respectful: Even if you are terminating the contract for a reason that is not in the other party’s best interests, it is important to be respectful in your communication.
- Offer to negotiate: If possible, offer to negotiate a mutually agreeable termination date or other terms.
- Follow up: Once you have sent the termination letter, follow up to confirm that the other party has received it and understands the terms of termination.
How do I write a letter to terminate my job?
You may need to write a termination letter for yourself at some point as an employee. This is referred to as a voluntary termination letter. Here’s a step-by-step process to write one if you need to terminate your job:
- Start by stating your intention to resign: Be clear and concise about your decision to leave the company.
- Provide your last day of employment: This will give the company time to make arrangements for your departure.
- Thank your employer for the opportunity: Even if you leave the company on bad terms, it is important to be professional and respectful in your letter.
- Offer to help with the transition: If you are willing to help with the transition, such as by training your replacement, mention it in your letter.
- Sign and date the letter: Complete the voluntary termination letter by adding your signature and the date.
Make sure that you get your termination letter looked at by your attorney. It’s a legally-binding document, so you’ll need to make sure it’s enforceable.
What You Need to Remember About Using a Termination Letter Template
A termination letter is a complicated and potentially emotional process for both the employer and the employee. It ensures that each party is treated fairly and protected from any legal recourse. It also allows the termination process to be handled in a professional and respectful manner.
This free template can help you create your termination letter.
Termination Letter Template
This letter is to inform you that your employment contractual agreement has been terminated due to the following reasons
Whereas the company has decided that the date of terminating your employment contractual agreement will be on _______________________.
You are to expect your final compensation on _______________________ which will standardly be provided to you via the means of _______________________.
As a result, the company requests that you return the following items and belongings:
Nonetheless, you are reminded that you are still bound by the confidentiality agreements and terms and conditions that you signed along with the employment contract. Copies of such agreements are available for reviewal upon your request.
Furthermore, you are made known that your health benefits (full/partial) will remain in force for a period of _________________________upon the date of signing this letter.
Please do not hesitate to contact us in case you require any further clarifications regarding this letter.
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