December 14, 2021

7 Tips To Writing A Respectful Termination Letter (With Sample Template)

We understand that, as an employer, you wouldn't willingly lay off an employee, especially after the long and difficult hiring process at selecting the right candidate for the role. However, involuntary employee turnover isn't something that we control. That's why it's important to write a good, clear, and reasonable termination letter to the employees you'll have to let go.

A termination letter, also known as a letter of separation and contract termination letter, is a formal notice of letting the employees know that they’re being dismissed from their current position. This letter typically contains information regarding the reasons for their dismissal, benefits, or compensation that they may receive, the date of their final paycheck, what the employees should do, and other relevant details about their termination. 

Sending a termination letter is a common practice when you’re officially dismissing an employee from your company, as a sign of respect and professionalism. 

Why Are Termination Letters Important?

The termination letter is typically written when involuntary turnover happens to an employee. However, regardless of the reasons you’re letting go of that employee, it's needed to show your professionalism, which helps maintain a good reputation and provide a record of events for your company in case of legal disputes. 

Handing your employees a letter of termination when they’re dismissed from their current job is also a sign that you respect them for their time of service. Not only that, but by providing a notice of termination of employment, you allow your employees to have the ample time needed in preparing for their next steps. 

How To Write A Respectful Termination Letter?

Since termination letters are written and sent to employees to inform them of their release of duty, the letter needs to include the reasons for their dismissal. Below are explanations as to why a termination letter may be issued to an employee.

1) Without cause (downsizing or market related)

An employee may be laid off without cause due to the company’s decision in downsizing as well as larger market factors. This type of termination is typically unrelated to the employee’s performance or workplace behaviour. 

2) With cause (performance or behaviour related)

An employee can also be laid off because of their poor performance or bad workplace behaviour. However, do note that employees should be given warnings or chances to better their performances and behaviours, before a letter of termination is issued.

3) End of contract

This type of termination happens when a company or an employer decides to end business relations with the other party (the employee) they previously signed a limited-time contract with.

Things Employers Need To Pay Attention To

It’s for the good of both parties when an employer decides to end the employment relationship with an employee peacefully, in order to reduce the risk of lawsuits. Hence, it’s always good to write the letter of termination in a respectful and polite tone. However, to properly sign off an employee, below are the things you should pay attention to.

1) Refer to the employment act

It’s wise for a company to refer to the employment act before laying off an employee. Especially for multinational companies, as different countries or states may have different employment acts. The last thing you'd want to do is wrongfully terminate your employees, which may result in potential lawsuits. 

2) Consult a lawyer

Besides having to go through the employment act, you should also read through the employment contract that both parties signed. This may be a tricky process when you lack the technicality and expertise to do so. This is why we recommend you consult a lawyer to ensure that you’re legally allowed to terminate your employees, and are in compliance with the employment laws and policies. 

3) Decide on the last day

It would help if you also decided on the last day of employment for the employees you’re dismissing with your Human Resource Department to ensure that ample time is given for the benefit of both parties

4) Proper compensation

In your letter of termination, you should explain how the employee’s benefits and compensation may be affected once they’re dismissed from your company. Take this chance to let them know what will happen to their life insurance, retirement funds, and healthcare benefits. The termination letter should also make note of the severance pay, payment for unused annual leave, or other payment owed

5) Refer them to other employment opportunities

If you’re laying off an employee for reasons unrelated to their performances and behaviours, referring them to other job opportunities will be a good gesture. You can also write them a good referral letter to increase their chances of getting hired in their next job

6) Include HR contact details

Before their official last day of employment, you need to assign them a specific HR representative by including the representative’s contact details so that they can ask questions related to their termination, including compensation, benefits, and other information

7) Formally inform them 

Last but not least, as a responsible employer, it’s only right for you to arrange a brief meeting with the employee to formally inform them of their dismissal before sending them the official letter of termination.

Here Are Some Termination Letter Templates

1) Termination letter with a cause


Dear [Name of employee],

This letter is to inform you that your employment with [Name of company] will be terminated as of [date of termination].

On [date of event], [cause of termination]. We provided you with a formal warning letter regarding the violation you have caused against our company’s policy.

On [date of event], [cause of termination]. You received a second warning letter and were informed that the third warning letter would result in your dismissal. 

On [date of event], [cause of termination], thus resulting in your termination.

Kindly be informed that your last paycheck will be mailed to your address at [employee’s address]. Your healthcare benefits will also remain in effect for [number of days] from your termination date. 

We request for you to return [company’s belongings] by the end of [date].

Please keep in mind that you have signed a non-disclosure agreement, which is attached for your review.

Should you have any questions regarding your details of termination, including compensation, benefits, and policies, please contact [name of HR representative] at [representative’s email] or [representative’s phone number].

[Your name]

2) Termination letter without a cause


Dear [Name of employee],

This letter is to inform you that your employment at [name of company] will end as of [date of termination].

For the past few months, [name of company] has faced financial difficulties due to the lack of work in our industry. We have tried our best to increase the need for labour, but unfortunately, our efforts have yet to bear any fruits. 

As a result of that, we have concluded that a total of 20% of our workforce must be reduced. We are regretful to inform you that your position is a part of this reduction, and this decision is final. 

You will receive your final paycheck after your last day with us, including the payment for the remaining annual leave. You will also receive a severance payment of [amount]. Please sign and return the attached claim document to ensure you collect this. 

Your healthcare benefits will remain in effect for [number of days] from your termination date. 

You are requested to return [company’s belongings] on your last day of employment. 

Please keep in mind that you have signed a non-disclosure agreement, which is attached for your review.

Within a week, a representative from the Human Resource Division will contact you to discuss details regarding your benefits. Should you have any questions regarding your details of termination, including compensation, benefits, and policies, please contact [name of HR representative] at [representative’s email] or [representative’s phone number].

Kindly accept our sincerest appreciation for your contributions during your time with [name of company].

Best regards,
[Your name]

Ask Yourself Some Of These Questions Before Making A Decision To Terminate Someone

1) Did his/her recent evaluations on their performance support the need for termination? Or does he/she actually have one or more evaluations where they actually meet or exceed expectations? If so, what has changed?
2) Have you clearly notified him/her of the issues that arise with their behaviour and/or performance? Have you also given him/her a fair chance or reasonable opportunity to correct the problem(s)?
3) Have you given fair warning to him/her that his/her job is in jeopardy?
4) Have you tried to discover and consider the employee’s reasons and side of the story?
5) Do you have adequate documentation to justify your decision for a termination?
6) Could you make an alternative decision, such as a transfer or a reassignment of him/her?
7) Is terminating him/her consistent with how you’ve treated other employees in similar circumstances?
8) Have you thoroughly and carefully investigated all the relevant facts?

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