Termination Letter

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Termination of an employee, with or without "cause", for reasons related to the employee's performance or the company's, has causes and consequences that need to be reviewed closely before issuing, accepting or disputing a termination letter and the termination itself. The letter is not only a notification; it is also a legal document, with implications that may linger or appear long after its issuance, e.g., in an eventual "wrongful dismissal" suit brought by the employee months after the fact.

A termination letter issued "without cause" may be proper at one stage of employment, e.g., probation period, but not at another. A request for an opportunity to resign may be granted, even when there may be no right of resignation, in lieu of a termination letter. Of course, it is very important to ensure that a termination does not suggest the employee has been fired, when in fact the dismissal is a lay-off (due to a lack of work, closing of the business, downsizing through merger or acquisition).

It must be noted that so-called "employees-at-will", viz., those without employment-contract dismissal terms and clauses, may be especially vulnerable to termination without cause or notice.

No employee accepts a termination letter cheerfully, even if only because being denied any choice on something so important grates on us. Hence, when issuing one, an employer should have two prime objectives: to terminate the employee and to do it with minimum damage to either party.

Basically there are two types of letters written as notice of termination. The content is driven by the purpose of termination. The first kind of letter deals with the termination of an employee due to employer demand-side issues, e.g., bad employee attitude, absenteeism, moral or legal misconduct and/or productivity problems. The second kind of letter deals with termination due to an employer job supply-side issue, e.g., a crisis faced by the organization that forces layoffs.

In the later situation, sometimes wholesale layoffs are required, with each employee getting a termination letter. Whatever the reason for termination, these letters must be crosschecked for legal obligations by the human resource division of the office. Different countries have set different regulations. If not in compliance, the notice of termination can trigger litigation, which can be costly.

As soon as the termination is approved and cleared, an authorized supervisor should speak directly to the worker slated for termination. Sometimes a frank discussion can iron out problems. Otherwise, as a face-saving tactic that can boost the odds of the employee's being hired elsewhere, "voluntary" resignation can be considered. Given the choice, many employees will accept that option, even if only, once again, to retain a sense of control and power to choose. Of course, if the employee balks at accepting the offer to resign, termination becomes the only option.

Caution must be exercised in writing and reading a letter of termination. Unfortunately, "This is to inform you of your dismissal effective December 6th..." may not connote the same thing to different parties, since it is ambiguous-possibly meaning firing, or, instead, a lay off". This kind of confusion may have implications for eligibility for unemployment benefits in some jurisdictions. So, both employee and employer must ensure that the letter is unambiguously clear about the form, if not the reasons for the termination.

Various termination scenarios are possible, while others are prohibited; for example, in Canada, no employee can be terminated while on leave, if the reason for the leave is cited as the reason for the termination, e.g., pregnancy. On the other hand, an employee can be terminated "without cause" or notice, if the termination falls within the provincially-specified period that allows this, usually three to six months. Hence, before issuing a termination letter or accepting one, always determine whether the termination is in full legal compliance.

Whether or not there may be an unintentional waiving of any right to litigate against an employer for wrongful termination after accepting a termination letter by registered mail is one of many termination-related matters to discuss with a lawyer in the jurisdiction governing the termination.
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