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The Basics of Writing a Termination Letter

written by: John Garger•edited by: Michele McDonough•updated: 1/11/2011

Writing a termination letter is not something employers look forward to. However, knowing how to write one makes it easier when the time comes to fire, layoff, or terminate an employee. Learn how to write a termination letter the right way.

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    Letters of Termination

    Writing a letter of termination is never an easy task. Before you write one, it is important to talk to the employee. This way, you can clear up misconceptions or you can suggest ways for him or her to improve. Also, make sure to document these conversations. Termination should be a last resort to ending a working relationship.Termination by Christian Sherratt from 

    If problems with the employee cannot be resolved, then the next step would be to ask the employee to resign. This is a better option than having a record of termination in the employee's file. If resignation is not an option, then you have no other recourse but to write a termination letter to formally end the working relationship.

    How to Write a Letter of Termination for an Employee

    These are the steps that you should take when writing a letter of termination. Keep in mind that a termination letter is a legal document. It becomes evidence if the employee files a lawsuit against you. Take necessary caution in wording your termination letter because its contents may be taken out of context and used against you. When in doubt, get legal advice before sending the letter. Generally, the shorter the letter, the better.

    1. Stick to Facts. Do not use emotional words like “I am sorry”. Instead, approach it in a rational manner, delineating the facts as they are. Lengthy explanations may not look good and may make you appear defensive. Mention the warnings that you have issued in the past to show that the employee has been repeatedly warned. Relate the warnings in arriving at the decision to terminate the employee.

    Cite specific reasons for firing an employee. It is good to mention behavior problems, the specific instances they failed to meet expectations, and the dates the problems occurred. For this reason, it is important to document employee warnings as they occur. Finally, mention in the letter the effective date of the termination and the discussions you had with the employee pertaining to termination.

    2. Terms and Conditions. Refresh the employee’s memory regarding the terms and conditions related to any employee contracts signed. This makes it less likely that the employee will leave confused about the termination. It also reduced the chances that he/she will seek legal action for wrongful termination.

    This is particularly necessary if the employment contract contains nondisclosure agreements, sensitive information, and other important clauses. It is also important to include a reminder about nondisclosure and other agreements in the termination letter. In case the employee breaks the agreement, you can take legal action and be able to produce a letter that shows the employee understood the terms of the agreement.

    3. Financial Information. The letter of termination should mention all pertinent financial information such as final paychecks, severance package, or continuance of health benefits. If needed, the termination letter should also explain retirement accounts or insurance policies and mention who can help in the transfer of these benefits.

    A termination letter is a legal document that explains the terms and conditions related to a termination, firing, or layoff. Treat it as such and you will be less likely to end up in court defending your choice to terminate the employee.