【40 Termination Letters Template FREE Download】9 Key Elements about the letter of termination that can help you understand the letter properly.
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Termination, from an employment perspective, means when the job of an employee ends voluntarily or involuntarily. Voluntary termination means that the employee has themselves resigned from the organization or has retired. Involuntary termination means that an employee is terminated by the employer due to any justifiable reason. They are dismissed, fired or laid-off from the company. In this, employers are required to fill an employee termination letter.
A letter of termination is a form of letter that is used by companies or employers who want to terminate an employee due to their poor performance, incompetence, unacceptable behavior, layoffs, or any other reason. This letter is also known as the Letter to Fire an Employee and a Pink Slip
Key Points about Letter of Termination
An employee termination letter has certain terms and conditions which employers need to take care of. Let’s explore some key elements about the letter of termination that can help you understand the letter properly.
1 Name of the Company and Termination Date
The first thing employers need to ensure is the company’s name. Besides the name of the company, you need to write the date of the termination in the space provided. Both of these elements are basic and are written on top of the letter.
2 Reason to Terminate
The next step is to write the name of the employee and provide an appropriate reason for termination. The reason should be really clear and obvious. Generally, the reason is “for cause” and may be because of poor performance, misconduct, absenteeism and alcohol usage. After mentioning the reason clearly, you are also required to mention the warnings that were given to the employee, if any. These are the opportunities that a company provide to the employee to rectify their mistake. If an employee does not do so, employers have all the right to terminate them.
3 Outstanding Requirements
An employee may be entitled to loans and returns against the name of the company. They must pay back loans and everything else that is outstanding on or before the effective date of termination (written above). There is a section in the employee termination letter where you are required to write the details about outstanding loans. If there are no loans, you are required to provide information about the things which should be returned.
For instance, if an employee has a uniform, car, equipment, badge, paper work, documentation, credit card, or anything that was provided to them by the company during their work tenure, they are required to return all of that to the company. Employers have all the right to clearly write each and everything in this part. To include these details depends on the employer.
4 Benefits
Another most important thing that should be highlighted in the termination letter is that the employee will not be able to receive any benefits after or until the effective date. For instance, they will not be able to take advantage of causal leaves, annual leaves or vocational benefits. Additionally, they will also not be able to get the accrued salary and other amounts that are owed after the effective date. You also need to mention the date on which the employee would receive the final payroll.
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5 Health Insurance Coverage Expiry
The next step is to provide the expiry date of health coverage. It depends on the employee whether or not to keep the health insurance coverage. After the termination, employee can opt for this within 60 days only otherwise, employers will not consider it. Besides health insurance coverage, employee’s other insurance coverage would get expired on the effective date.
6 Amount of Severance
When the employee is about to get terminated, employers provide them with a severance package. This is the benefit that employee gets when they leave the employment. Basically, this exchange of payment is made so that employee keeps all the information confidential about the company. Employers can provide a severance package as a lump sum amount. Employers need to mention this amount if they are providing it to the employee. If they are not, there is no need to include this paragraph.
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7 Appeal for Termination
Employers can also give the right to the employee to appeal their termination. For example, if an employee does not find the termination fair or think that there could be something else done in this regard, they can write it down in this section. Employers can provide limitations to the employee in terms of providing them a number of days to make their appeal. If the employer does not want to provide the right to appeal regarding termination, there is need to add this paragraph.
8 Signature
Lastly, the employee is required to write the date, sign and return copy of the letter to the employer. It is the organization’s duty to ensure that the signed copy is also provided to the employee. When the employee signs the letter of termination, it ensures that they have agreed to all the terms and conditions.
9 Final Thought
Employers may find a need to write a termination letter when they are required to fire an employee. This letter confirms that the employee is going to be fired on the specific date. Additionally, it summarizes the information that the employee would require to know. It covers all the details about outstanding benefits, health benefits, coverage, the reason behind termination, provided warnings, amount of severance if the employer is willing to give etc. They can appeal for their termination (if the employer allows them to). Employer’s need to keep the copy of this letter with them so that they can use those records as they come in handy whenever required in the future.
Making a termination letter can be a daunting and complex process. How about looking at some sample termination letters?
You can also use the samples to save to your time and effort. All you need to do is to edit the details.