This Employee Termination Letter can be used in nearly every situation where it is necessary to notify an employee that their services are no longer needed. Irrespective of the nature of the relationship between the Employer and the employee, it is very often a wise decision to provide this information in writing. There are predetermined areas on this form for basic information (such as the employee's identity) and an area to address the employee directly regarding the termination reason. Employment Separation Agreement: A written contract outlining the terms, such as severance and the employee's rights, following termination.
Terminating an Employee: A Guide
The act of terminating an employee can be a daunting task and often leads to the employer being taxed by the Unemployment Insurance system more if the reason for the termination isn't valid. It is therefore recommended that all terminations or layoffs are handled civilly, with the cause of the departure being explained to the employee. To terminate an employee in a mutually beneficial way, follow the instructions below.
What Is the Effective Notice Period for the Employer?
Employees and workplace situations differ. In the case of a polite and cordial termination, the employer may ask him or her to stay for two (2) weeks so that a replacement can be trained.
In some cases, termination should be initiated sooner rather than later if there is concern that the employee could become hostile or a danger to their colleagues. This will best serve all parties in order to make a rapid and easy transition.
Choosing the Right Day to Fire an Employee
This will depend on the individual employee. Ideally, the firing should occur at the beginning or middle of the week in order to benefit the employee. In this way, the individual will have sufficient time to seek alternate employment during regular working hours.
If the employee has a history of erratic behaviour, Friday and the end of the day are recommended times. Employers can use this strategy so a terminated employee has time to gather their things without watching former colleagues.
Notify the employee that he or she will be terminated
Termination should be handled in person if the employee can access the workplace. The employer will likely request access to all types of premises (e.g. keys, fabs, etc.) that must be delivered.
For employees working as freelancers, teleworkers, or remotely, it is recommended to use the employee termination letter (Download).
Finalize Payroll and Benefits
Payroll: All payments to the employee must be ended by the employer. The payroll service must be notified in case of a severance.
Benefits: Terminate or transfer all benefits related to the employment.
- Health Insurance: The terminated employee will be responsible for obtaining short-term health insurance coverage independently.
- Retirement Benefits: 401(k) accounts can be transferred to IRA accounts at a bank. The employee should discuss their options with their insurer to discontinue or transfer all insurance coverage to the employee’s (if necessary) account if it is not feasible.
At-Will vs Employment Contract
A contract employee may be terminated if the conditions of the contract have been met. Certain contracts may require the termination of an employee beforehand at the discretion of the employer (business necessity) or for reasons such as performance issues, violating confidentiality agreements, or violent behaviour. A contract may contain other specifications that guarantee the employee won't be terminated regardless. At-will employees are able to be terminated for any reason without prior notice by their employer. Even in a situation of at-will employment, there may be local laws that protect the employee, depending on how the termination takes place.
Ensure there is no discrimination
Although contract and at-will employees may be terminated at any time, state and federal labour laws must be followed. Employers are prohibited by state and federal laws from terminating an employee on the basis of discrimination (i.e., age, gender, gender identification, race, religion, national origin, the status of pregnancy, sexual orientation, disability, etc.). An employee who believes that their job termination is illegal may consult a lawyer to determine whether it was justified. An employer who is found responsible for wrongful termination can be penalized, sanctioned, or fined.
The following are the essential sections that should be included in an employee termination letter. Though a straightforward letter, it should be treated with caution and thoroughness.
- Name of the terminated Employee
- Address and other contact information of the employee
- Letter introduction…. Dear …..
- The date the termination will be in effect
- The name of the company/employer
- Clear reason/s for the termination
- Language indicating “no hard feeling”...” I wish you the best in finding new employment.
- Signature of the employer/company representative/HR