Notice of Termination by Employer

Essentially, a Notice of Termination by Employer is an important document in the arsenal of any business. However, terminating an employee is among the least favorite processes in human resources. Additionally, it is even more fraught with risk if it is due to poor performance. Thus, you should write a simple termination letter to ensure you protect the employer from any risk of legal action.  Therefore, the less specifics that you provide in the letter, the less likely that a distraught employee can use that specific reason to challenge the termination.  Importantly, by not supplying a reason for termination, the company can use any and all evidence to defend itself. 

What is in a Notice of Termination by Employer?

In general, a termination letter should be kept short.

Date – Specify the date when this letter was delivered

Last Date of Employment – Provide information on the last working day for the employee.  Ensure that the last date of formal employment adheres to both the applicable employment laws and the actual employment contract signed by the employee

Employee Responsibilities

Typically, in many companies, the employee will have various company resources to perform their daily duties.  Generally, these may include laptops and cell phones. Also, access to online accounts and resources. Additionally, other IP that belongs to the company that the employee needs to return.

Employer Responsibilities for Notice of Termination 

Essentially, the company will also need to list out any liabilities it owes the employee. This includes the remaining holidays the employee needs to take. Additionally, other statutory requirements the employer must meet.

When Should You Use a Notice of Termination by Employer?

Generally, a termination letter should always be used as a formal method of documenting a dismissal.  Whether it’s for poor performance or other reasons, ensuring that you protect the company’s interests is the most important priority. Typically, a formal termination or dismissal letter serves as a formal notice and historical record of the termination. Additionally, if the termination is because of cause or poor performance, make sure to follow proper procedures.

Make Sure to Follow Procedures for a Smooth Transition

Importantly, before dismissing an employee, you must follow proper procedures. Firstly, ensure that you issue the proper warnings before you formally terminate the employee. Typically, in most jurisdictions, an employee must be given adequate notice of poor performance and the chance to rectify the behavior before termination.  Additionally, if an employee makes attempts but with no improvement, make sure you collect proper documentation before holding a meeting to dismiss the employee.

Always perform the dismissal in person.  And then either send the letter via email or hand it to the employee at the meeting.  Having a signed version of the letter ensures that there is written proof that the employee has read and understood the termination.

Conclusion

Always use a termination letter as a formal means of dismissing an employee.  Keep the letter short and simple and without a lot of specifics to ensure that the company can provide broad enough evidence in case the employee files legal action.  Finally, termination is never easy; be cordial and offer to help the employee during the transition process.

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Along with this document, make sure you see these other templates in our library:

• Shareholder Agreement
• Option Agreement
• Employee Option Repurchase Agreement
• Share Appreciation Rights Plan
• Termination Letter (Notice Period)

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