Termination Letter (Notice period)

Generally, a Termination Letter with a Notice Period is used to end the term of employment with an employee. Of course, terminating an employee is among the least favorite processes in human resources.  Essentially, it is even more fraught with risk if it is due to poor performance.  Thus, a simple termination letter should protect the employer from any risk of legal action.  Therefore, the fewer specifics that you provide in the letter, the less likely that a distraught employee can use that specific reason to challenge the termination. Simply by not supplying a reason for termination, the company can use any and all evidence to defend itself. 

What is in a Termination Letter with Notice Period?

In general, a termination letter with notice period 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 for Termination Letter (Notice Period)

Usually, in many companies, the employee will have various company resources to perform their daily duties.  These resources may include laptops and cell phones. Additionally, access to online accounts and resources. As well as other IP that belongs to the company that they will need to return.

Employer Responsibilities

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

When Should You Use a Termination Letter with Notice Period?

Typically, you should always use a termination letter with a notice period as a formal method of documenting a dismissal.  Whether it’s for poor performance or other reasons, ensuring you protect the company’s interests is the most important priority.  Thus, 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 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 an ability to rectify the behavior beforehand.  Additionally, if an employee makes attempts but with no improvement, make sure to collect proper documentation before holding a meeting to dismiss the employee.

Notably, you must always perform the dismissal in person.  And then either send the letter via email or hand it to the employee at the meeting.  In essence, having a signed version of the letter ensures that there is written proof that the employee has read and understood the termination.

What is a release of claims?

Release of Claims is a waiver or an agreement that us used by companies and businesses after employment has been terminated. It is signed by the departing employees and ensures that the company is thereafter released from potential litigation and future claims such as discrimination harassment and other similar issues. 

Conclusion

In summary, always use a termination letter as a formal means of dismissing an employee.  Also, keep the letter short and simple and without a lot of specifics. This is to ensure that the company can provide broad enough evidence in case the employee files legal action.  Finally, termination is never easy. Thus, 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
• Termination Letter (Payment in lieu)
• Employee Option Repurchase Agreement
• Share Appreciation Rights Plan
• Share Option Plan

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