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Generally, 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. Essentially, you should write a simple termination letter to ensure that 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. Basically, by not supplying a reason for termination, the company can use any and all evidence to defend itself.
What is in a Termination Letter?
In general, you should keep a termination letter 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.
In many companies, the employer will provide the employee with various company resources to perform their daily duties. Usually, these may include laptops and cell phones; access to online accounts and resources; and other IP that belongs to the company that needs to be returned.
Essentially, the company will also need to list out any liabilities owed to the employee. Such as paying out remaining holidays and meeting other statutory requirements.
When Should You Use a Termination Letter?
Ideally, you should always use a termination letter 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. In essence, a formal termination or dismissal letter serves as a formal notice and historical record of the termination.
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
Before dismissing an employee, it is important to follow proper procedures. Firstly, ensure that you issue the proper warnings before the employee is formally terminated. In most jurisdictions, an employee must be given adequate notice of poor performance and the chance to rectify the behavior before termination. However, if attempts have been made but with no improvement, make sure that you collect proper documentation before holding a meeting to dismiss the employee.
Secondly, 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.
How do you defend poor work performance?
In summary, always use a termination letter as a formal means of dismissing an employee. Keep the letter short and simple. Ensure there are not a lot of specifics so 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
- Share Option Plan
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