In business, it's inevitable that at some point you'll be faced with firing an employee. Drafting a letter of termination for the employee to sign that outlines the reason(s) for the termination can be critical. An employee who fights a termination can cost a business thousands of dollars. To protect your company, the letter should completely explain the reasons for termination, any severance the employee is being offered and the status of any company property currently in the employee's possession.
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Begin the letter with a statement indicating that you are letting the employee go. An example would be: "Pursuant to our conversation on 12/12/09, the XYZ Company is issuing this letter of termination, effective 1/02/10."
State the reasons for termination. These generally fall into three categories: poor job performance, conduct issues or redundancy. Clearly outline the reason(s) for termination, providing specific examples.
Outline any company property the employee has in his possession. If he has a company car, credit card or any other assets such as equipment, state clearly that he must return them to the company by an agreed upon date. If there are outstanding expense reports that need to be paid, include them in this list as well.
Detail severance pay he will receive, any paid vacation or holidays included in the severance package, and information on how he can continue his insurance through the Cobra program. Note the amount of his 401k package as well..
Go over the ways that the employee can appeal the decision, if applicable. If you are in an "at will" state in which you are not legally required to provide two weeks' notice, state this in the letter. If you are giving him two weeks to terminate, make sure that you provide the exact date of his last day with your company.
If the employee is being terminated due to redundancy or capital issues rather than for poor conduct or performance, let him know that you are willing to write a letter of recommendation for him. Have the letter of recommendation ready for this meeting.
Leave lines at the bottom of the page for both signatures and the date. Attach any additional paperwork that is relevant to the termination, such as documents supporting the dismissal. Sign and make copies for your records.
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