What is a termination letter?

A dismissal letter is a formal notice that informs an employee that he or she will be dismissed from his or her current employment. A clear letter of dismissal can help the departing employee comply with internal human resources policies, protect the organization, and ensure a smooth transition.

Is a termination letter necessary?

For the most part,  the Federal Labor Standards Act (FLSA)  does not require organizations to provide termination letters. Exceptions occur when employees are part of a union, collective bargaining agreement, or certain mass layoffs or corporate closures. Other employees are ""at-will"" employees, which means either the employee or the employer can choose to terminate employment.

How does the type of dismissal change the termination letter?

The termination letter must state the circumstances of the termination. Employers generally have three circumstances in which they can fire employees:

• Reasons include:  An employee's performance or behaviour does not meet expectations or violates the employer's code of conduct.
• Without cause:  The employer terminates the employee due to broader market factors, such as staff reductions due to a lack of revenue.
• Termination of contract:  An employer who hires a short-term employee decides not to renew the employment contract beyond the initial term.

What should a termination letter include?

The termination letter should include the following:

• end date
• Reason for termination
• Explanation of next steps for compensation and benefits
• List of company property that employees must return
• Notification of agreements signed by employees, such as non-disclosure agreements
• Human Resources contact information for further questions

Why should an employer write a dismissal letter?

Termination letters serve two main purposes: they help employers keep a record of termination decisions, and they give employees the clarity they need to begin transitioning to the next stage of their careers. Better relationships with departing employees also help employers protect their reputation as potential candidates check employer review sites for former employees' opinions. And in the event of a legal challenge, having a termination letter with all the details of the termination can help employers document the reasons for termination and prove that they gave the former employee proper notice.