A bad worker can damage your growing business. It’s not easy to find workers you can trust, even if they are obedient. This is why it is necessary to terminate employees who are toxic. They are a roadblock to your company’s future, affecting the overall office environment and the morale of your other employees. However, terminating an employee can be a difficult task as it has several technicalities and documentation associated with it. You can also checkout our termination letter sample, It’s 100% FREE.

There are many reasons to fire an employee, but the two most common reasons are due to their poor performance and disciplinary issues. While the majority of performance-related issues can be resolved through training, there are some issues that you will find that you cannot fix by offering additional training. Let’s understand the nuts and bolts of this termination letter.

Before we go into the details of the employee termination letter, let’s help you understand what a termination letter is. The job of an employee ends involuntarily when the employee is fired. This means that the employee has himself resigned from the organization or has retired. If you are fired for no reason, this is considered to be involuntary termination. Some employees are dismissed, fired or laid-off from the company. If they are, the employer is required to fill out a termination letter.

A letter of termination is written to inform an employee, by law, about his or her dismissal from the company. It will include the date on which the termination will take place and a description of why the dismissal is taking place. On top of that, you would need to know the employee’s name and basic information like the place of employment. If you have an employee who is consistently doing a bad job, this letter is for you.

The Best Employee Termination Letter

When do You Necessary an Employee Termination Letter?

Many organizations fail to tolerate even the smallest of mistakes. Even the smallest of lies or untruthfulness can result in the termination of employment.

An Employee Cannot Perform the Job
Employers typically invest a lot of money on training employees. However, if employees cannot do the job properly and are incompetent, doing so means that they should be terminated. Some companies often give leverage and decide to change employees’ positions in hope of resolving the issue. If an employee hasn’t become more proficient at their job after several months, then it’s time to let them go (rather than wasting money on them).

Employee Cannot Adjust to the Culture of the Company
Ideally, all employees must fit in the environment of the company. A good employee is able to adapt to a diverse environment and welcomes all kinds of thoughts. They know how to redesign the business on the fly to maximize profits. If a new employee cannot adapt to the values of your organization, then it’s time to fire them.

An employee has violated the company’s code of conduct
Some organizations have some rules and regulations which automatically make the organization expect that all of their employees will follow them. Employees must act ethically under the code of conduct. They are required to develop relationships with customers as per policy and treat each and every co-worker respectfully. If the employee exhibits any of the following signs, you must let them go.

  • If the employees harass or bully a co-worker
  • If the employee accepts gifts from a vendor or customer that either exceed or do not come under the gift policy guidelines.
  • If an employee is caught accepting or offering an illegal bribe to or from a vendor.
  • If an employee comes to work and does not do most of their assigned tasks during work hours, you can not be assured that this employee is working on tasks that will help the company grow.


An Employee is Found liable for Theft
Employees have no right on a company’s property. But some employees take advantage of companies by stealing from them. Employees are stealing small things from the workplace, and it’s a big problem because of what you’re missing out on. Employers have the right to punish employees for theft either by termination or by legal proceedings. Companies ensure that they keep proper financial records, including reconciling statements and regular audits, to catch mistakes quickly.

An Employee Fails to Keep Commitments
Employees should keep their commitments. They have both small and big commitments to the organization. An employee needs to ensure that he or she is on time for work and also completes the project quickly. At times, employees may miss deadlines but it is not possible for them to miss all their deadlines. A good employee will keep their bosses updated if they are unable to perform the tasks on time. However, if an individual doesn’t do this and keeps their boss in the dark, it’s time you should know that you should give them a letter of termination.

Here are some common reasons that may result in termination of any employee. Anything that is disrespectful or unprofessional is not acceptable. If you feel your employee is not good enough, you should provide the employee with more training or opportunities to demonstrate his/her skills. If after that, you still feel the employee is not good enough, you should let him/her go.

Termination Letter Sample

What information do you need to prepare the letter of termination?

Just as a removed splinter can provide relief, letting a bad employee go can provide relief to you. And when you fire that employee, you need to handle things professionally and give them a copy of your treatment. If the employee is being terminated, you should let them know why. One piece of information that you will need is the basic information of the employee whose termination you are considering. You need the name of the employee who will be terminated, along with the name of the person who is handling the termination, and the name of the company. Moreover, termination date should be written in the letter of termination.

Here are some important things to remember about this letter of termination:

Employers should be aware of certain terms and conditions before firing an employee. Let’s explore some key elements of the letter of termination to understand it better.

Insert name of your company and the date on which the employment ended
The first thing employers need to ensure is that the company name is recognized by the target audience. Besides the name of the company, write your date of termination in the space provided. These two elements are basic and they are written on top of the letter.

Reason to Terminate
The final step is to fill out the name of the employee and the appropriate reason for termination. Your customers will be more likely to use this product if the reason is clear and obvious. Some employees are fired for poor performance, misconduct, absenteeism and alcohol usage. After that, you are required to state the penalty for breaking the rule. If no penalty is given, one should be created. After an employee makes a mistake at work, they’re given one of these opportunities to fix the problem. Employers have all the right to terminate an employee who fails to do so.

Outstanding Requirements
An employee may be entitled to loans or returns that are guaranteed by the company. They must pay back loans and everything else that is outstanding on or before they stop working. The employee termination letter must be completed by the employer and state the reason for termination. If you want to ask for a loan, you first need to provide some documents and information about the things which should be returned.

If you’re searching for an example of an employee uniform, car, equipment, badge, paper work, documentation, credit card, or anything that was provided to them by the company during their work tenure, search online. An employer may specify any details or requirements he feels necessary in this section. The employer’s decision depends entirely on his discretion.

The employee will not be able to receive benefits after or until the effective date. For instance, they will not be able to use the one year of unpaid leave which is provided by law or take advantages of retirement benefits. Furthermore, they will not be able to get the accrued salary and other amounts that are owed after the effective date. In addition, you need to state the date on which the employee would receive the final payroll.

The expiry date is approaching for your health insurance policy
Once you have verified your identity, the next step is to provide the expiry date of your health coverage. The decision whether to keep the health insurance coverage largely depends on each employee. After the termination of your employment, you must send us this within sixty days, otherwise, we will not consider it. Besides health insurance, the employee’s other insurance will get expired on the effective date.

Amount of Severance
When an employee is about to get terminated, employers are required to provide the employee with a severance package. This is the potential benefit to the employee if he/she quits working and starts his/her own business. Basically, this exchange of payment is made so that employee will keep confidential any information about the company. Many employers will give employees a lump sum amount of money as a severance package. Employers need to declare this amount as part of the employee’s income. If the answer to the question above, is no, do not include this paragraph.

Appeal for Termination
Employers can also allow employees to appeal their terminations. For example, if an employee does not think that they should be fired or if they think there could be an alternative, they can write it down in this section. Employers can give the employee only a few days to make their appeal  before they make a decision. If the employer does not want to provide the right to appeal regarding termination, there is a need for this section.

Lastly, the employee has to write the date, sign and return copy of the letter to the employer. The organization should ensure that the signed copy of the agreement is provided to the employee. When an employee signs the letter of termination, it confirms that they understand and agree to all the terms and conditions.

Contract Termination Letter

Ending Thought

Employers will need to write a termination letter when they fire an employee. This letter confirms that the employee will be fired on the specific date. It also lets you submit a summary that can be printed out for the employee to review. It contains all the details about benefits, cover, reason behind termination, warnings given, amount of severance. If the employer allows it, employees can appeal for their termination. Employers, please keep this letter with you and use the records as they become necessary.

The process of making a termination letter can be overwhelming, and the most important part is to include every detail that’s needed. How about checking out some sample termination letters? You just need to edit the details. We have a number of employee termination letters and contract termination letters for employees and companies, which are available for your review. You can also save your time by downloading free letter of termination samples from our main website.