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Employment Contract Termination Letter

Some organizations hire employees for a specific purpose and for a specified period. When employees are hired under these types of conditions it is generally done so with an employment contract. Although the name implies a legally binding document, either party may terminate the contract at any time with an employment contract termination letter.

Format and Content

Begin the letter with a clear and concise purpose statement. If the contract is being terminated for cause you may say so, as long as you have evidence to back up your claims. Alternatively, you may leave out a reason, especially if the contract has an ‘at-will’ or ‘Termination for Convenience’ clause. The employment contract termination letter format includes the date written, the effective date of the contract termination, a request for the return of company property, and the date the employee will receive his or her last paycheck.


In this employment contract termination letter sample, the hiring manager informs the employee that her contract with the company will be terminated early due to a lack of business. He ensures the employee that the company is satisfied with her work and encourages her to apply for open positions in the future.

Dear Janet,

This letter is in reference to your employee contract that is set to expire on June 1, 2013. Your contract calls for an option to renew at our discretion. Although we are very pleased with the quality of work you have submitted, we have decided not to renew your contract at this time. Unfortunately, due to slow work conditions, we are forced to end the contract 3 weeks early. Please be advised that your employment status with Avery and Avery Productions will be terminated as of May 15, 2013.

On your last day of employment, you will receive your final paycheck. Due to your contract status, you are not entitled to benefit pay. As per the termination clause contained in the contract, you will be paid for an additional 2 weeks of work. This pay will be included with your final paycheck. You will receive a package by mail that will explain any other pay or benefits to which you are entitled.

Please return the following company property that is in your possession on or before May 15, 2013: a laptop computer; a widescreen monitor; a keyboard and mouse for the computer; a Canon printer; and ink and paper supplies. As of today, your passwords to all client accounts have been disabled. Over the next 2 weeks, you will be assigned tasks that do not require your access to proprietary information. This has nothing to do with our confidence in you; it is simply mandated by company policy. You may turn in your identification badge on your last day of employment.

Your work warrants a letter of recommendation and I will be happy to supply you with one upon your request. You may also ask for letters of recommendation from the other managers you have worked for in this organization. If you have any questions, please feel free to call me at (555)-555-5555. I invite you to check our website often and to reapply for any new contractor positions that become available. I wish you all the best.


Alex Stephenson

Alex Stephenson

General Manager

Avery & Avery Productions