Any business that employs a good number of people will face this task eventually; when you do, knowing how to handle the situation will help reduce your stress, even though it’s always difficult to terminate someone.
1. Indicate why you are terminating the employee. In the first sentence of your letter, explain that you are letting the employee go effective ‘date’. Most likely you have had a discussion or conversation with the employee prior to writing your letter; mention that as well.
2. Reasons for termination. It is essential that you clearly define why you are letting the employee go. List the reasons out, whether it is poor job performance, repetitive tardiness or conduct issues.
3. Company property. If the employee has any company property in his/her possession such as office keys, credit cards or a company car, state that they must be returned and clearly define a deadline for this to be done.
4. Explain further compensation, insurance, etc. Make it clear to the employee if they will be receiving severance, vacation or holiday pay, and that these payments will be made according to company policy if applicable. Also inform them when their insurance coverage will be terminated, so that they can look for their own coverage.
5. Make certain the employee signs the termination letter.
You want to make all details of the termination perfectly clear, so that the employee has no basis on which to sue the company after termination.
Sample termination letter
To: Employee name and social security number
While we regret having to take this action, your employment with our company (name company) will end on (specific date) due to the following reasons:
1. Reason 1
2. Reason 2
3. and so on
Explain in this area about any severance pay or other compensation the employee will receive, and that these payments are in accordance with company policy. Explain that the employee will need to look for insurance coverage as their coverage with the company will expire after the date of termination, or on (specific date).
Ask the employee to return any company property, explaining who to return it to and by what date.
Close your termination letter by explaining that while you regret the situation, it is a necessary action that must be upheld.
Employee signature __________________ Date __________________
Make absolutely sure that the employee signs the letter; otherwise it is null and void. Writing a termination letter is one of the most unpleasant tasks you face when you run a business, but there are circumstances under which it must be done. The guidelines above will help make this task a bit easier.