Termination Letter | Meaning and Definition

What is a termination letter?

A termination letter refers to a formal document handed over by an employer to the employee at the time of his/ her termination from the company. It acts as an official notice to inform the person of the end of the employment contract. A termination letter is also called a notice of termination.

The letter of termination entails the manager’s name, employee’s name, designation, and the ground of termination. Mentioning the causes of termination can be utilized as proof that an employee was dismissed on legitimate grounds. However, a letter of termination is not a potential defense against unjust termination litigation. A termination letter may often include a summary of the events or facts that triggered the decision of dismissal and disciplinary action or warnings that were given prior to termination.

In case the employee owns any of the company’s property, a termination letter must state it and also deliver instructions for giving it back. And at last, a letter of termination should also involve the instructions about who the employee needs to contact to ask related queries or for follow-up. The contact details of the person with whom an employee needs to get in touch must also be mentioned clearly.

There are several grounds that qualify the act of terminating an employee, such as poor performance, irresponsible behavior, workplace misconduct, company being at a loss, etc. If an employee misbehaves or performs badly at work, a company must consider warning or arranging Performance Improvement Programs (PIP) before resorting to the action of termination of services.