Things to Consider When Drafting and Sending a Termination Letter

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If you've decided to terminate an employee, whether it's mutual or not, a termination letter template can help you do that while still protecting your company and your rights. You want to make sure the termination is handled in the appropriate legal way, too, in order to reduce risks in the future. Here are a few of the things you'll want to consider carefully.

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When your company has a good termination letter template, it can handle the issue of letting an employee go more efficiently. In many cases, the termination is a mutual decision. But it's still a good idea to have a letter. It spells out any requirements that either party still has, such as confidentiality, pay that's still owed, or other concerns.

Here, we'll be discussing:

  • Important Termination Letter Clauses
  • Best Practices for Termination Letters
  • Tips for a Secure Termination Letter
  • Key Considerations for Termination Letters
  • Related Sources for Additional Information

Important Clauses in a Termination Letter

A termination letter template isn't just a basic "you're fired" type of letter. Instead, it spells out the rights and responsibilities of your company and its employee, as you end your working relationship with one another. Because of that, a termination letter should have clauses that deal with:

  1. Identification of the Parties -- Both parties to the agreement should be clearly stated, in order to avoid any confusion.
  2. Identification of the Agreement -- What type of agreement is ending should also be clearly stated, as this reduces any potential for legal risk.
  3. Satisfaction of Terms -- Stating that the terms of the agreement have been satisfied is relatively common in a termination letter.
  4. Mutual Release -- Both parties agree to release one another from any and all obligations related to their previous agreement.
  5. Any Unique Situations -- If there's a non-compete that remains in effect, for example, this kind of ongoing obligation should be included in the termination letter to reduce any risk.

With proper clauses in your termination letter template, you can feel confident that you're covering all the important areas as you part company with a former employee. Whether they worked there for years or they were a shorter-term employee, making sure their termination is handled the right way can be important for the future health of your company.

Termination Letter Best Practices

Choosing a quality termination letter template can really help your company have peace of mind. It will also help to ensure that all of the important areas have been handled during termination, so there aren't any "loose ends" hanging around after an employee leaves. When you're working with a termination letter template and drafting the letter for your employee to sign, make sure that the letter you're creating addresses:

  • The specifics of the type of relationship you had.
  • Any expectations or requirements that continue beyond termination.
  •  The understanding that there is a mutual release of liability, claims, and other considerations.

When someone has worked for your company, treating them with respect when they leave is always the professional thing to do. Whether they were a good employee or not, the paperwork should be the same. By using a termination letter template, you show the same courtesy and process for all employees, which helps to keep everything uniform, legal, and professional.

Provide a Secure Termination Letter

You don't have to be in the same room, or even in the same country, to handle a termination letter with an employee. Instead, you can handle everything electronically. That's often more secure, which makes it a popular choice. The best way to do that is through the use of Nitro Sign for your termination letters, contracts, and other important documents. Electronically handling your company's termination letters can help with legal protection and peace of mind.

Key Considerations for a Termination Letter

A termination letter template can be an important part of doing business. Most employees don't stay with one company forever, so you should expect to need a termination letter from time to time. A template helps make the process easier, so your company and the employee can move on. To make the process smoother, consider:

  • Clarity on the names, dates, position, and relationship between the employee and your company.
  • Any specific information about ongoing requirements, such as a non-compete agreement for a set period of time.
  • A mutual release of liability and responsibility, to allow moving on more easily.

With a termination letter template, your company and any employees who leave it can feel better about the decision.

Additional Sources of Information

To find out more about termination letters, consider checking out these sources.

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