Termination Policy Examples: Drafting Letters of Separation

What is termination?

Termination is an act signifying the end of an employee’s working contract with a company. There are several reasons an employer might choose to end their working relationship with an employee. You might encounter the following termination types as an employer:

Voluntary termination: in voluntary terminations, an employee may have reached the end of their employment contract, like with seasonal workers who agree to work for a company for a pre-determined length of time. Similarly, an employee who retires or resigns might fall into the category of voluntary termination.
Involuntary termination with cause: employee dismissal might be necessary for performance or compliance issues. For example, a company might ask an employee who doesn’t adhere to company policies despite warnings to leave after repeated violations.
Involuntary termination without cause: involuntary termination can refer to situations like lay-offs, where employers dismiss their employees because of an economic recession, a department downsizing, or closure.

In Canada, it’s often illegal to release someone from work without reason, so understanding the distinction between termination types is essential. Likewise, employment contracts often cover policies employees must follow to remain in good standing with their company. Documented failures to abide by those policies can cause involuntary termination.

What is the termination process for employees?

Every company has a designated process they follow when terminating employees, ensuring the process is conducted as smoothly and respectfully as possible. While larger companies hire lawyers to handle the termination process, others lean on the professionalism of their HR team. As an employer, it’s essential that you witness the termination process in person, or at least ensure someone from HR or company management is there on your behalf.

Dismissal process requirements often include the following steps:

Identify the reasons for the termination. The first step is to analyze and identify why the employee is being let go. It’s crucial to ensure the reason is legitimate and, if necessary, legally defendable.
Draft the letter. The next step is to draft the termination letter. Try to keep the document concise, sensitive, and in line with the legal requirements outlined by HR or your lawyer.
Meet with the employee. The best way to issue a termination letter to an employee is to set up a meeting with them. This meeting can differ greatly from a standard exit interview. During the meeting, you’ll briefly explain you’re letting them go and give them a printed copy of the termination letter.
Inform the employee’s department. The next step you need to take is informing the employee’s colleagues and discussing how their workload will be distributed. Once that’s done, consult with HR or your legal team on the best way to file documents like the employment contract, termination letter, and any other documentation relevant to the employee securely.

What should a termination letter include?

Since the termination letter serves as the official notice an employee is being let go from the company, it’s important to meet the minimum legal requirements regarding its content. Your HR team or legal council may have specific requirements for formatting and composing termination letters. Most termination letters should include:

The name of the company
Details of the employee being terminated, including their full name, department, and title
Name of the direct supervisor of the employee
Name of the HR representative managing the termination and the exit process
Date the letter is being issued
Date the termination takes effect
Reason for the termination
Details of the cause, if applicable
Information about the severance package being provided to the employee, if applicable
Any company-owned benefits in the employee’s care that need to be returned

Sample letters of separation

It’s vital that your termination letter is professional, concise, and detailed. You may need to use a different style of termination letter for voluntary and involuntary termination. This is because the format and tone of the letter can change depending on the circumstance.

Voluntary termination letter example

July 12, 2020

Dear John Rye,

This letter informs is to inform you that we have decided to end your employment contract. Hence, your services are no longer required at The Wavewood Group past the 31^st of July, 2020. We are outsourcing the tasks performed by your department to a specialized agency beginning next month.

We request you complete all the projects that have been assigned to you by the end of the month, as you will no longer have access to our servers from the 1^st of August, 2020. Please also submit any pending invoices before this date, and the accounts department will clear them after ratification by the HR department. Thank you for your hard work throughout this contract. Please contact me with any questions you may have.

Sincerely,
Peter Smith
Customer Relations Manager
The Wavewood Group

Involuntary termination letter example

July 12, 2020

Dear Jane Salmon,

This letter informs you that you are being terminated with cause, effective immediately. This termination is occurring because you have breached the terms of your contract by sharing confidential information with individuals outside the company. This breach of contract gives us the right to expel you from the company without notice, and we are exercising that right.

Please note that as of this moment, you will no longer have access to the company servers. This month’s salary will be paid to you in full at the end of the month. Kindly return all company assets provided to you as a part of your position, such as the company laptop, printer, and mobile phone. Thank you for your service.

Sincerely,
Jack Spanner
CEO
The Wavewood Group

Termination policy FAQs

Why do I need to document the termination process?

It’s essential to document the termination process whenever an employee is let go because you may need to refer to your documents at a later date. Keep letters and other supporting materials on file and within easy access. This documentation ensures you have evidence of rightful termination in the event of legal proceedings.

What offenses result in a termination?

There are typically two cases where you’re within your right to dismiss an employee. One instance is if the employee has violated company policy repeatedly and continues to do so despite multiple verbal and written warnings. Other causes for termination could include the employee doing something that endangers the company’s reputation or security, such as committing fraud.

How should I give a termination letter to an employee?

Many employers choose to administer termination letters via email. However, in exceptional cases, such as a redundancy, an employer may choose to set up a meeting with the employee and provide the employee with a printed letter in person. The way you choose to deliver your letter can depend on the reason for their dismissal, your relationship with the employee, and the length of their service at your company.