Employment Termination Letter

People are the making of a business, however, it’s a natural part of the working world to lose members of the team along the way. While some employees will leave of their own volition, others will leave the business for other reasons. Whether that’s due to poor performance, misconduct, or redundancy, you’ll want to have a termination of employment letter to hand. As an employer, it's up to you to ensure the process is legally airtight.

Why do I need to use an employment termination letter?

While it is not usually a strict legal requirement to have a termination letter, (although often employment contracts will state that notice of termination needs to be in writing) it is important for several reasons. Arguably the most important reason from an employer’s perspective is that it provides certainty. Even if you are entitled to verbally dismiss an employee, it is always a good idea to follow it up in writing in the form of a termination letter. It will remove the risk that an employee could try to argue that they were not dismissed, or that their employment terminated on a different date (which can be difficult in terms of final pay if it is not clear).

It can help make the transition smoother if the employee understands, for example, that they will be paid in lieu of notice, or that they have taken more holiday than they were entitled to (in which case their final pay package might be less than expected). Most employment contracts will contain obligations to return company property as well as ongoing obligations of confidentiality, so it can be helpful to remind the employee of these points in a formal letter.

What are the risks of not using a termination of employment letter?

As we touched on above, we always advise our clients to use a termination of employment letter when dismissing an employee (for any reason). In the event of a claim against you, any ambiguity will usually be interpreted in the employee’s favour, so it is best to be completely crystal clear about the termination of their employment. Ideally, you will have had legal advice throughout the process of dismissing the employee and understand everything that you need to do to minimise legal risk.  

The termination letter helps to minimise the risk of any disputes that could have been avoided by the employee simply understanding what happened, what to expect and why.  

How can we help?

As employment law experts, we understand the importance of tactful and pragmatic advice. We’ve helped countless companies through challenging conversations, and when needed, we’ve worked with employers to craft legally compliant termination of employment letters that they can rely on.  Having expert legal guidance throughout the process can be the difference between a crystal-clear termination, and one that grows legal legs. By working with a lawyer from the beginning of the process, you can quickly mitigate risk, simplify the process, and close the relationship on the best terms possible.

We help a variety of businesses such as AccelerComm, Energy Aspects and Togather navigate the ever-changing employment law world. In need of HR or Employment Law support in the UK? Get in touch with our team.

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