A termination recommendation letter outlines the reason for which an employee is being fired, as well as any benefits to which he or she may be entitled as a result of the termination. This letter is meant to serve as a notice to the employee that the business relationship with your company has come to an end.

Employee Termination Letter

Termination letters are intended to:

  • Notify an employee that he or she has been fired
  • Inform the employee regarding any next steps that need to be taken on his or her part
  • Explain any benefits or compensation to which the employee is entitled in association with the termination

Termination letters are also sometimes referred to as:

  • Pink slips
  • Letters of termination
  • Contract termination letters
  • Letters of separation
  • Notice of termination of employment

Informing an employee of his or her termination in this manner is safer for the employer because of the fact that upset former employees may be looking for someone to blame for the fact they've been let go.

In the event that a former employee seeks to pursue legal action, by keeping his or her termination letter simple and refraining from giving a valid reason, you're enabling the company to use any evidence as a defense. If the termination letter states the cause of separation, this is likely to be the only reason for the employee's separation that you'll be allowed to use in court.

Does the Law Require a Termination Letter?

While there is no federal law in place that requires a company to provide their employees with termination letters, it is required in certain states. The Society for Human Resource Management, or SHRM, strongly recommends you provide an employee with an official termination letter upon his or her release from your employment.

Termination letters are also useful for the purpose of creating documentation. They help to make your intentions clear, as well as outlining any next steps that may be required of the employee. If your state requires termination letters, providing them upon an employee's release from duty will keep you out of trouble.

Termination Letters With Well-Documented Performance Data

It's important to make sure you have a solid case and that your reasons for firing an employee are thoroughly documented. It is becoming more and more common for lawsuits in this particular area to be supplemented by a lawsuit from the Equal Employment Opportunity Commission, or EEOC, with allegations that discrimination has taken place in some way.

Learning about these things the hard way can be costly and time consuming. Therefore, it's highly recommended that in the event a manager is responsible for keeping this documentation up to date, a human resources member should check the documentation regularly to make sure everything is dated correctly and properly documented. You're going to need to make sure your documentation is legally sound. The last thing you want to have happen is to think that your documentation is solid only to find out later that it isn't.

In cases involving dismissal for poor performance, the employee in question is likely to provide a copy of your termination letter to the unemployment office. It's important to understand you're most likely going to notice mixed results when dealing with local unemployment offices. This is largely because each office, while operating under a set of guidelines, makes its own determinations.

In one particular case, a former employee was awarded unemployment compensation despite the fact that the former employer sent a total of 30 pages of performance related documentation. Within this documentation were clear indicators the employee was, in fact, trying to get fired intentionally. Despite this, he won his claim and was allowed to collect unemployment benefits.

What to Include in a Termination Letter

A termination letter should always include the following:

  • The employee's name, department, ID number, and position
  • The name of the manager handling the termination
  • Any benefits or compensation the employee is entitled to receive
  • Any company property the employee is to return
  • Any legal agreements (such as non-disclosure or non-compete agreements) the employee signed

It's a good idea to make sure a termination is reviewed by an attorney before having it delivered.

If you need help with a termination recommendation letter, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies such as Google, Stripe, and Twilio.