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Letting Go – Employee Termination Letter Template and How-To Guide

While terminations are unpleasant, they are sometimes inevitable or necessary for the betterment of the company. This article will walk you through how to know when termination is the right option, and how to then execute the  firing of an employee with the least amount of risk.

We’ll discuss:

  • How to Know If It’s Time to Fire Someone
  • The Laws Around Terminations
  • The 5 Steps of an Employee Termination

o   Step 1: Compiling Documentation

o   Step 2: Create a Termination Plan

o   Step 3: Prepare for the Termination Meeting

o   Step 4: Termination Meeting

o   Step 5: After the Meeting

Plus

  • The Top 10 Termination Tips
  • Free Downloadable Termination Letter Template

But first, let’s backtrack for a moment and decide if firing someone is what actually needs to be done.

How to Know If It’s Time to Fire Someone

Remember, firing or termination should be the last resort for any employee as it causes stress to a business and even risk, as well as of course the negative impacts on the team, the actual employee in question, and overall office morale. Techniques like progressive discipline, coaching, and a Performance Improvement Plan (PIP) should be exhausted prior to termination, unless a particularly egregious offense has been committed (i.e. stealing, workplace violence or threats of it). These steps also can serve as documentation for the termination, which is crucial for mitigating risk and avoiding a lawsuit.

Prior to termination, ask yourself:

  • Have I exhausted all options for trying to get this employee to comply to policies, perform, behave better, etc…?
  • Have I tried coaching, feedback (both direct and indirect), and have I been absolutely clear that their behavior or performance is unacceptable?
  • Will this person be surprised at being terminated? (Hint: NO ONE should ever be surprised at being fired if you have exhausted all possible ways to keep them as an employee.)

Now, especially if you are moving forward with the termination of the employee, you need to make sure your actions are in compliance with your state’s laws.

The Laws Around Terminations

In the end, every state except Montana is subject to what’s calledat-will employment. In its most basic element, this means that an employer has the right to terminate someone with or without cause, as long as there is nothing else at play (i.e. discrimination, retaliation for a sexual harassment complaint). On the flip side, it does also mean that an employee can walk away from an employer without recourse. However, most people think of it for the employer’s right. Again, remember- it still does not make an illegal act like termination for discrimination, for whistle-blowing, or other retaliation legal.

We recommend you also look here for more detailed laws around termination in your state specifically.

The 5 Steps of an Employee Termination

Once you have made the decision that you will be moving forward with terminating an employee, here are the 5 steps you should take. If you find these steps hard to follow, there is a chance that you should consider a better documentation process of performance or behavior issues, or an implementation of a more formal feedback or performance system.

The 5 steps we will go through are:

o   Step 1: Compiling Documentation

o   Step 2: Create a Termination Plan

o   Step 3: Prepare for the Termination Meeting

o   Step 4: Termination Meeting

o   Step 5: After the Meeting

Need help creating a better performance management system? Send us a message.


Step 1: Before terminating, get your documents together.

First and foremost, compile documentation on performance and behavior for the employee. You may need to involve other team members in this process to collect information or documentation (i.e. an email exchange or something similar). Ensure that team members involved in this process understand the confidential nature of your request.

You’ll also want to compile any documentation you can regarding past actions your company has taken in an effort to rectify the employee’s performance or behavior issues, and consider writing out a timeline of events (especially if a number of verbal warnings or meetings were had). Include dates, times, and who was in attendance. Stick to the facts. 

Here’s a good vs. poor example of how to document employee issues:

GOOD:

“December 12th, 2018, 9 am- Sally was an hour late for her shift. Mark, the manager on shift at the time, had a meeting with her immediately about it in his office. He provided her with an additional copy of the employee time tracking policy, which includes tardiness procedures and outlining the policies of who and how to call in the event that you’re late.”

POOR:

“December 12th, 2018, 9 am- Sally was an hour late to her shift and showed up looking disheveled and looking like she was going to say that her kids made her late again. Mark, the manager, had a meeting with her and informed her that children are not a reason to be late to work.”

When you are creating your documentation, read it back to yourself as if you’re an outside 3rd party (like an attorney). Stick to the facts, and be straightforward with your language – eliminate opinions and hypotheticals.

Now that we have our documentation, let’s create a termination plan.

Noticing you don’t have very much to document the termination? Hint: you might want to wait until you do to avoid risk or other issues.

 

Step 2: Create a termination plan.

Your termination plan should read like a blueprint for the action:

Logistics: Who will be there? When? Where? You will want to answer all of these questions and write down the answers. Think about who else should be present — your attorney? Another of the employee’s supervisors? You should always have a 3rd person as a witness and for safety purposes (as silly as this may sound, it’s a good rule to follow). You may also need to have to provide them with their last paycheck at the end of the meeting. Make sure to check your local legal website to make sure you’re compliant. 

Who else needs to be involved? Make a plan for who needs to know about the termination prior to your meeting, how work will be covered (or shifts), and make sure that the management team is looped in. You will also need to loop in IT in order to cut off passwords, if relevant.

Meeting Agenda: You will need a termination letter, and potentially a separation agreement if you are using severance. which we’ll cover in the next section. 

Have a Termination Checklist: To make sure everything is covered, consider using a checklist.

 

Step 3: Consider all elements. 

Lastly, before the meeting  make should consider the “human” elements of termination. Is this a long-time employee who you might even consider a friend? Think of how you feel about this termination, and take time to consider how management, other team members, and, of course, the soon-to-be-terminated employee might feel about things.

Everyone’s adrenaline will be rushing, so you’ll want to be completely prepared and ready for anything.

To prepare for the termination meeting:

  • Check, and then double check, your termination checklist.
  • Make 2 copies of all documents. 1 for the employee, 1 for your company’s records.
  • Consider creating a script and practicing the meeting. If you have a trusted colleague who knows about the termination, consider some role play and test out three scenarios. The good (the person leaves peacefully), the bad (the person flies off the handle), and the ugly (the person resorts to violence or legal threats).
  • Create an exit plan. You or your witness will need to escort this person off premises for security reasons. Will the person first need to clear their desk, or could you box everything for them and ship it overnight to their home? Think of what’s best for everyone involved, even if it means a few hundred dollars in shipping charges.
  • Consider what else needs to occur, from IT password blocking to collection of company property like a cell phone, laptop, or door key/ FOB and company ID. Have your trusted colleague who is also going to be your witness go over items as well; s/he might think of something you haven’t.
  • You will want to make sure you get the employee’s personal email address and/or phone number if you don’t already have it in order to make sure you can reach them just in case (i.e. a returned W2).

Step 4: Termination Meeting

The time for the meeting is here. Take a deep breath, and gather your preparations and trusted colleague/ witness. Invite the employee to the location, and get to it- deliver the message, provide real reasons (if it’s well documented and not a risk), and then ask the employee if s/he has any questions. Provide them their paperwork, and escort them off the premises (don’t forget to gather that company property!).

In most cases, employees who are terminated actually behave in a way we’d not expect… think of the tough guy you thought would scream at you start to cry. Be sensitive, and allow a person a minute to gather themselves, but continue to iterate that it’s time for them to get going off premises.

If emotions start to run high, invite the employee to leave and that you can answer questions once emotions have died down. If someone has severance, it is advised that they process things for a time period anyway (and if they are over 40, they have 21 days by law). Setting up a follow up meeting or conference call in a secure space with witnesses can be best for everyone once emotions have mellowed.

Once the employee has been safely escorted off premises, you will need to deal with the aftermath.


Step 5: After the Meeting

After the termination meeting, ensure that you:

  • First, inform the team of your actions either via a meeting or an email to the company. Don’t over-dramatize things or go into reasons — and don’t make light of it; this is a big decision that deserves a direct message and then an action plan to how this employee’s work and/or shifts are being covered.

Good Example: “Today we had to let go of Darryl from working at our company. We appreciate his service while here and we will be covering his Monday-Friday 9 am-5 pm shifts with a temp employee we hired from an agency. If you have any questions, please do ask your manager. We appreciate your support.”

Bad Example: “I am sure if comes to no surprise to anyone that we fired Darryl today. Hopefully, this will all help you guys to realize what we mean when we give warnings. We will have each of you pick up a shift of his this week to cover his time while we start to recruit for someone to replace him.”

  • Double check that you have suspended all IT access – email, office, passwords etc., as well as gathered all company property. If you forgot something, carefully consider if there is any risk (i.e. do you need to change a door lock?) or if it can be considered a loss.
  • Remember to terminate the employee on internal systems like payroll, benefits, etc.
  • Remove the employee from the website or marketing materials. You will also need to inform clients, if that’s a part of your business, and introduce them to their new account or company contact. We recommend doing this by email to keep things from being too over dramatic, but if you feel a call is warranted, go ahead and do so. Remember to stay succinct and direct about the events, just like in the company meeting/email.
  • Monitor review sites like Glassdoor or social media, just in case. It’s always good to keep an eye on your company reputation in any case.
  • Do the things you said you were going to do. Mail them their belongings and documents (if applicable) in a timely manner, clean up their desk or workspace so that it doesn’t feel like a “ghost” is around, and move forward with a new hire or temp.

Termination is an unpleasant, but sometimes necessary, experience/thing to do. With the steps above, hopefully you can come to a peaceful, albeit not easy, termination situation, and move everyone at the business forward.

Termination Letter Template

Company Header

Address

Full Date (Month/Day/Year)

[INSERT PREFIX] First and Last Name

Full Address

Dear Employee,

This letter confirms our discussion today that you are being terminated from your employment with Company effective immediately. [Optional: In thanks for your service, we are offering a severance of insert amount. Severance details are provided under separate cover in a longer severance agreement document.]

Your benefits packages will expire on full date.

You are required to return company property via source.

You will receive your final paycheck on date. This includes:

  • Bullet list items such as wages, PTO payout, etc..

You will need to keep the company informed of your contact information so that we are able to provide the information you may need in the future, such as your tax form.

Thank you for your service to the company.

Regards,

Name of Employee’s Superior or HR

Title


Top 10 Termination Tips

 

  1. Confirm and double check all documentation. Gather emails, dates of events and meetings, and physical documentation like paperwork should all be kept in 1 place (consider printing emails).
  2. Check your company policy and ensure everything is consistent and aligned with policy.
  3. Check your local and state laws, even if you are at-will. You will want to make sure you are completely prepared.
  4. Review if you have exhausted every option possible to prevent termination.
  5. Create and practice your termination script, especially if you have attachment to the employee or have not done many terminations before. You might be surprised that you have as much emotion as the person on the other side of the table.
  6. Consider a second opinion, be it another manager, a trusted colleague or fellow business owner, or even your attorney. It will help you to feel at ease with your decision and any risks that might be present.
  7. Always avoid a hasty termination; you never know how you might feel about things in 24 hours (especially if this is a performance termination). If policy is crystal clear (i.e. 5 tardies in 1 month = termination and you have documentation of the tardies), then you can move forward with less caution.
  8. Don’t be afraid to change your mind BEFORE the meeting. While you should never change your mind during the meeting or at the employee’s please (it creates risk and a potential legal situation), don’t be so bullish that you consider giving someone one more warning or coaching session to get them back on track.
  9. Trust your gut…within reason. If you’re gut instinct is sending you one way or the other, trust it… and then support it with documentation.
  10. Consider how to avoid this situation in the future. Is there something that could have been done with training? Management style? How you hired this person? Reflection is key to making your business better, and consider involving other people in this reflection process.
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