An Employment Termination Letter is used by an employer to communicate termination of employment, with or without cause. It is provided to the employee as a formal notice of dismissal from their current position with the company.

An Employment Termination Letter should include as many details as necessary regarding the dismissal of the employee in question. General information, such as the name of the employee and their position, as well as the name and contact information for the manager or human resources person in charge of the process, should also be included.

Here are some examples of information the Employment Termination Letter should include:

• A description of the event or events that resulted in the decision to dismiss the employee: misconduct, incompetence, insubordination, absenteeism, stealing, falsifying company records, or damaging company property. Include the date and time of any previous warnings about behavior (verbal or written) if applicable
• Any expenses owed to the employee (such as if the employee purchased goods or services for business reasons and requires reimbursement for those purchases), and when any benefits will end (e.g. health benefits, or employee discounts on product or services)
• The employee's termination date
• A reminder to the employee to return any company property they may have in their possession
• Specific details on severance pay, if applicable, or payout of vacation time
• Any necessary additional terms or clauses, such as confidentiality

While there are no laws that technically require an employer to provide an Employment Termination Letter to an employee they are letting go, many employers choose to do so anyway as part of a formal process, and/or to avoid a potential lawsuit. For the employer, it's good practice to have documentation outlining the employee's termination in case it needs to be referred to later. The terminated employee should also receive a copy for their records.

Although it doesn't negate the risk of a lawsuit by the former employee, simply having good documentation available as part of a paper trail is beneficial to both parties.