If you’ve ever been let go from a job before, you’ll know how stressful it can be to have your employment terminated. While layoffs often can’t be avoided, there are professional, respectful ways to approach notifying employees so that they have some clarity and closure. A well-written notice letter will formalize termination and include all the information the staff member needs to know to make plans for the future.
Even in the popular case of at-will employment, when a company can legally end the relationship without notice or cause, issuing an end of contract letter is generally regarded as the right thing to do. By providing an explanation for the termination and outlining details about the next steps, this letter type offers employees some peace of mind and helps make a difficult transition a little easier. What’s more, it also helps to protect the company should a legal dispute arise.
Bear in mind though that an email or letter shouldn’t be the first time a terminated team member hears they’ve been laid off. Bad news like this should be delivered in person, and a written document should follow to formalize the arrangement.
Follow the steps below to write an end of contract letter in the case of at-will employment.
Tips on How to Write an End of Contract Letter
1) Know Your Legal Obligations
Even when employment is at will, your company will be bound by certain laws and possibly by certain internal guidelines too. Before you write an end of contract letter, make sure that it cannot be argued that your reason for terminating employment is in any way linked to race, gender, religion, age, or any other factor that could suggest discrimination. Also, double-check that your decision to terminate and the way you go about it doesn’t violate public policy or any company rules. Review all relevant documents – job offer letters and email correspondence, for example – if you’re concerned about the above.
2) Watch Your Language
Use language that’s clear and specific, and leave no room for misunderstandings and ambiguity. Similarly, the tone of your letter should be professional, but not cold or patronizing, and empathic, but not overly emotional. Make it clear that you understand that it’s tough to get this news, but be straightforward about it. Being too apologetic will sound insincere in the context of a layoff letter.
3) Carefully Explain the Reason for Termination
Although it’s only required in some states, including a reason for the layoff when you write an end of contract letter is considered the proper thing to do. So, clearly explain why you made the decision – is the company facing financial trouble? Is the business shifting focus and eliminating departments? – and outline any criteria you used to decide exactly who would be let go. Make sure your reasoning is objective and verifiable, but do keep it simple and exercise restraint – disclosing too much information can open you up to unintentionally making statements that could be used against you in court.
4) Highlight What Happens Next
Ease the terminated employee’s nerves by including information about the following:
• Final pay: state the date on which they will receive their last salary payment, specify how they will be paid, and mention whether they’ll be paid out for unused vacation time.
• Continuation of benefits: notify the parting worker of the cancellation of any company benefits and include information on how they can continue to participate in policies separately. For example, give the employee the option to continue health insurance through the COBRA plan.
• Severance pay: if it’s your company’s policy to offer laid off staff a severance package, then also include details about what this entails in the letter. Don’t forget to ask them to sign a release agreement in exchange.
• Return of company property: remember to ask the employee to bring back any equipment, devices, or access cards belonging to the business by a specified date.
5) Recommend Support Channels
As you can imagine, being laid off is an upsetting experience, so indicate that your organization is compassionate by suggesting ways that the employee can reach out for help and guidance. Include a contact name and number they can call if they have questions, give them the option to meet with Human Resources, and specify if you’re able to connect them with an outplacement firm.
6) Express Your Gratitude for Their Work
This doesn’t mean you need to write an end of contract letter that waffles on about how much you value the employee and enjoyed having them on board – such statements mean nothing next to the news that they’re losing their job – but do include a line that acknowledges the time and effort the person invested in their role. Again, only include this element if it’s genuine, and keep it concise and to the point.
7) Get That Signature
For legal reasons, it’s a good idea to ask the employee to sign the letter by a specified deadline to indicate that they received it. Make several copies and ensure you and the terminated worker each have one.
8) Consult with a Legal Team
Even if you’re confident you’ve ticked all the legal boxes, you will want to get lawyers to review the letter to make sure you’ve abided by all the relevant laws and policies. Rather take this extra step than spend months in court.