Employee Termination Letter: 5+ Samples & Writing Guide

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Employee Termination Letter

Termination is never easy. But as an HR professional, issuing an employee termination letter is part of your responsibility. It’s not just about closing employment formally—it’s about doing it legally, professionally, and with clarity.

Yet many HR teams struggle with:

  • Using the right tone, which is firm but respectable.
  • Preparing the structure of the letter that mentions all the necessary details.
  • Issuing the right type of letter, especially in cases of immediate dismissal or misconduct.

If you make a mistake in it, you may face legal challenges, emotional response, or loss to the brand of employer. But if you do it correctly, you ensure a clear, compliance and respectable exit process for all sides.

This makes it important to learn:

  • What an employee termination letter is (and isn’t)
  • How to write it with confidence and legal information
  • 6+ ready-to-use templates for different scenarios
  • The exact format HR professionals can rely on for every exit

Let’s begin.

What is an Employee Termination Letter?

A termination letter is a formal document that HRs provide to the employee informing the employee about his/her end of employment. The letter explains the reason for termination, last working day, and details about settlements.

This letter serves multiple purposes:

👉 a clear written record of the decision to terminate.

👉 Mentions the reason for the termination, and the final payment information.

👉 Helps in compliance with labour laws and internal HR policies.

There are different types of termination letters depending on the situation:

  • Termination with notice – For performance issues or restructuring
  • Termination without notice – Typically for misconduct or policy violations
  • Immediate termination – Used in urgent cases requiring instant action
  • Mutual separation – When both parties agree to part ways

Separately, compared to the resignation letter (which is started by the employee), the employee termination letter is initiated by the employer and is often the final step of the offboarding process.

Types of Employee Termination Letter

Before we dive into the nitty-gritty, we first need to know what types of termination letters there are. How they are different and what is the right format you have to choose for a particular situation. Typical type of termination letters are

Voluntary Termination (Resignation Letter):

When an employee leaves the company on their own will. They send a formal letter called a resignation letter, which specifies why he is leaving the company and when the expected last date is.

Involuntary Termination:

When an employer initiates the termination process of an employee on the basis of poor performance or misconduct.

Termination for Cause:

This employee termination letter is issued to the employee when he has made a serious mistake that negatively impacted the company’s project or its brand image, like a violation of company policies, misconduct, etc.

Termination Without Cause:

This termination is called termination without cause, where there is no specific reason to end the employment. This could be due to restructuring of the company, budget cuts, or no more requirement of a specific role.

Layoff Letter:

We hear so much about layoffs these days. This type of employee termination letter does mean that the company is forced to terminate the employee’s employment due to external factors like financial problems or lowering business projects.

Mutual Agreement Termination:

When an employer and employees agree to part their ways due to any reason, and the termination happens with both parties’ consent, it is called Mutual Agreement Termination. This is usual in contract-based and rental-based businesses.

Retirement Letter:

This letter is for senior employees, which generally acknowledges the retirement of the employee and mentions retirement benefits given to him.

Probation Period Termination:

This employee termination letter is generally issued because of the not-as-expected performance during the employee’s probation period.

What Indian Law Says About Termination?

When an employee has to be fired from a job (termination), there are many laws in India that govern this process directly and indirectly. Some of the important laws among these are:

1. Industrial Disputes Act, 1947

This law is specifically for “workmen.” Workmen include factory workers, technicians, or people who perform manual or technical work.

This Act says:

  • If a workman has done a job in the same company for a year, the company has to give a notice period or 1 month’s salary on termination.
  • The company also has to provide retrenchment compensation of 15 days’ salary for every year of employment.
  • This Act also specifies that termination reasons should be valid, like misconduct, cheating, incapacity, or redundancy.
  • If there is misconduct, it is necessary to conduct a proper, fair inquiry.

Furthermore, if there:

  • are 100+ workers in the company, then 90 days’ advance notice must be given, and government approval must be obtained beforehand.
  • is a dispute (meaning the employee does not agree to the termination), then the employee has the option to go to the labour court.

2. Shops and Establishments Act (State-wise Rule)

  • Each state has its own Shops and Establishments Act, which applies to employees working in places such as offices, showrooms and shops.
  • This law mandates the notice period of 30 days if the employee has worked for at least 3 to 6 months.
  • In case of any misconduct, a company can fire an employee without notice period, but the employee has to be given an opportunity to present an explanation.

Examples of the Act in Different States

  • Maharashtra/Delhi: 30 days notice if work has been done for more than 3 months.
  • Karnataka/Tamil Nadu: 30 days notice after 6 months.
  • Andhra Pradesh: 1 month’s notice after 6 months + 15 days’ pay for every year after 1 year of employment.

3. Industrial Employment (Standing Orders) Act, 1946

This Act is applicable to the companies with 100 or more employees. And this law makes it compulsory for a company to prepare proper Standing Orders. It is an official document that mentions the rules of termination and what disciplinary action has to be taken, for example. This written document ensures that everything happens in a fair, clear and consistent manner.

4. Indian Contract Act, 1872

  • This law applies to people who are not “workmen” but are contractual employees (or any profession that does not fall under the workmen definition), such as managers, employees, designers, etc.
  • This law establishes that the employment contract serves as the primary governing document. However, no rule of the contract should be against the labour law.
  • If either party (employer or employee) breaches the contract, mostly compensation or damages are provided.

5. Payment of Wages Act, 1936

This law mandates that an employee’s remaining salary, bonus, leave money, etc., needs to be settled within two days of termination.

Important: Variations in State Law

Each state’s Shops and Establishments Act may differ. Therefore:

  • Just looking at the central laws is not enough.
  • It is important to follow the state laws as well—such as timing of notice, documentation, etc.

In short, India has established specific rules and processes for employee termination under various laws. A notice period is required if the employee meets specific requirements. Additionally, employers have to mention a clear and valid reason in the employee termination letter. Moreover, every company and HR department should consider both central and state laws.

Next, coming to the core topics of termination letter format and some samples for different causes.

Employee Termination Letter Formats

This section provides simple, clear, and legal requirements for writing a proper termination letter. This letter format is specifically for the Indian context and may vary for international purposes.

1. Standard Format

This format will be standard, meaning it can be used for any termination cause, like for performance issues, redundancy, or misconduct. However, HR professionals must customise the format for specific purposes.

<Company’s Letterhead>

Termination Letter

Date: <Insert Date>

To,

<Employee Name>

<Employee Address>

<City, State, PIN Code>

Subject: Employment Termination

Dear <Employee Name>,

This letter is to inform you that your employment with <Company Name> is being terminated. Your last working day will be <Last Working Date>.

Reason for Termination:

Write short and professional reasons for termination. For instance:

Due to redundancy (company structure change or cost-cutting), OR

Due to consistent underperformance (as per performance reviews), OR

Due to violation of company policy (as per internal inquiry), OR

As per the terms of your employment contract.

(It is advisable to avoid emotional words and unnecessary details.)

As per the company policy, your last working day will be <Termination Date>.

Your final settlement will include:

  • Remaining salary

  • Encashment of unused leaves 

  • Applicable statutory benefits (like PF, gratuity, etc.)

  • (Retrenchment compensation or Severance pay, if applicable)

You will receive all this by <settlement payment date>.

Next, you will have to return all the assets of the company, such as:

  • Laptop, charger

  • ID card, access cards

  • Mobile phone, SIM cards

  • Company documents/files

All this will have to be returned by <Return by Date>.

Confidentiality, non-disclosure, or non-compete agreements you signed will remain valid even after you leave. If you have any queries regarding the termination process, you can contact:

<HR Manager’s Name>

Email: <HR Email>

Phone: <Phone Number>

Sincerely,

<Your Name>

<Your Designation>

<Company Name>


2. Employee Termination Letter Format – For Cause

<Company’s Letterhead>

Termination Letter

Date: <Insert Date>

To:

<Employee Name>

<Employee ID>

<Department>

<Address>

Subject: Termination of Employment for Cause

Dear <Employee Name>,

This letter serves as formal notice of termination of your employment with <Company Name>, effective <Last Working Day>, in accordance with the terms and conditions outlined in your employment contract and applicable Indian laws.

Following a thorough internal enquiry dated <Enquiry Date>, it was found that you have committed <briefly specify the act of misconduct—e.g., violation of company policy, unauthorised absence, etc.>, which constitutes a serious breach of company rules as per the <relevant policy/Standing Orders/Industrial Disputes Act, 1947>.

You were given an opportunity to provide an explanation through a show-cause notice on <Date>, but your response was found unsatisfactory.

All dues, including salary up to <Last Working Day> and leave encashment (if any), will be settled within two working days as per the Payment of Wages Act, 1936. Your relieving letter and experience certificate (if applicable) will be issued upon return of all company assets.

Please ensure the return of company property (ID card, laptop, access cards, documents) by <Date>.

Please acknowledge receipt of this letter.

We wish you success in your future endeavours.

Sincerely,

<Name>

<Designation>

<Company Name>


3. Employee Termination Letter Format – Without Cause

<Company’s Letterhead>

Termination Letter

Date: <Insert Date>

To:

<Employee Name>

<Employee ID>

<Department>

<Address>

Subject: Notice of Termination of Employment

Dear <Employee Name>,

We regret to inform you that your employment with <Company Name> will cease effective <Last Working Day>. This decision has been taken due to <business reasons/restructuring/redundancy>, and not due to any fault or misconduct on your part.

In accordance with your appointment letter and the applicable Shops and Establishments Act, you are hereby provided a < -day> notice period. You are required to serve until <Last Working Day> or receive payment in lieu thereof.

You will receive your final salary, statutory benefits, and, if eligible, severance pay as per company policy and Indian labour laws. The Payment of Wages Act requires settlement of all dues within two working days of your last day.

Kindly return all company property (laptop, ID badge, access cards, etc.) before your departure.

Please contact the HR department for exit formalities and to obtain your relieving and experience letters.

We thank you for your contribution and wish you success in your future career.

Sincerely,

<Name>

<Designation>

<Company Name>


4. Immediate Termination Letter to Employee (Format)

<Company’s Letterhead>

Termination Letter

Date: <Insert Date>

To:

<Employee Name>

<Employee ID>

<Department>

<Address>

Subject: Immediate Termination of Employment

Dear <Employee Name>,

This letter is to notify you that, effective immediately, your employment with <Company Name> is terminated due to <serious misconduct/violation of policy>, as established in our internal enquiry.

You are not required to serve a notice period as the termination arises from gross misconduct, in accordance with the Industrial Disputes Act, 1947 and company Standing Orders. Details of the enquiry conducted and your response to the show-cause notice have been recorded.

Outstanding salary and benefits up to <Termination Date> will be processed and paid within two working days, as required by law.

Return of Company Property:

Please surrender all company assets (laptop, ID, access cards, etc.) at the earliest.

Please acknowledge this communication.

Sincerely,

<Name>

<Designation>

<Company Name>


5. Employee Termination Letter Ending Contract – Format

<Company’s Letterhead>

Termination Letter

Date: <Insert Date>

 

To:

<Employee Name>

<Employee ID>

<Department>

<Address>

 

Subject: Termination of Employment Contract

 

Dear <Employee Name>,

 

This is to formally notify you that your employment contract with <Company Name>, dated <Contract Start Date>, will be terminated effective <Last Working Day>, in agreement with Section <reference contract clause> and the Indian Contract Act, 1872.

 

Reason for Termination: <Specify: completion of project, end of fixed-term contract, non-renewal, or as per contract terms.>

As required under your contract and applicable law, you are being provided with <notice period or payment in lieu>. All dues, including salary, bonus, or any benefits accrued till <Last Working Day>, will be settled within two working days of termination. You will receive a relieving letter and certificate of employment upon return of company property.

Please return all company assets on or before your last working day.

Wishing you all the best in your future endeavours.

Sincerely,

<Name>

<Designation>

<Company Name>


Employee Termination Letter Samples

Here we give sample termination letter to employee

1. Termination Letter Sample – For Cause (Misconduct or Policy Violation)

<Company’s Letterhead>

Termination Letter

Date: 17 July 2025

To:

Mr. Rahul Mehta

5th Floor, DLF Phase 2

Gurugram, Haryana – 122002

Subject: Termination of Employment – For Cause

Dear Mr. Mehta,

This letter serves as formal notice of termination of your employment with Farishta Technologies Pvt. Ltd., effective 17 July 2025, on account of serious violation of company policies.

As per the findings of the domestic enquiry concluded on 15 July 2025, it was established that you were involved in repeated unauthorised absences and misuse of company data systems, both of which are in breach of Clause 6 and Clause 9 of the Company’s Employee Conduct Policy and the certified Standing Orders (as per the Industrial Employment (Standing Orders) Act, 1946).

Given the gravity of the misconduct, and after providing a fair opportunity to respond, the management has decided to terminate your services with immediate effect.

You are requested to return all company property in your possession including the laptop, ID card, and access credentials by 19 July 2025. Your final settlement, including dues (if any) as per the Payment of Wages Act, 1936, will be processed and credited within 2 working days.

Please note that your relieving letter and experience certificate will be withheld as per policy in cases of termination for misconduct.

For any clarification, you may reach out to the HR department at hr@farishtatech.in.

We wish you the best in your future endeavours.

Sincerely,

Nikita Sharma

HR Manager

Farishta Technologies Pvt. Ltd.


2. Employee Termination Letter Sample – Without Cause (Business/Redundancy Reasons)

<Company’s Letterhead>

Termination Letter

Date: 17 July 2025

To:

Ms. Shalini Nair

3rd Floor, L&T Business Park

Powai, Mumbai – 400076

Subject: Termination of Employment – Without Cause

Dear Ms. Nair,

We regret to inform you that your employment with BlackHole Solutions Pvt. Ltd. is being terminated, effective 31 July 2025, due to internal restructuring and position redundancy. Please be assured that this decision is not a reflection of your performance, which has been appreciated.

In accordance with the notice period under the Shops and Establishments Act, Maharashtra, you will be provided with one month’s notice pay in lieu thereof. Your full and final settlement, including accrued salary, leave encashment, and applicable benefits (like gratuity and PF), will be disbursed on or before 5 August 2025, as per the Payment of Wages Act, 1936.

You are requested to return all company property by 25 July 2025 and complete the exit clearance process.

Your experience letter, relieving letter, and statutory documents (such as PF transfer forms) will be issued post clearance.

We thank you for your contributions to the organisation and wish you success in your future roles.

Warm regards,

Rajeev Menon

Senior HR Officer

BlackHole Solutions Pvt. Ltd.


3. Immediate Termination Letter to Employee – Sample

<Company’s Letterhead>

Termination Letter

Date: 17 July 2025

To:

Mr. Kunal Jaiswal

Flat 12-B, Nungambakkam High Road

Chennai – 600034

Subject: Immediate Termination of Employment

Dear Mr. Jaiswal,

This letter is to inform you that your employment with Five FinTech Pvt. Ltd. stands terminated with immediate effect, i.e., from 17 July 2025, due to gross misconduct and violation of the company’s data confidentiality policy.

Following an internal investigation, it was found that your actions were in breach of the employment contract as well as the company’s Code of Conduct under the Information Technology Act, 2000 and the internal IT Security Policy.

As per the terms of your contract and the provisions of the Industrial Disputes Act, 1947, no notice period is applicable in case of termination for gross misconduct.

You are required to return all company-owned equipment and files by 18 July 2025. Your final dues, if any, will be cleared within 2 working days, subject to return of all company property.

Relieving and experience letters will not be issued due to the nature of the termination.

For further clarification, contact the HR desk at hradmin@sigmafintech.in.

Sincerely,

Ankita Joshi

HR Head

Five FinTech Pvt. Ltd.

4. Employee Termination Letter Ending Contract – Sample

<Company’s Letterhead>

Termination Letter

Date: 17 July 2025

To:

Ms. Reema Arora

DLF Cyber City, Phase 3

Gurugram – 122002

Subject: Termination of Fixed-Term Contract

Dear Ms. Arora,

We would like to inform you that your fixed-term contract with Jajoba Creatives LLP, dated 1 February 2024, will end on its scheduled expiry date of 31 July 2025. As this was a contractual position, there is no renewal or extension beyond the agreed period.

As per the terms of the contract and under the Indian Contract Act, 1872, no further notice or severance is applicable. However, your dues, including salary for July, leave encashment, and applicable statutory benefits, will be processed by 2 August 2025.

Please complete the handover and return of company assets by 29 July 2025. Your experience certificate and relieving letter will be issued after the clearance process is complete.

We thank you for your valuable contributions during your time with us and wish you the very best for your future endeavours.

Warm regards,

Devika Iyer

HR Coordinator

Jajoba Creatives LLP

NYGGS HRMS: Your Tool for HR Letter Generation

An employee termination letter seems like a mere formality. But it’s crucial for how the employee leaves and for the company’s reputation. This is because a well-managed exit process doesn’t close one chapter; it opens another for trust, goodwill, and employer branding that is reflected in the offboarding documents, including the termination letter.

Furthermore, as an HR software company, we know that HRs need to execute exits with sensitivity, compliance, and transparency. That’s why we developed NYGGS HRMS to automate compliance-based offboarding HR letter generation, including termination letters, experience letters, and relieving letters. The software also makes FnF settlements as easy as mouse clicks.

Want to simplify your offboarding process?

Call us now for a customised demo of NYGGS HRMS.

FAQs

Q. How do I politely terminate an employee?

You may start with the phrase ‘I apologise for the decision, but unfortunately…’ to start sounding polite and respectful immediately. Be honest and clear with reasons for termination, offer support, and hand over a proper written termination letter along with final settlement details.

A termination letter is a formal document that HRs provide to the employee informing the employee about his/her end of employment. The letter explains the reason for termination, last working day, and details about settlements.

When writing an employee termination letter or email to an employee, keep in mind to mention:

  • Date of termination
  • Reason for termination
  • Notice period or final working day
  • Final settlement and benefits info
  • Instructions for returning company assets, and
  • HR contact details

You will just have to maintain a professional tone to sound respectful and unbiased.

A letter of immediate termination is handed to an employee when they are dismissed without notice, typically due to serious misconduct or a policy violation that cannot be overlooked.

Not necessarily. An employee termination letter is a standard HR document used to formally close employment. While it may feel negative, it’s not inherently bad because termination also happens without cause, such as layoffs, contract end, or just a business cost-cutting part.

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