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(Download free Termination of Employment model policy including HR best practices and legal background.)
A: Employee termination letters generally fall into two types: those that provide a simple statement of the termination decision (without providing a reason for the termination) and those that provide a reason for the termination. There are pros and cons to each type of letter.
Employers generally are not required to put their reasons for terminating an employee in writing. (A few states, including Missouri and Kansas, do require employers to provide a letter with such information as the nature of the employee's service, the duration of employment, and the truthful reason for termination or separation, but most states do not.)
Accordingly, many employers do not provide a specific reason for the termination because they do not want to limit themselves to the stated reasons if later required to justify their decision. Furthermore, these employers also recognize that the document may be viewed by third parties and become evidence in any lawsuit that results from the action. So instead, they simply state the fact of the employee termination and its effective date and then provide information on such administrative issues as returning company property, COBRA continuation coverage availability, the availability of severance pay and/or the payout of accrued unused leave (if applicable), and when the last paycheck will be available (if not included with the letter).
However, other employers believe employees are entitled to a written explanation and thus give formal notice of the reasons for discharge, in addition to the administrative information. One advantage of a written explanation is that it may prevent the employee from misinforming others about the grounds for its decision. For example, a well-prepared dismissal notice may discourage an attorney from pursuing a claim on behalf of the employee against the employer.
If you provide a statement explaining the termination, the reasons given to the employee for discharge should be consistent with, and supported by, documentation in the employee's personnel files. This consistency is important because the employee may have access to his personnel files under state law, as the result of a lawsuit, or if a government agency reviews the decision. Any reasons provided should be factual and accurate and should not contain vague or irrelevant comments or unsubstantiated accusations. Your personnel files should include documentation that supports the decision, such as performance evaluations and recommendations that accurately reflect the employee's abilities, disciplinary records detailing violations, and attendance records.
And, as a final precaution, it is always advisable to have legal counsel prepare or review any written termination notice.
Robin Thomas, J.D.
Personnel Policy Service, Inc.
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