Set clear guidelines for fair and lawful exits—support your team, protect your organization.
An employee termination policy outlines the formal process for ending the professional relationship between an employer and an employee. It specifies valid grounds for separation and details the steps involved in handling both voluntary resignations and involuntary dismissals.
Once employment ends, the individual is no longer responsible for company tasks or benefits. Resignations initiated by the employee are considered voluntary, while terminations from the company’s side, such as due to layoffs or misconduct, are deemed involuntary.
Having a clear and legally compliant policy ensures transparency and protects the organization from potential disputes.
Employee departures typically fall under two categories:
1. Voluntary Exit
This occurs when an employee chooses to leave on their own terms. Common motivations include pursuing other career opportunities, personal obligations, or higher education. A formal resignation letter is generally required, along with a notice period—often 30 days, although this can vary depending on company policy.
2. Involuntary Exit
In this scenario, the organization initiates the separation. This could be due to reasons such as:
Workforce Reduction or Layoffs: These are often driven by cost-cutting, restructuring, or mergers. The affected employees are not at fault but are released due to business needs.
Termination for Cause: This includes consistent underperformance, breach of conduct, or policy violations. In such cases, employers might bypass the notice period, especially in severe breaches like misconduct or ethical lapses.
Unlawful Dismissals: While employers hold the authority to terminate employment, doing so without just cause or due process can result in legal consequences, including reinstatement or compensation.
Letting go of an employee is a sensitive process. To ensure fairness and compliance, companies should follow a structured approach:
Step 1: Issue Identification & Documentation
Start by recording the issues leading to potential termination—such as repeated absenteeism or performance concerns. Documentation is key for accountability and clarity.
Step 2: Provide Feedback and Support
Offer feedback and counseling to address the concern. In many cases, underperformance stems from a lack of clarity or support, which can be addressed with guidance and training.
Step 3: Initiate a Performance Improvement Plan (PIP)
If the concern persists, place the employee under a PIP tailored to their role. This should define clear goals, timelines, and resources for improvement.
Step 4: Proceed with Termination if Necessary
Should there be no progress despite multiple interventions, plan a formal termination meeting. Handle it respectfully and provide clear reasons.
Step 5: Conduct an Exit Process with HR
Facilitate a final HR discussion to handle documentation, final payment, return of company assets, and clarify post-employment benefits or obligations.
Date: June 22, 2023
To: Mr. A
Dear Mr. A,
This letter serves as official notice that your employment with [Company name] will end on July 15, 2023. Please note that this decision is final.
Your termination is the result of multiple violations of company attendance policy:
Reasons examples:
April 20, 2023: Unapproved absence; you were formally warned.
May 10, 2023: Second unapproved absence; a second warning was issued.
May 20, 2023: Third occurrence, which led to this decision.
As per company policy, your health benefits will remain active for 60 days post-termination. Please return all company property—laptop, office keys, and materials—by the end of the day.
For questions regarding your final settlement or HR paperwork, please contact [Y, HR Manager].
Sincerely,
[Name]
[Company name]