Termination of employment is the final stage in a worker’s term of employment and the termination of that employee’s employment. The term of employment can be an individual’s whole working life or just a term as an employee or contractual employee. Termination can be either voluntary for the employee, or it can be at the hand of the company, most often in the form of a lay off or dismissal.
There are many types of situations where the termination of a contract of employment, such as a permanent contract of employment, can take place. In many cases the term of the contract can be extended through redundancy, sometimes called an enhanced contract, by mutual consent or at the end of a contract period. Another option would be an extended notice period. There are also instances where a company might decide to close down the business and then re-establish themselves under a different name; this is sometimes known as the re-organisation.
Often in these cases the employee will have the opportunity to leave their contract at any point during the notice period, with the understanding that they will need to complete the exit procedure at a later date. However, there are times when a contract can be terminated before the employee has even started work, with the understanding that once completed the employee would need to get informed of their next steps, including their compensation, notice and other documents.
A termination of contract letter is used to provide the employee with information regarding the circumstances surrounding their termination, and the type of notice required, where appropriate. It also provides details of how to handle financial details of their termination, where necessary.
In some instances, there are no employment letters, with the termination occurring through redundancy. When this happens the company will issue a letter to the employee informing them of the circumstances surrounding their termination, and the nature of their role within the company, and any future roles within the company. The company will also state their right to claim back lost wages, medical benefits and sick pay, if an employee is unable to work or is injured due to the company’s negligence. The letter must also state whether or not the employee will be able to access their personal belongings, such as clothes, jewellery, furniture or bank accounts.
There are also times where the termination of employment occurs due to reasons unrelated to the redundancy process. For example, if an employee quits a company and finds another, the letter must state how the person can continue to benefit from the company without interruption, such as continuing education opportunities and access to benefits, in addition to details of how the employees rights and entitlements will be affected in case of a redundancy claim from that company.