Sample Termination Letter

Here is another sample official letter, namely, a Sample Termination Letter

The termination letter referred to in this article is a letter issued to an employee by the employer.

This letter will usually state the reasons why an employee's service is terminated. People refer to this as termination with cause as usually provided for under disciplinary rules.

Apart from serious misconduct or persistent non-compliance with company's work rules and procedures by such an employee, the financial position of the organization is a valid reason for termination by way of retrenchment.

Company's Letterhead



Name of Employee and Address



We wish to inform that XYZ Ltd is currently facing a serious financial crisis as the result of the economic downturn and global recession that are affecting businesses around the country.

As the result of this, we regret to inform that the company has to take drastic measures to ensure its very survival. One of the measures that the company will take is to retrench some twenty percent of its workforce.

Based on the principle of Last-In, First-Out (LIFO), we regret to inform that you are included in this retrenchment exercise.

You will cease to be on the payroll of XYZ Ltd with effect from 1st July 20XX.

We are pleased to inform, however, that you will be given first refusal of a return to serve XYZ Ltd once its financial position improves. We have put in motion a number of strategies to put the company back on the road to financial recovery.

On behalf of XYZ Ltd, I wish to express my gratitude and appreciation for your undivided service and dedication to this company until now.

Yours sincerely,
for and on behalf of XYZ Ltd

Chief Executive Officer

Copied to: Chief Financial Officer
Copied to: Senior Manager, Human Resource

This sample termination letter is for a certain specific purpose. Other sample termination letter that is made available at this website later on will include such reasons as acceptance of resignation, and dismissal for various reasons.

LIFO Method
The LIFO principle is the most common method adopted by organizations in cases when they have to reduce the size of its workforce. (Other methods like the FIFO (First In, First Out) is not so fair.)

The employees who have been recruited most recently will go out first. This method is intended to retain experienced employees.

By using the LIFO, the organization may lose the service of capable people who are needed to help in its quick recovery to financial stability.

Communication Company-wide
The company need to clearly explain to all employees why the retrenchment is necessary and that it is going to use a certain method of identifying employees for the purpose of the retrenchment exercise.

Retrenched Employees Are Invited to Rejoin Company
Employees whose service had been terminated but later rejoin the company, are issued fresh appointment letters. They may get the same position and pay where this is possible which include ability to pay. However, the service is not considered a continuation of the previous appointment.

The company may offer an equivalent position in another area of its activities. If not, rejoining employees are offered some other jobs.

The former employees are free to accept or refuse if they are not too happy with the offer.

Treat this sample termination letter as a Guide ONLY

This letter is for reference purpose only. Always check and verify your draft against available information. Have a legal person vet your draft, where necessary. Surely, your organization has an in-house legal advisor.

CHECK out the Sample Employment Contract at this LINK.

Sample Show Cause Letter
Sample Suspension Letter
Link to my eBookstore at

Privacy Policy

To Home Page