There are two types of business termination letters. One for terminating a contract and the other for terminating employment. The contract termination is a straight forward business letter. It should be concise and professional in tone. A contract termination letter is a formal declaration of your intention to cease doing business with a company. State the terms of the contract and the reason for the termination. Include the exact date business will cease and contact information.

A termination of employment letter is one of the most difficult responsibilities supervisors face. An official termination letter is the final step in the severance process. It should be written and delivered only after all other avenues of resolving the issue have been exhausted. A properly documented performance issue will not be a surprise to the employee.

It is important to use a professional tone when writing a letter of termination. Keep the letter short and businesslike, but compassionate. Details of incidents and conflicts should be recorded elsewhere for reference purposes. An employment termination letter should include:

• The reasons for termination and any previous disciplinary actions taken.
• A concise statement of the company policy that requires termination.
• Clear information regarding dates and final salary disbursement.

A letter of termination should be delivered on an "effective immediately" basis.

Sample Termination Letter

Dear Jon Smith,

As I have discussed with you on numerous previous occasions, our company has a strict policy for dealing with customer complaints. Any employee who has more than three customer complaints within a 90 day period is given a written warning. The receipt of three such warnings within a year requires termination of that person's employment.

You have been given official notice of each customer complaint and every opportunity to correct your customer relations. On July 15th, a long time customer filed your final complaint leaving us with no choice but to terminate your employment immediately. All these complaints, including the most recent one, are stored in your personnel file and Mr. H. Resources will furnish you with copies if necessary.

Be assured that the details of this matter will be kept confidential. We wish you the best in your future endeavors. Your final check will be mailed to your home address at the end of this month. According to the terms of your retirement package, you have thirty days to roll your 401K over to a new employer or close it out.