When writing a severance letter, consider obligations to the company, employees, and labor laws. Review policies and avoid discriminatory language. Address compensation and consult a lawyer if necessary. Be clear, polite, and offer a positive reference.
To write a severance letter, you need to remember your obligations to yourself or your company, your employees, and labor laws. Reviewing company policy regarding non-compete agreements, non-disclosure agreements, severance pay, and any union contracts that come into play is an important step before sitting down to write a termination letter. Make sure you avoid any discriminatory language that refers to age, gender, race, and sexual orientation. The nature of the employee’s job and the reasons for the termination will impact the tone and language of the termination letter; for example, a letter releasing a seasonal employee is less complex than a severance letter to a long-term permanent employee. Your letter must include all specific data relating to the separation, such as the effective date of termination, the reasons for the separation and all details regarding insurance and severance pay.
Your responsibilities to yourself and your company include protecting your company from wrongful termination lawsuits while also maintaining positive employee morale. Your future ex-employee is likely to have friends among the rest of the staff. Assuming the separation is benign – like employee layoffs for financial reasons – making the effort to reassure the former employee and offer a positive reference letter can defuse animosity that could be mirroring staff morale. Be as polite as possible while being very clear on the details.
For permanent employees, issues such as severance pay, vacation time, sick time, stock options, and insurance coverage need to be addressed. For reasons of sound company policy, you may consult a lawyer before writing your termination letter. In terms of severance pay, sick time, and vacation time, you can be specific without using actual dollar amounts.
Two weeks of vacation, nine days of sick leave or six months of severance are sufficiently detailed indications of compensation for the severance letter. Referring to action on stock options and pension plans should be guided by your accountant and legal counsel. You might consider the letter a severance agreement. You are making a separation terms offer, and by signing the severance agreement, the employee about to leave the job agrees to your terms. In the event that the employee is a union member, the general union agreement should include guidelines that must be followed in the event of dismissal or termination.
Do not include any language in your termination letter that refers to gender, age, race, sexual orientation, or any other issue that could be considered discriminatory. The National Labor Relations Board (NLRB) has settlement guidelines available online. Don’t be shy about looking for a lawyer. Be as clear, concise, detailed and polite as the circumstances warrant, and your letter should achieve your goal of a harmonious separation.
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