Termination of Employment Contract Letter UK

blog-publish-date 14 August 2020

Although a natural part of employment, terminating an employee’s contract is often awkward and contentious. This can come about a number of ways. Employees may terminate their contract by resigning, and an employer may terminate the contract by dismissing an employee.

Make sure you remain compliant with UK laws by using this termination of employment letter.

This formal notification of dismissal covers the reason for dismissals, such as:

  • Poor conduct
  • Poor performance
  • The date the employment ends
  • Arrangements about holiday and salary
  • The right to appeal against dismissal,
  • Return of the employer's property and information. 
  • It also allows for payment in lieu of notice (PILON).

The Employment Law for Termination of an Employment Contract

Contracts of employment must state the length of the minimum notice period that the employee must give and receive to terminate the contract. If the employee chooses to end it, then it is terminated by mutual consent and in theory, they will not have a claim against you. 

If you wish to fire an employee or end an employment contract yourself, you can do this at any time. If not done properly, this could lead to a number of defending claims from the employee. These include:

  • Wrongful dismissal: or failure to provide sufficient notice
  • Discrimination: In the event the termination is based on employees
  • Unfair dismissal: Only able to be claimed if they have worked for you over two years. 

The ERA identifies a number of potentially fair reasons for dismissal, under section 98. These reasons may allow you to dismiss an employee without a  . These are:

  • Conduct/gross misconduct - harassment, damage to company property, etc. 
  • Competency - the capability to do the job or lack of qualifications  
  • Redundancy - when you need to reduce the workforce
  • Breach of a statutory restriction - an employee's right to work in the UK may expire or they may lose a license that made it legal for them to carry out a role
  • Some other substantial reason (SOSR) - a reason to use when none of the other potentially fair reasons applies, e.g. personality clashes in the office. It can’t be something insignificant or trivial

While it is not required, writing a termination letter can help maintain the reputation of the company and allows for records to be kept for legal purposes. 

Providing an employee with a written statement of separation is a more compassionate and respectful way to dismiss them. A written statement gives you the opportunity to comprehensively lay out the reasoning in a respectful manner.

What is the Termination Letter Format?

After downloading, you’ll have what amounts to termination policy guidelines. The employment contract termination letter format will give you access to: 

  • A company termination of employment contract letter template you can adapt for your business.
  • Termination best practices
  • Termination policy checklist to apply to your current process

How to Use This Template

You can download our sample letter to terminate a contract of employment for free as part of our resources.

It’s simply a case of entering a few details and then you’ll have access to the sample letter of termination of an employment contract. 

What is Included in This Letter? 

This sample letter of early termination of an employment contract should include the following:

  • The reason for the termination of the contract
  • The effective date of termination
  • When they will receive their final pay check

How Croner can Help?

Don’t forget, you can get in touch with our team of experts on 01455 858 132.


Disclaimer: This template is provided ‘as is’ and Croner Group Ltd excludes all representations, warranties, obligations and liabilities in relation to the template to the maximum extent permitted by law.

Croner Group Ltd is not liable for any errors or omissions in the template and shall not be liable for any loss, injury or damage of any kind caused by its use. Use of the template is entirely at the risk of the User and should you wish to do so then independent legal advice should be sought before use.

Use of the template will be deemed to constitute acceptance of the above terms.