StartupGrants India

Termination Letter Format — Free Template

A termination letter is the company's written notice that it is ending someone's employment. Pick the basis (probation, notice under the contract, redundancy or misconduct after an inquiry), fill in the dates, and have it reviewed before you issue it.

Sample termination letter format — edit it live

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Redundancy termination letter (warm tone)

For a role that is no longer needed. Respectful and clear, and it says plainly that the decision concerns the position, not the person.

[Company Name]

[Registered office address]

[Date]

To, [Employee Name] [Designation]

Subject: Termination of employment on redundancy

Dear [Employee Name],

We know this is difficult news to receive, and we want to set out clearly and respectfully what has been decided and what happens next.

We write to inform you that, following a review of the Company's requirements, the position of [Designation] is no longer required. Your role has therefore been made redundant, and [Company Name] has decided to end your employment under your terms of employment. This decision concerns the position, not your performance or conduct.

  1. Last working day: Your last working day with [Company Name] will be [Last Working Day].
  2. Notice: Your employment ends at the close of business on [Last Working Day]. Instead of asking you to work your notice period, the Company will pay you in lieu of notice, and this will be included in your full and final settlement.
  3. Full and final settlement: Your full and final settlement will be processed as per company policy and applicable law.
  4. Company property: Please return all Company property in your possession, including any laptop, access cards, documents and data, on or before your last working day.
  5. Confidentiality and intellectual property: Your obligations of confidentiality, and in respect of the Company's intellectual property, as set out in your terms of employment, continue after your employment ends.
  6. Questions: If you have any questions about this letter or your settlement, please contact [Contact person and title].

Thank you for the work you have done at [Company Name]. We are grateful for your contribution and wish you every success in what comes next.

_______________________________

[Name], Director

For and on behalf of [Company Name]

Date: ____________________

_______________________________

Received by: [Employee Name]

Signature and date of receipt

Date: ____________________

Fill in your details and download this as Word

Termination letter during probation

For an employee who has not been confirmed, ending the employment during probation as the contract allows.

[Company Name]

[Registered office address]

[Date]

To, [Employee Name] [Designation]

Subject: Termination of employment during probation

Dear [Employee Name],

We write to inform you that [Company Name] has decided not to confirm your employment as [Designation], and to end your employment during your probation period, as provided for in your terms of employment.

  1. Last working day: Your last working day with [Company Name] will be [Last Working Day].
  2. Notice: Your employment ends at the close of business on [Last Working Day]. Notice will be given or paid as set out in your terms of employment.
  3. Full and final settlement: Your full and final settlement will be processed as per company policy and applicable law.
  4. Company property: Please return all Company property in your possession, including any laptop, access cards, documents and data, on or before your last working day.
  5. Confidentiality and intellectual property: Your obligations of confidentiality, and in respect of the Company's intellectual property, as set out in your terms of employment, continue after your employment ends.
  6. Questions: If you have any questions about this letter or your settlement, please contact [Contact person and title].

Please sign the copy of this letter to acknowledge that you have received it.

_______________________________

[Name], Director

For and on behalf of [Company Name]

Date: ____________________

_______________________________

Received by: [Employee Name]

Signature and date of receipt

Date: ____________________

Fill in your details and download this as Word

How to write a termination letter

  1. 1

    Take advice first

    Check the employee's category, your state rules, standing orders and the contract with a lawyer or HR adviser before deciding.

  2. 2

    Choose the basis

    Probation, notice under the contract, redundancy, or misconduct after a completed inquiry. Pick the one that matches the facts.

  3. 3

    Set the dates and notice

    Enter the last working day and whether notice is served, paid in lieu or handled as the contract says.

  4. 4

    Name the clause

    Refer to the termination clause of the offer or appointment letter, if you can.

  5. 5

    List what comes back

    Add the company property to return and the person to contact with questions.

  6. 6

    Deliver it in person

    Hand over the signed letter in a private meeting, get a signed acknowledgement, and email a PDF the same day.

Lawful or risky: the high-level picture

There is no single rule for ending employment in India. What you must do depends on who the person is and where they work. The rules differ by employee category: someone who counts as a 'worker' or 'workman' under labour law is protected very differently from someone in a genuinely managerial or supervisory role. On top of that sit your state's Shops and Establishments law, any standing orders that apply to your establishment, and the Labour Codes.

Redundancy needs particular care. Ending the employment of certain workers because their role is no longer needed is retrenchment, and it has statutory requirements of its own (dealt with in the Industrial Relations Code, 2020). Depending on the worker and the establishment, these can cover notice, compensation, the order in which people are let go, and in some cases prior permission. Do not rely on a template to tell you which apply; ask your HR or legal adviser before you decide.

Whatever the category, a termination is far easier to defend when it follows the contract, the process was fair and documented, and the letter says only what you can prove.

Lower risk
Ending employment exactly as the contract and your policies allow, with notice given or paid as the contract says, and settlement processed properly.
Higher risk: misconduct without a proper process
Dismissing someone for misconduct without telling them the charges in writing, giving them a fair chance to reply, and inquiring into it.
Higher risk: redundancy that is not real
Calling a role redundant and then hiring someone else into it, or picking who goes without a fair, consistent basis.
Higher risk: protected situations
Ending employment of someone on maternity or medical leave, or shortly after they raised a harassment, safety or whistleblowing complaint. Get advice first, every time.
Higher risk: a letter that says too much
Reasons, opinions or accusations in the letter that you cannot back with documents.

Termination letter, resignation acceptance or relieving letter?

These are often confused, but they record different events. Who decided the employment should end is the main difference, and it changes what the letter can safely say.

Termination letterResignation acceptance letterRelieving letter
Who ended the employmentThe companyThe employeeEither: issued once the person has left
What it recordsThe decision, the basis, the last day and noticeThat the resignation was accepted and the last day agreedThat the person is relieved of duties and handover is done
When it is issuedWhen the decision is communicatedSoon after the resignation is receivedOn or after the last working day
Risk levelHighest: may be challengedLowLow, if the facts are right
Shown to future employers?RarelyRarelyYes, usually

Which basis to choose

Choose the basis that matches what actually happened. The generator changes the wording for each, and every version stays factual: it records the decision rather than arguing it.

During probation
The person has not been confirmed and the contract allows the probation to be ended. Check what the contract says about notice during probation.
With notice under the contract
A no-fault ending under the contract's termination clause. Name the clause if you can.
Role made redundant
The position itself is no longer needed. Check the retrenchment rules for the person's category before you issue it.
Misconduct, after an inquiry
Only after a written charge sheet or show-cause notice, a chance to reply, and an inquiry with recorded findings. Never use it as a shortcut.

How to deliver a termination letter

How the letter is delivered matters almost as much as what it says. Tell the person in a private meeting first, with someone from HR present, and hand over the signed letter in that meeting. Do not let them find out from a revoked login or a colleague.

Ask them to sign a copy to acknowledge receipt. Signing acknowledges that they received it, not that they agree with it, so say that if they hesitate. Email a signed PDF the same day so there is a dated record. If they are remote or absent, send it by email and by registered post or courier to the address on file.

Plan the practical side before the meeting: when system access ends, how their personal belongings and the Company's laptop come back, what the team is told, and who they can contact with questions.

What goes wrong

Most disputes over terminations start with the process or with a sentence in the letter, not with the decision itself.

Reasons that cannot be proved
Every accusation in the letter is something you may later have to show evidence for. Keep it to the decision and the facts.
A misconduct label with no inquiry
Calling it misconduct without charges, a reply and findings is the fastest route to a challenge.
Ignoring the employee's category or state rules
The contract alone may not be enough. Check the rules for the category, the state and any standing orders.
Notice that does not match the contract
A last working day that does not fit the notice clause, or notice pay promised but not paid.
Holding back settlement or documents
Delaying the full and final settlement, or keeping original certificates, turns a separation into a dispute.
Mixing it with a resignation
Pressuring someone to 'resign instead' and then recording it as a resignation creates a record that may not survive scrutiny.

Received a termination letter? What to check and ask for

You do not have to agree with a termination letter to acknowledge receiving it. Read it calmly, keep a copy, and check these points before your last day.

The basis and the clause
Which reason is given, and which clause of your offer or appointment letter it relies on. Compare it with your own copy.
Your last working day and notice
Whether notice is to be served or paid in lieu, and whether that matches your contract.
Your settlement statement
Ask for a written full and final settlement statement showing pay, leave, any notice pay and any deductions.
Your documents
Ask for your relieving or experience letter, payslips, Form 16 and the exit date to be updated for your PF account.
For misconduct
Ask for copies of the charge sheet, your reply and the inquiry findings if you have not received them.
If something seems wrong
Reply in writing with your concerns and keep everything. If it cannot be resolved, speak to a labour lawyer.

Frequently asked questions

What should a termination letter include?

The employee's name and designation, the decision to end the employment and its basis, the last working day, how notice is handled, a line on full and final settlement, return of company property, continuing confidentiality obligations, and who to contact with questions. It should be signed by someone authorised to act for the company.

Can an employee be terminated during probation in India?

Usually the contract allows it, often with a shorter notice period, but probation does not switch off every protection. Check what your offer or appointment letter says about notice during probation, and whether any standing orders or state rules apply to the person.

Do I have to give a reason in the termination letter?

For a no-fault termination under the contract, the letter can simply refer to the termination clause. For redundancy or misconduct, the basis is part of the decision and should be stated factually. Whatever you write, make sure you can back it up with documents.

What is pay in lieu of notice?

Instead of asking the person to work their notice period, the company pays them for it and the employment ends sooner. Whether you can do this, and how it is calculated, depends on the contract, so check it with your HR or payroll adviser.

Is redundancy the same as retrenchment?

They overlap. Retrenchment is the legal term for ending the employment of certain workers for reasons other than misconduct, such as a role no longer being needed, and it has statutory requirements. Which ones apply depends on the person's category and the establishment, so take advice before you proceed.

Can I terminate an employee for misconduct without an inquiry?

It is very risky. The usual expectation is a written charge sheet or show-cause notice, a fair chance to reply, and an inquiry with recorded findings before a decision. Standing orders or your own policies may set out the steps. Get advice before you skip any of them.

Does the employee have to sign the termination letter?

No, but you should ask them to sign a copy to acknowledge receipt. Signing confirms they received it, not that they agree. If they refuse, note that on your copy, and email a signed PDF so there is a dated record.

When is the full and final settlement paid after termination?

There are legal timelines for paying final wages, and they have changed with the Labour Codes, so check the current rule for your company with your payroll adviser. The letter itself should only say that settlement will be processed as per company policy and applicable law.

Should a terminated employee get a relieving or experience letter?

Yes, a factual experience letter with their dates and designation is good practice and avoids a second dispute. The usual resignation-acceptance wording does not fit, so adjust it to what actually happened.

Can a termination letter be sent by email?

Yes. Electronic records are recognised under the Information Technology Act, 2000, and most companies now send a signed PDF. Tell the person in a meeting first where you can, and keep the email and any delivery record.

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