How to Make an Employee Termination Agreement Form

In every business, employers want to make sure that their employees understand that the company can terminate their employment in the event they do anything that could either harm the company and its employees, or if they continuously fail to meet the standards and expectations of the company.

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However, employers also want to make sure that they are able to terminate these employees without being charged with unfair termination or any other charges that could lead to a lawsuit. That’s why it’s important for employers to create an employee termination agreement form, and this article is going to teach you how to do just that.

Sample Termination Agreement Form


How to Create Your Termination Agreement

If you’re going to create this type of document, then you have to write it to be as detailed as possible so that you can point out that you and your company have every right to terminate an employee. Because as mentioned earlier, failure to do so can result in legal consequences that could very well jeopardize your business. So, if you’re going to come up with a termination agreement, then you have to make sure that you provide the following information:

1. The Employee’s Basic Information

As it states, this is where you provide all basic information about the employee whom you wish to go through and read the termination agreement. This would mean that you’re going to have to provide the employee’s name, the name of the company that he/she will be working for, and the employee’s position and possibly his/her job description. You want to be as detailed as possible as well as make sure that there are no errors with any of the information in this section to ensure that it’s the right person who will sign the sample agreement.

2. Valid Reasons for Employee Termination

It’s obvious that you will not be able to terminate any employee unless there are plausible and justifiable reasons to do so. Just like with the previous section, you want to make sure that you’re as specific as possible when pointing out on what grounds an employee can be put up for termination. If you miss out in mentioning even one little problem in the document, then you will not be able to fire an employee for the particular reason that you did not point out in the document unless you would like to face certain charges. So, here are some examples that you can place as valid reasons for termination:

  • Employee incompetence. If the employee continues to show lack of productivity or poor quality work even after numerous warnings or after having gone through employee training, then your company has the right to terminate him/her.
  • Any form of insubordination. Any employee who decides to show disrespect, dishonesty about any information that he/she shares about the company, or who goes against the words of someone with higher authority in an unprofessional manner will be subject to termination.
  • Breaking company policies. The purpose of having these policies is to ensure that there is order maintained within the workplace. Depending on the severity of the policy the employee has broken, he/she may be put up for termination.
  • Attendance issues. Employees are required to be on time and work the number of hours as designated on their employment contract. If they fail to show up for work frequently or if they incurred multiple instances of being tardy, then their termination will depend on the attendance policy of your workplace.
  • Theft. It should be known that every employee who is caught in the act of taking company property or any personal belongings that he/she does not own without proper authorization will immediately be terminated. You may also like employment agreements.
  • Any criminal behavior within the workplace. Other than theft, employees can be terminated if they involve themselves in activities that could very well threaten the company’s existence. A good example would be sharing vital company information with anyone outside of the company even after the employee has signed the non-disclosure agreement.
  • Discriminatory behavior in the workplace. A company would always want to ensure that the workplace is one where everyone can feel safe and secure. So, any employee who decides to conduct acts of sexual harassment, bullying, religion shaming or any other act that can be described as discriminatory against another will be terminated by the company. The employee may also face certain charges should his/her victim or victims wish to file a case. You may also like employee agreement samples.
  • Any physical violence or threats. If an employee were to hurt another or if any threats that the employee makes in regards to another person’s life will be terminated. Also, the employee who has committed these acts may be charged with assault by the victim or face any charges that suit the situation should the victim or the company wish to do so. You may also like free agreement forms.

3. Return of Company Property

This is very important as you do not want the employee to leave with any property that belongs to the company. You will have to state in your termination agreement that any company property that the employee has been assigned to or ones which will be in the possession of the employee must be returned immediately should the employee ever be terminated by the company. You have to make sure that you are very clear on this as you do not want the terminated employee to have any access to the establishment or to important company files. If you would like, you can be specific by making a statement such as “these include, but are not limited to, the following…” where you then provide multiple examples of the different types of company property that may be in the possession of the employee. You may also like sample employment agreements.

4. Statements Regarding Vacation Time and the Employee’s Final Paycheck upon Termination

If the employee has accrued any vacation time, then chances are that you are going to have to pay for any that the employee has accrued. However, the law and the employee’s position may change this. If the employee is working part-time or if this person is just a contractor, they may not have to pay out any unused vacation or sick leaves. Just make sure that you go through your country’s laws in regards to this particular issue. You may also like employment agreement templates.

State that the employee will be paid what he/she is owed by the company. Also, state the methods in which the employee will be paid and he/she can expect how to receive it in the event of termination.

5. Statements Regarding Health Insurance and Other Benefits

You want to make sure that the employee understands that when he/she is fired, there’s still the matter of the health insurance and other benefits that have to be dealt with. You’re going to have to provide a clear outline should the employee be employed long enough to receive these benefits, and how they are going to continue and when they are going to run out when the employee is terminated. You may also like agreement forms in pdf.

6. The Disciplinary Actions Should the Employee Commit Any Offenses

Of course, you can’t just fire an employee before knowing what he/she has done both in and out of the workplace. And also, you can only fire employees if the problem is big enough to actually endanger the company. There is always a way to deal with problems and you want to point out the consequences that the employee will face will entirely depend on the severity of the situation.

  • A verbal warning. This is where an employee has made minor mistakes or caused little issues such as coming to work 5 minutes late frequently or is barely hitting quota at the end of every month.
  • Final written warning. This is when the employee still fails to meet the expectations of the company even after the written warning. It’s basically the final straw before the employee is terminated.
  • Termination letter. If it has been seen that the employee has made no major improvements or if the employee has committed acts that could endanger the company and everyone it, then they will be sent this letter which will immediately terminate their employment.

7. Statement Regarding Employees Given the Chance to Explain Themselves

Every company has to give their employees the benefit of the doubt. Because what if the employee had not shown up for work, but only because of a tragic incident within the family that involves death? Provide the sample statement that an employee may provide ample reason and evidence should they break particular policies within the company and that they will be pardoned if they are all sound.

If you would like to know more on this particular topic or anything related to it, then all you have to do is go through any of our available articles until you are able to find the information that can help you and your business out. You may also like printable agreement forms.

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