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How To Write a Termination Letter
Terminating someone’s employment is never easy, but doing it incorrectly can expose your organization to significant legal risk. A clear, compliant termination letter is not only good practice, it is a critical step to meeting your obligations under Ontario’s Employment Standards Act, 2000 (ESA).
At Achkar Law, we help Ontario employers prepare termination letters that protect their organization and maintain professionalism during challenging transitions. Here’s what you need to know.
What Is a Termination Letter?
A termination letter is a formal written notice ending the employment relationship. Under Ontario law, written notice or pay in lieu is required for most terminations without cause, and a termination letter is an important part of that process.
A well‑drafted letter should:
- Confirm that employment is ending and the effective date
- Briefly state the reason, if appropriate
- Outline final pay, vacation pay, and any statutory severance
- Include instructions for returning company property
- Refer to any continuing obligations under policies or contracts
What Should Be in a Legally Compliant Termination Letter?
To reduce risk and comply with Ontario law, include the following:
- Clear Statement: Confirm that employment is ending.
- Effective Date: State the employee’s final day of employment.
- Reason (optional): If you include a reason, use objective, neutral language. Avoid unnecessary detail that could create disputes.
- Final Pay Details: Set out last wages, vacation pay, and severance pay if owed under the ESA or the employment contract.
- Return of Property: List items (e.g., keys, laptops) with deadlines for return.
- ESA and Policy References: Confirm compliance with the ESA and any contractual entitlements.
- Post‑Employment Obligations: Note ongoing obligations such as confidentiality or non‑solicitation clauses, if applicable.
- Signatures: Include the employer’s signature and provide space for the employee to acknowledge receipt.
ESA Requirements to Remember
In Ontario:
- Notice or Pay in Lieu: Minimum notice depends on length of service (e.g., one week after three months, up to eight weeks).
- Severance Pay: Owed only if the employee has 5+ years of service and your organization’s payroll is $2.5M+ or if there is a mass termination.
- Benefit Continuation: Benefits must be continued through the statutory notice period.
Sample Wording
“This letter confirms that your employment with [Company Name] will end on [Date]. Your final compensation will include wages up to [Date], accrued vacation pay, and [statutory severance if applicable]. Please return all company property by [Date]. If you have questions, contact [Name and Contact Info].”
Maintain a respectful, professional tone throughout.
Step‑by‑Step: How to Write a Termination Letter
- Start with the Basics
Confirm the termination and final date. - Add a Reason (if appropriate)
Keep it brief and factual, such as restructuring or position elimination. - Explain Final Pay
Outline last wages, vacation pay, and severance if owed. - List Property Return Requirements
Specify items (keys, devices) and return timelines. - Address Legal and Policy Points
Reference ESA compliance, contractual terms, and post‑employment obligations. - Include Contact Information
Provide a contact for any follow‑up questions.
Why This Matters
A vague or poorly drafted termination letter can lead to:
- Wrongful dismissal claims
- ESA violations and penalties
- Human rights complaints
- Reputational harm
A clear, well‑structured letter helps demonstrate fairness, reduce liability, and maintain solid documentation.
High‑Risk Terminations: When to Call a Lawyer
Consult an employment lawyer if the termination involves:
- Allegations of just cause
- Human rights or harassment complaints
- A workplace investigation in Ontario
- Complex severance packages or significant contractual obligations
How Achkar Law Can Help
At Achkar Law, we regularly assist employers with:
- Drafting and reviewing termination letters
- Managing terminations that involve workplace investigations
- Negotiating severance packages and minimizing legal exposure
Whether you are preparing for one termination or multiple layoffs, we can provide clear, customized legal advice tailored to your organization.
Contact Achkar Law Today
Need help drafting or reviewing a termination letter?
Our team of Employment Lawyers ensures your approach is professional, compliant, and risk-aware.
Phone Toll-free: 1-800-771-7882 | Email: [email protected]
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©
Workplace Law Topics: Termination of Employment