# Notice of Employment Termination: Meaning and Considerations

## What Is a Notice of Termination?

A notice of termination is what an employer uses to notify an employee as to the end of their [employment contract](https://www.investopedia.com/terms/t/terms-of-employment.asp). More broadly, it may also refer to the formal notification of the end of a contract between two or more parties. While a notice of termination usually is provided to an employee for reasons unrelated to their job performance—for example, because business conditions necessitate layoffs or downsizing—it may also be given to an employee for poor job performance or misconduct.

In certain cases, however, employers are required to give workers advance notice of mass layoffs or a plant closure, especially if they are a member of a union.

Another term for notice of termination document is "[pink slip](https://www.investopedia.com/terms/p/pink-slip.asp)" or "termination letter."

### Key Takeaways

*   Employers who hire “at-will” workers are not legally bound to give advance notice to an employee who is being fired.
*   Giving employees a termination notice helps a company maintain a positive image, especially if they provide the reasons for the termination.
*   There is a law on the books, the WARN Act, which requires employers (who have 100 workers or more) who are planning mass layoffs or have plans to close a factory or plant, to provide up to 60 days notice to its employees. 

## How a Notice of Termination Works

In the United States, employers are not required to give notice to a worker prior to their termination as per the [Fair Labor Standards Act (FLSA)](https://www.investopedia.com/terms/f/fair-labor-standards-act-flsa.asp). All American workers are considered "at-will," which means that an employer can terminate employees for any reason, without establishing just cause, [as long as the reason is not illegal](https://www.investopedia.com/terms/w/wrongful-termination-claims.asp) (such as gender, religious or racial discrimination). The reasoning is that an employee also has the right to leave a job for any reason at any time.

> **Important**
>
> If your job is terminated but you are under a union contract, your employer is legally bound to give you a notice of termination; otherwise, there is no law that individual companies must provide their "at-will" workers with a notice of termination.

In the U.S., the only notifications legally required to be included in a notice of termination are related to the [Consolidated Omnibus Benefits Reconciliation Act (COBRA)](https://www.investopedia.com/terms/c/cobra.asp) and the Worker Adjustment and Retraining Notification Act (WARN). A reason for termination need not be stated, though it tends to be a best practice if an employee has been [fired for cause](https://www.investopedia.com/financial-edge/1112/things-you-didnt-know-could-get-you-fired.aspx).

## How a Notice of Termination Works in Other Countries

In some countries, an individual who has been employed for a certain period of time must be provided with a notice of termination. For example, in Canada workers who have been employed with a company continuously for three or more months must be given written notice of termination by their employer, along with termination pay or a combination of both.

How long a notice period depends on the length of service. A notice of termination is not due, however, to an employee who is guilty of disobedience, willful misconduct or [neglect of duty](https://www.investopedia.com/terms/n/nonfeasance.asp).

## Timing of Termination Notice

An employer should provide a termination notice as soon as the decision to end an employee’s employment is confirmed. This ensures that both parties are aware of the situation and can prepare for the transition. Of course, the timing may never work out that cleanly (i.e. someone may be on vacation), but that is the general rule of thumb.

The required timing of a termination notice depends on several factors, including the type of employment contract, [company policy](https://www.investopedia.com/terms/c/corporategovernance.asp), and local labor laws. In many cases, employers are obligated to give a specific amount of notice based on the length of service or the terms of the employment agreement. For instance, some contracts stipulate that employees must receive two weeks' notice before termination, while others may require 30 or even 60 days' notice. In situations where no specific notice period is required, such as at-will employment in the U.S., notice may still be given as a courtesy to the employee.

In cases of mass layoffs or company downsizing, legal requirements such as the WARN Act mentioned above may come into play. This law mandates that employers give at least 60 days’ notice to employees before conducting mass layoffs or plant closures, allowing them time to find new work. Failure to provide this notice can result in legal penalties and damage to the company’s reputation.

In situations involving misconduct or gross violations of company policy, immediate termination may be justified, and no advance notice is required.

## Notice of Termination Checklist

The following information is spread throughout this article; here's a more concise checklist of what a typicaly notice of termination would include:

*   **Termination Date**: Clearly states the last day of employment to confirm the official end date.
*   **Reason for Termination**: If applicable, specifies the reason for termination, such as performance issues or company changes, to ensure transparency.
*   **Severance Details**: Includes any severance pay or benefits being offered, providing clarity on what the employee will receive.
*   **Final Paycheck Information**: Outlines the timing and contents of the final paycheck, including any accrued vacation days or bonuses.
*   **Benefits Information**: Addresses the status of health insurance, [retirement plans](https://www.investopedia.com/retirement-planning-4689695), and any other benefits, ensuring the employee understands their post-employment options.
*   **Company Property**: Reminds the employee of the requirement to return any company property, such as laptops, phones, or other items.
*   **Next Steps**: Details any necessary legal steps or procedures for appealing the termination, ensuring all necessary actions are clearly outlined.

## Termination With vs. Without Cause

Termination with cause refers to situations where an employer ends an employee's contract due to specific reasons related to the employee's behavior or performance. Common causes for such termination include misconduct, poor performance, violation of company policies, or criminal behavior.

On the other hand, termination without cause occurs when an employer decides to end an employee's employment for reasons unrelated to the employee's performance or behavior. This is more your common layoff or company downsizing effort.

The paperwork for a termination with cause differs significantly from that of a termination without cause. In a termination with cause, the documentation typically includes a detailed explanation of the specific misconduct, performance issues, or violations of company policy that led to the decision. This includes any prior warnings or disciplinary actions previously taken. It may also require additional legal language to protect the company from potential claims of wrongful termination.

Termination without cause generally includes less detailed justification, focusing instead on procedural aspects such as the employee’s last day, severance details, and any continuation of benefits. There may not be much to explain or protect against except a company making a business decision. Often, the most important part may be regarding [unemployment](https://www.investopedia.com/terms/u/unemployment.asp) benefits.

## Niche Termination Situations

Employees hired for temporary or [seasonal positions](https://www.investopedia.com/terms/s/seasonality.asp) typically do not require a termination notice upon the end of their contract. These arrangements are often defined with a specific end date or completion of a project, meaning the employment relationship automatically concludes at that time. In such situations, both parties understand the temporary nature of the role, and a formal termination notice is unnecessary.

Employees in a probationary period may not be entitled to a termination notice. During this time, employers often evaluate the employee’s performance and fit within the company. If the employer decides to terminate employment during this period, they can typically do so without providing notice, as the probationary nature of the position implies that either party can end the relationship more freely.

Last, some employment contracts may explicitly state that no notice is required upon termination. In these cases, the employee and employer agree that the employment can be terminated without any advance notice, allowing for immediate separation. This arrangement somewhat overlaps an at-will employee, though it's not a default condition or assumed like an at-will agreement.

## Special Considerations

When a party to a contract wants to notify another party (or parties) of their [intent to end their relationship](https://www.investopedia.com/terms/g/gardening-leave.asp), as well as disclose a date for contract expiration, they will send a notice of termination. Simply put, it is a formal declaration to another party that you plan to end a contract. It acts as a public record of such an action and can help resolve disputes should they arise later.

Such a notice will contain the terms that permit the termination of an agreement. A notice of termination (also called a "notice of cancellation of contract" or "contract termination letter") serves as a courtesy to other parties and can help preserve relationships.

## What Is a Notice of Employment Termination?

A notice of employment termination is a formal document or communication provided by an employer to an employee indicating that their employment will end on a specified date. It outlines the employer’s decision to terminate the working relationship, often citing reasons such as company restructuring, performance issues, or economic factors.

  

## How Much Advance Notice Is Required Before Termination?

The amount of advance notice required depends on the laws of the country or state, the type of employment contract, and the circumstances of the termination.

## Can an Employee Challenge a Termination Notice?

Yes, employees can challenge a termination notice if they believe it was issued unfairly, unlawfully, or in violation of their employment contract. Grounds for challenge could include discrimination, breach of contract, or lack of proper notice.

## What Should Be Included in a Termination Notice?

A termination notice should clearly state the termination date, the reason for termination (if applicable), any severance or final pay arrangements, information on benefits, and instructions regarding company property.

## The Bottom Line

A termination notice is a formal communication from an employer to an employee indicating that their employment will end on a specified date. It typically includes essential details such as the reason for termination, the last working day, and any information regarding severance or benefits. Providing a termination notice ensures clarity for both parties and can help facilitate a smoother transition out of the organization.

> **Article Sources**
>
> 1.  U.S. Code. "[29 USC Ch. 23: Worker Adjustment and Retraining Notification](https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter23&edition=prelim)."
>     
> 2.  U.S. Department of Labor. "[Handy Reference Guide to the Fair Labor Standards Act: Basic Wage Standards](https://www.dol.gov/agencies/whd/compliance-assistance/handy-reference-guide-flsa#1)."
>     
> 3.  National Conference of State Legislatures. "[At-Will Employment - Overview](https://www.ncsl.org/labor-and-employment/at-will-employment-overview)."
>     
> 4.  National Labor Relations Board. "[Employer/Union Rights and Obligations](https://www.nlrb.gov/about-nlrb/rights-we-protect/your-rights/employer-union-rights-and-obligations)."
>     
> 5.  Martin Law. "[Checklist of Required Documents for Departing Employees](https://employmentdefenselaw.com/checklist-of-required-documents-for-departing-employees/)."
>     
> 6.  The Ministry of Labour, Immigration, Training and Skills Development, Government of Ontario. "[Termination of Employment](https://www.ontario.ca/document/your-guide-employment-standards-act-0/termination-employment)."