Create a legally compliant termination letter for England and Wales. Covers fair dismissal grounds, statutory notice periods, payment in lieu of notice, and the ACAS Code of Practice with our free UK template.
An employee termination letter is a formal written notice from an employer to an employee confirming that their employment is being brought to an end. In the UK, it sets out the reason for dismissal, the effective date of termination, the notice period being given (or payment in lieu), and the employee's right of appeal. It serves as a definitive record that the employer has followed a fair and transparent process.
Under the Employment Rights Act 1996, employers must have a potentially fair reason for dismissal and must act reasonably in carrying out the dismissal. The five fair reasons recognised by law are capability or qualifications, conduct, redundancy, statutory illegality, and some other substantial reason (SOSR). The ACAS Code of Practice on Disciplinary and Grievance Procedures further requires employers to follow a fair process, including investigation, a formal hearing, and a right of appeal.
A well-drafted termination letter protects both parties. For the employer, it demonstrates compliance with statutory requirements and reduces the risk of a successful unfair dismissal claim at an employment tribunal. For the employee, it provides clarity on their entitlements, final pay, and the steps they can take if they wish to challenge the decision. Whether the dismissal relates to poor performance, misconduct, or redundancy, a clear and compliant letter is an essential part of the process.
Doxuno's employee termination letter template includes all essential sections needed to formally end an employment relationship in compliance with UK employment law. Each section can be customised to match the specific circumstances of the dismissal.
Writing a compliant termination letter requires precision and attention to UK employment law. Our template guides you through each required section so you can produce a professional letter that meets statutory requirements. Follow these five steps.
Dismissing an employee in the UK is governed by statute, case law, and the ACAS Code of Practice. Understanding these requirements is essential to reducing the risk of an unfair dismissal claim and ensuring the process is both fair and lawful.
Important: This template is provided for informational purposes and does not constitute legal advice. For complex dismissals or if you are unsure about your specific situation, consult a qualified employment solicitor or seek guidance from ACAS.
Reviewed by legal professionals. The content on this page and the template clauses have been reviewed by licensed solicitors in England and Wales to ensure accuracy and compliance with current UK employment law.
The Employment Rights Act 1996 (Sections 94–98) provides that a dismissal is only fair if the employer can show a potentially fair reason. The five categories are: capability or qualifications (including persistent illness), conduct (misconduct or gross misconduct), redundancy (where the role is no longer needed), statutory illegality (where continued employment would contravene a statute, such as loss of a driving licence for a delivery driver), and some other substantial reason (SOSR), which is a catch-all covering situations like a business reorganisation or a breakdown in trust.
Employees generally need at least two years' continuous service to bring an ordinary unfair dismissal claim before an employment tribunal. However, there is no qualifying period for automatically unfair dismissals, which include dismissals connected to pregnancy, maternity leave, whistleblowing, trade union activities, and asserting certain statutory rights. Employers should follow a fair procedure regardless of an employee's length of service.
Under Section 86 of the Employment Rights Act 1996, the statutory minimum notice period is one week for employees with between one month and two years of service, and one additional week for each complete year of continuous employment after that, up to a maximum of 12 weeks. The employment contract may provide for a longer notice period, and the longer period always applies. If the employer wishes to end employment immediately, a PILON clause must be in the contract or the employer risks a breach of contract claim.
Where the employment contract contains an express PILON clause, the employer can pay the employee their basic salary and contractual benefits for the notice period and terminate employment immediately. Without an express clause, making a payment instead of requiring the employee to work their notice may amount to a breach of contract. Tax treatment of PILON payments depends on whether they are contractual (subject to tax and NI) or non-contractual (post-employment notice pay rules under Section 402D ITEPA 2003 apply).
Produce a professional, legally compliant employee termination letter in minutes. Our UK template covers fair dismissal, statutory notice, PILON, and the ACAS Code of Practice so you can handle the process with confidence.
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