Employer's Letter of Termination

The Employer's Letter of Termination is a letter sent by an employer to an employee notifying them about their termination from employment. The employer is the party that retains the services of an employee as outlined in an Employment Contract. The employee is the person employed to render specific services to an employer.

According to the law, the general position is that an employer is entitled to terminate a contract of employment at anytime and without stating reasons for doing so, provided the appropriate notice is given to the employee. However an employer may choose to terminate an employment contract for the following reasons:

• Termination for reasons solely connected to the individual employee: This is when an employee is terminated for misconduct, harassment, mismanagement of funds, incompetence, or other actions caused by the employee. This is called dismissal. Typically, when an employee is terminated, the employee is entitled to any unpaid salary, accrued salary until the effective date of termination, etc. However, the employer is not required by law to issue a notice of termination/dismissal or payment in lieu of notice.

• Termination reasons unconnected to the actions of the employee: The employer may terminate the employee's contract due to the sale of its business/shares to a new employer (such as an acquisition, merger, etc.), redundancy, etc. Under the law, the employee is entitled to the agreed redundancy or severance pay, any unpaid salary, accrued salary until the effective date of termination and any other compensation in accordance with their employment contract.
  
  Also, the employer is required to issue adequate notice or payment in lieu of notice to the employee of its intention to terminate the employment.

Procedure for Termination of Employment

Before an employer terminates the contract of an employee, the employer is required to follow the procedures for their termination in accordance with their employment contract as failure to do so may make the employer liable for wrongful termination. For example, if the contract provides for the issuance of notice, the employer must issue the notice to the employee prior to their termination and the notice period must be in accordance with the employment contract.

In the case of dismissal (i.e. termination on reasons solely based on the employee), the employer is required to follow the required procedure prior to termination The employee should be given the option to defend themselves and answer any allegation brought against them. It is important that the employer follows the procedure in accordance with the employee's contract.

How to use this document

This document can be used by any employer that wishes to terminate the employment of their employee.

This document requires the following information: the names and addresses of the employer and employee, the reason(s) for the termination, the notice period, the procedure/steps followed prior to the termination, and any compensation the employee is entitled to (if any).

After completing this document, the employer should sign at least this document and send one signed copy to the employee. The employer should keep the other copy for record purposes. If the employer is a company or any other organization other than a company, an authorized representative (a person who is authorized to send letters of this nature, for example, the human resources officer, director, etc.) should sign the letter on behalf of the employer.

Note that the employer can send this document to the employee as a letter or by email.

Applicable laws

The following laws apply to this document:

• The Labour Act, 2004 which regulates employment in Nigeria;
• The Constitution of the Federal Republic of Nigeria, 1999 (As Amended);
• The Employee Compensation Act.

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