Notice of Termination

Definition - What does Notice of Termination mean?

Notice of termination is a document made by an employer and sent to an employee to inform the latter that he or she will no longer work for the former on a specific date in the future. Either changes in the business or unsatisfying employee performance is the reason for the dismissal.

Insuranceopedia explains Notice of Termination

The longer the employee works for an employer, the more advanced the termination notice. Along with the notice (or sometimes in lieu of), the employee also gets a termination pay. The employee may also get benefits from an employee benefit plan like the Employee Stock Ownership Plan or ESOP. The notice is considered invalid if it is sent when the employee is on sick leave, on a vacation leave or is temporarily laid off.

The employer does not have to send a notice if he or she thinks that the termination is based on just cause. A criminal act or a flagrant violation of a business policy can be considered just cause. Also, when an employee tenders his or her resignation, he or she is not entitled to either a notice or a termination pay.

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