The termination letter and the resignation acceptance: the legal difference and the correct form of each

Why a written letter, not a verbal decision

The Labor Law does not prevent an employer from ending a contract, but it requires a clear path: termination without a legitimate ground provided in the law gives rise to compensation, and the notice period stated in the contract must be respected. The written letter is what proves the business took the correct path: it documents the reason, the date, and the notice, and forecloses a different account of events before any body that later reviews the case.

The termination letter: when, and what it contains

The business uses a termination letter when the decision to end the contract is its own: the role is no longer needed, the probation period was not passed, or a disciplinary ground after its legal path is complete. A correct letter includes:

• The employee's details, the contract referred to, and its start date.
• The reason for termination, precisely worded: the written reason is what the letter will later be judged on.
• The effective date and the notice period, or payment in lieu, per the contract.
• Reference to settling entitlements and the end-of-service award under the law.

Disciplinary dismissal is a separate path with its own requirements: disciplinary penalties are governed by Article 71 and following of the Labor Law, and dismissal cannot rest on violations that were not documented at the time. See the warning letters guide before any disciplinary termination.

The resignation acceptance: why silence is not enough

When an employee submits a resignation, many business owners assume the file is closed by the request alone. In fact the business needs a written acceptance letter that fixes three things: that the resignation was the employee's own act, that the business accepted it, and the end date of the relationship on which entitlements and notice are calculated. Without that documentation, the door stays open to a later dispute over how the relationship ended: was it a resignation or a termination? The difference between the two labels directly affects the award.

How the path affects the end-of-service award

The end-of-service award is calculated under Articles 84 and 85 of the Labor Law: the general rule is half a month's wage for each of the first five years and a full month for each year after them, with fractions of a year counted proportionally. If the relationship ends by the employee's resignation, Article 85 applies graduated proportions of that award based on length of service. This is why how the letter characterizes the end of the relationship is not a formality: it is the basis of the calculation.

For the full numeric calculation with worked examples, see the end-of-service calculation guide.

After the letter: the final settlement

The letter ends the relationship; the settlement closes the file. After the termination letter or the resignation acceptance, the business documents the settlement of all entitlements in a final release signed by both parties: remaining wages, accrued leave balance, and the end-of-service award. The signed release is what prevents a later claim for amounts already settled, and Sighaty has a dedicated template for it, E-13.

Common mistakes when ending employment

• A verbal termination with no letter, then discovering there is no evidence of the reason, the date, or the notice.
• Writing a vague or inaccurate termination reason that does not hold up under review.
• Accepting a resignation without a written letter fixing the end date of the relationship.
• Jumping to disciplinary dismissal without first taking the documented warnings path.
• Paying out entitlements without a signed final release, leaving the file open to reopening.

Frequently asked questions