Importance of properly drafting a termination letter
On many occasions, companies tend to underestimate the importance of properly drafting a termination letter, without knowing that the termination letter will define the subject matter of the debate in a potential court proceeding, in accordance with the provisions of the second paragraph of Article 500 of the Labor Code:
“In the event of dismissal, the employer may only allege as justifying facts for the termination those indicated in the termination letter delivered to the employee, in the manner provided in Article 35 of this same Code, or those taken into account in the formal act of dismissal, when it has been preceded by a written procedure.”
Delimitation of the court proceeding
In this regard, the drafting of the termination letter must be clear and concise regarding the misconduct committed by the employee that motivates the decision to end the employment relationship, under penalty that a drafting error or omission may limit the possibility of defense in the court proceeding.
“It is important to highlight that the wording observed in the termination letter is not adequate, mainly with respect to the fact, or facts, on which the dismissal is based, since it does not include circumstances of time, manner, and place; that is, it does not establish the date on which the alleged event occurred, nor does it state the manner in which it occurred —a clear and specific chronological description of the actions or omissions that constitute the alleged act— nor the place where it allegedly happened. This is relevant when applying the provisions of Article 35 ibid., namely the legal limitation of what may be the subject of debate in the judicial proceeding at hand.” (Resolution 3528-2025 of the Second Chamber of the Supreme Court of Justice, issued at 4:00 p.m. on October 15, 2025)
Termination letter in cases with and without employer liability
It is important to mention that this obligation to substantiate the termination letter is only required when dealing with a termination without employer liability, and not when the reason for termination is the employer’s own will. In this second scenario, which involves a termination with employer liability, the letter does not require further substantiation beyond the employer’s own will, in accordance with Article 85 subsection d) of the Labor Code.
In this regard, the Second Chamber of the Supreme Court of Justice has stated:
“The Chamber considers that the position of the first-instance judge —in the sense of ignoring the objective reasons for the termination alleged in the answer to the complaint because they were not included in the termination letter— is mistaken, since the obligation to provide the employee with a termination letter detailing the misconduct committed —under penalty of not taking it into account at trial— Article 35 of the Labor Code, applies only in cases of disciplinary dismissals. In this case, the situation is different, namely a termination for failure to pass the probationary period. Therefore, what is attributed to the claimant are not technically instances of misconduct, but deficiencies in the performance of his duties, which revealed an inability to perform the functions for which he was hired. Accordingly, this Court will examine the evidence in order to determine whether the defendant was able to prove such deficiencies, which would constitute objective reasons capable of eliminating the discriminatory motive attributed to the dismissal.” (Resolution 1509-2021 of the Second Chamber of the Supreme Court of Justice, issued at 10:10 a.m. on July 7, 2021). (In a similar sense, see Ruling 3000-2024 at 12:20 p.m. on November 8, 2024)
Service certificate
However, this does not exempt the company from the duty to provide a certificate, or service letter, explaining the reason for termination, even in the case of termination with employer liability, if the employee so requests, in accordance with Article 35 of the Labor Code, which provides:
Article 35.- Upon the expiration of any employment contract, the employer, at the request of the employee, must provide a certificate stating:
a) The date of entry and departure.
b) The type of work performed.
If the employee so wishes, the certificate must also state:
c) The manner in which the employee performed.
d) The causes of the withdrawal or termination of the contract.
Thus, although the reason for termination may be omitted in a termination letter with employer liability, the service certificate must detail the cause if requested by the employee.
Documentation of objective reasons
For this reason, even when a termination with employer liability is carried out, it is important to have the objective reasons supporting the employee’s termination documented.
In addition to the foregoing, although when carrying out a termination with employer liability the employer pays the statutory items of Christmas bonus, vacation, notice period, and severance, this does not exclude the possibility that the employee may file a court proceeding alleging that the termination was due to a discriminatory situation, a proceeding that may be accompanied by a provisional reinstatement while the merits of the case are resolved.
On some occasions, a well-founded termination letter may dissuade the employee from filing a discrimination claim by eliminating any conjecture regarding the real reasons behind the generic concept of “employer’s will.”
Termination letter as a preventive tool for companies
In summary, although a termination with employer liability may be carried out by citing only Article 85 subsection D of the Labor Code, substantiating the letter with objective reasons that justify the termination is a recommendation aimed at avoiding the filing of court proceedings when the person being terminated is not informed of the reasons for the decision.
Taking into account the importance of the termination letter, it is recommended to seek advice from a specialist in employment law regarding the procedure to follow and the most appropriate way to draft a termination letter before proceeding with its delivery.
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FAQ on the importance of the termination letter
It is important because it defines the facts that may be discussed in a potential court proceeding. The employer may only rely on the facts stated in the letter or those considered in a prior written procedure.
In disciplinary terminations, the letter should clearly and concisely describe the employee’s alleged misconduct, including circumstances of time, manner, and place.
A poorly drafted termination letter may limit the employer’s ability to defend itself in court, especially if relevant facts were omitted or described inadequately.
No. The obligation to detail misconduct generally applies to disciplinary terminations or terminations without employer liability. In a termination with employer liability, the letter may rely on the employer’s will.
A termination letter communicates the end of the employment relationship. A service certificate, when requested by the employee, must state information such as dates of employment, type of work performed, and, if requested, the reasons for termination.
Yes. A well-founded termination letter may help reduce uncertainty about the employer’s reasons and discourage claims based on alleged discrimination or lack of justification.