To send an email automatically to candidates when are rejected, you can create an action. Here's how:
Go to the job you want to set up an automatic email for.
Go to Job Setup on top right, then go to the Stages tab.
There, click the Add an action button for the Rejected stage..
Choose Email, choose the email template you want to send, and save that action. You can also choose to delay the email by a few minutes, hours, or even a day.
You're done! When a candidate moves to the Rejected stage for the first time, they will receive that email.