France does not recognise termination at will and has strict laws that make ending employment more bureaucratic than most countries. There are a few situations where an employer is permitted to dismiss an employee, however, they require severe cause:
- Economic reasons (redundancy)
- Personal reasons (poor performance, misconduct)
- Mutual consent upon signing a termination contract
- This is an official document that must be sent to the regional directorates for Enterprise, Competition, Consumer Affairs, Labour, and Employment (DIRECCTE).
Companies that are having economic difficulties can terminate employment or make employees redundant based on economic grounds. They must either try to redeploy and retrain employees to avoid the dismissal or obtain their consent and provide them redundancy compensation and compensation for the notice period not served and unused vacation days. Before proceeding with the termination, the employer must invite the employee for an interview to discuss the situation with them and inform them of their rights, such as the reclassification leave if the company employs more than 1,000 people or the professional security contract (CSP).
The termination procedure includes an at-risk meeting (a meeting specifically for people at risk of termination due to the economic situation of the company ) with the employee.
Employers may end the employment of an employee who doesn't respect the company's rules or commits gross misconduct. This type of dismissal requires culpable behaviour by the employee. Employers must notify the employee of the discharge and explain the reasons behind it. The employee, in turn, must give notice as indicated on the employment contract or CBA.
Employers can choose to let employees go without serving their notice as long as they are reimbursed for it. In severe and gross misconduct cases, the employment is ended upon the dismissal notice's delivery and does not require compensation.
Employees are entitled to severance, except in the cases of serious and gross misconduct.
The employer and the employee must strictly follow these steps for mutual consent to be valid:
- They must hold at least one meeting to determine the termination conditions, including discussions regarding severance and gratuity, date of termination and notice. The employee can come accompanied by a staff member or an external employee advisor if there are no staff representatives within the company. The minimum compensation for the mutually agreed termination cannot be lower than 1/4 of a month's salary per year of seniority (1/3 for each year beyond ten years of service)—indemnity calculator. The CBA can set enhanced severance payments
- Once the employer and employee agree on the termination terms, they must fill out and sign a government form acknowledging their agreement. There is a 15 calendar days grace period where either party can change their minds
- After the period is over, the employer sends the form to the Work Inspectorate (DIRECCTE), which decides within 15 business days whether the process was valid or not. If the compensation is below the minimum legal requirements, the Work Inspectorate may reject the application
- If the Work Inspectorate approves it, the employment contract ends at either the end of the 15 open days or an agreed-upon date, whichever is later
Companies can exempt employees from working their notice period if they compensate them for it.
During termination, the employer must provide employees with the following documents:
- last payslip
- work certificate indicating the employee's dates of employment, position, and classification, including employment centre certificate (allows the employee to be covered by unemployment insurance), a receipt for the balance of anything outstanding such as paid time off and company profit-sharing and employee savings plans
- summary statement of all sums and securities saved.
If the employment contract has a non-competition clause, the financial compensation is also due at termination unless the clause is waived. The employer must also propose the continuance of the welfare and health insurance benefits and complete the forms and send them back to the insurer. The purpose is to maintain them for a certain period according to the employment contract's duration, at most for one year.
Apart from termination due to serious and gross misconduct, employees are entitled to a severance package that consists of dismissal indemnity, paid notice period and paid holidays indemnity (for unused accrued leave). Collective bargaining agreements often set higher severance compensation.
If a company fails to comply with the dismissal procedure or dismisses an employee without a genuine cause, a judge may challenge the dismissal. If they then rule that the dismissal is null and void (a breach in the employee's fundamental right), the employee can ask to be reinstated and compensated for the wage not received during the time of dismissal. If the employee refuses to be reinstated, the employer must compensate the employee with at least six monthly salaries.
If a judge overrules a termination because it lacks a genuine cause, the employee can seek a damages award. The compensation varies according to the employee's seniority and the number of employees in the company; the government provides an online compensation calculator.
If the judge finds that the termination process was not complied with but that there is a cause for termination, they can grant the employee compensation, which cannot exceed one month's salary.
Employers must follow a standard grievance procedure, the goal of which should be to avoid dismissing an employee:
- Invite the employee to a preliminary meeting
- The invitation must be in writing (hand-delivered or registered letter), including the date, time, place and reason for the meeting. It should inform the employee that they can come accompanied (either by a company staff member or by an external employee advisor if the company does not have any staff representative bodies)
- During the meeting, the employer gives the employee a chance to defend themselves, talk through the issue and comment/make observations
- Following the meeting, the employer can either decide to proceed or drop the termination process
- The employer must inform the employee in writing their final decision after two full business days have elapsed within 30 days (for disciplinary procedures). If the employer decides to end the employment, they must send a letter outlining detailed explanations on the reason for dismissal, sent by registered post
- The notice period, if any, starts to run as of the day the dismissal letter is first presented to the employee's home address
Employee termination protection
Certain employees benefit from additional dismissal protection, making it more challenging to terminate employment during the protection period, as follows:
- Employees on maternity leave: a prohibition against dismissing (mutually agreed termination remains a possibility)
- Pregnant employees or those returning from maternity/paternity leave in the past ten weeks: protection from dismissal unless for reasons such as severe misconduct or impossibility to maintain employment
- Employees on professional related sick leave: protection from dismissal unless they have committed serious misconduct or it is impossible to maintain employment
- Employees with a staff representative mandate: termination of contract requires the labour inspector's authorisation
Collective dismissal process and pay
Before any collective economic dismissal, the employer must consult the social and economic committee (CSE) and DIRECCTE on the reasons and conditions of the dismissals. Failure to comply with these obligations will bring about a right to compensation.
Whatever the size of the company, the employer must implement all measures to avoid redundancy. This means offering better adaptation or redeployment to another job.
When a redundancy meets the CSP scheme conditions, employees made redundant who have been employed for at least one year can register for enhanced unemployment services. This way, they will receive 75% of their average salary for one year and redeployment support. Employers bear part of the unemployment services cost by paying the equivalent of the notice period (and applicable social security contributions) to the French state.
Employees who would like to resign either during or after their probation period must inform the employer by letter (hand-delivered or registered post) of their clear and unequivocal desire to resign. Once the employer receives the letter, they must date it on reception and sign it. The notice period in the employment contract or applicable collective agreement must be complied with unless otherwise agreed by the parties. Employees who resign are not entitled to unemployment benefits (unless in specific cases). Resignation letter template
Other End of Employment Terms
The notice period varies according to the length of employment and the applicable collective bargaining agreement. The notice period provided by law/practice is as follows:
- 1-month notice for employment from 6 months to 2 years
- Two months' notice for employment over two years
- Three month's notice for executive-level roles
Employees on permanent contracts who are terminated and have worked for the company for at least eight months are entitled to severance pay. Pay varies according to the length of service and is calculated based on the employee's average salary over the past 3 or 12 months, whichever is higher. The severance is as follows:
- 1/4th of the monthly salary for each year of service for the first ten years of service
- 1/3rd of the monthly salary for each additional year
The collective bargaining agreement can include more favourable severance rights. The employer must calculate severance rights according to the provisions provided by statute and those included in the CBA and apply whichever is the most advantageous for the employee.
For employees on fix-term contracts, the severance pay equals 10% of the salary earned to date.
The first €82,272 of the severance pay is exempt from social security, and the first €246,816 is exempt from income tax contributions.
To receive the unemployment benefit, the person must fulfil the following criteria:
- Be involuntarily deprived of a job
- Be physically fit for work
- Reside in France
- Have at least six months tenure in the past two years
- Register as a jobseeker with the government within 12 months from the end of employment
- Be actively looking for a job
The government provides a calculator to estimate how much unemployment allowance a person is entitled to.
The daily unemployment allowance includes:
- A fixed part equal to €12.05
- A variable part, equal to 40.4% of the daily reference salary (SJR).
The net amount of the allowance cannot be less than €29.38 daily. People can receive this allowance for up to 730 days (24 months) if they haven't found a job yet, depending on how long they were employed. For employees aged 53 or 54, unemployment benefits can extend to 913 days (30 months). Employees aged 55 years and over are entitled to a maximum of 1,095 days of unemployment benefits (36 months).