termination of employment in France: laws & severance policies

Legal Grounds for Termination of Employment in France

When it comes to terminating employment in France, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

‍Personal Grounds:        

           
• Professional Incompetence: Demonstrated inability to perform job duties satisfactorily.
           
• Misconduct: Behavior that violates company policies or disrupts workplace harmony.
           
• Physical Inaptitude: Medical inability to perform job functions, confirmed by an occupational physician.
           

Economic Grounds:            

           
• Economic Difficulties: Significant financial losses or a decrease in revenue over consecutive quarters.
           
• Technological Changes: Implementation of new technologies rendering certain positions obsolete.
           
• Reorganization: Structural changes aimed at safeguarding the company's competitiveness.
           
• Company Closure: Complete shutdown of business operations.
       

Employment Laws and Severance Policies in France

When it comes to terminating employment in France, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Notice Period in France

In France, the notice period required during termination depends on the employee's length of service and the terms outlined in their employment contract or applicable collective bargaining agreement. Typically, the minimum notice periods are:

   
• Less than 6 months of service: 1 month's notice.
   
• 6 months to less than 2 years of service: 2 months' notice.
   
• 2 years or more of service: 3 months' notice.

Employers are obligated to provide written notice to the employee, specifying the reasons for termination and the effective date. Proper notice must be clear and unambiguous. Exceptions to these notice periods may apply in cases of gross misconduct (faute grave or faute lourde), where the employee can be dismissed without notice.

Severance Pay in France

Employees in France are entitled to severance pay if they have completed at least 8 months of service with their employer. The statutory severance pay is calculated as follows:

   
• For the first 10 years of service: 1/4 of a month's salary per year of service.
   
• For each year beyond 10 years: 1/3 of a month's salary per additional year.

The calculation is based on the employee's average gross monthly salary over the last 12 months (or over the entire period of employment if less than 12 months). It's important to note that collective bargaining agreements or individual employment contracts may provide for higher severance pay amounts.

Probation Period in France

Probationary periods in France (période d'essai) serve to reduce hiring risks and allow employers to evaluate their employees' abilities. During this period, the employment contract can be terminated by either the employee or the employer without cause, incurring no extra costs for the employer except for mandatory notice periods, which can range from 24 hours to 1 month. The duration of these periods varies based on criteria such as the employee's role and seniority:

• Office and blue-collar workers ("employés et ouvriers"): 2 months
• Supervisors and technicians ("agents de maîtrise et techniciens"): 3 months
• Executive employees ("cadres"): 4 months

The probation period can be renewed once, provided that the possibility of renewal is stated in the employment contract and agreed upon by both parties.

Process for Ending Employment in France

   
• Preliminary Meeting: The employer must invite the employee to a preliminary meeting to discuss the potential dismissal.
   
• Conduct the Meeting: The employer explains the reasons for termination, and the employee can defend themselves.
   
• Decision Period: The employer must wait at least 2 working days before making a final decision.
   
• Notification of Termination: If termination is confirmed, a registered letter is sent to the employee.
   
• Notice Period: The employee serves the notice period unless exempted due to gross misconduct.
   
• Final Settlement: The employer provides all due payments.
   
• Provision of Required Documents: The employer must provide the employee with necessary legal documents.

Employee Rights During Termination in France

Unfair Dismissal Protections

French labor law provides strong protections against unfair dismissal. If the court finds the dismissal to be unjustified, the employee may be entitled to reinstatement or compensation.

Grievance Procedures

Employees can report grievances to their employer, and unresolved disputes can be escalated to labor courts.

Final Pay and Benefits

Final payments include salary, unused paid leave, and severance pay where applicable. Employers must also provide required documents, including a work certificate and an unemployment insurance certificate.

What Termination Documentation Is Required by Law?

To formally end the employment, employers must provide the employee with the following documents:

• Position certificate ("certificat de travail")
• A document for the French Public Employment Service ("Pôle emploi") for unemployment benefits
• Employer statement on owed amounts ("solde de tout compte")

How to Stay Compliant as An Employer in France

Expanding your workforce across international borders is an exciting step, but it can be a logistical nightmare to hire and pay employees in different countries. And if you need to terminate employment, it’s critical to adhere to local compliance laws. That’s the advantage of using a trusted Employer of Record like Playroll. They can:‍

• ‍Handle international compliance: Different countries each have their own federal and local laws governing employee rights. An EOR helps ensure that you are compliant with the unique set of laws for any country in which your company operates. 
• ‍Run payroll for your global team: An EOR will act as your payroll provider, paying your employees on your behalf in the local currency. The company will also have in-depth knowledge of local tax codes, regulatory practices, and everything else that goes into managing global payroll.
• ‍Scale your team anywhere: Legally hire and swiftly onboard new hires in 180+ regions without the need for entity set-up by leveraging Playroll's infrastructure, so you can freely explore new markets and focus on growth.