3 Ways to End an Employment Contract in France: Licenciement, Démission, and Rupture Conventionnelle

Published on: December 06, 2024 |  By: @rprasanth_kumar

In France, there are three main ways to end an employment contract: resignation (démission), mutual termination (rupture conventionnelle), and dismissal (licenciement). Each method has specific rules, procedures, and consequences.

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At the end of the contract, the employee receives the following documents usually on the last working day:

  • A Work Certificate (Certificat de travail).
  • A Final Account Statement (Solde de tout compte). 
  • An Unemployment Certificate (Attestation France Travail).

Trial Period (Période d’essai)

During the trial period in France, a job contract can be terminated voluntarily by the employee or by the employer without any justification. But, the employer must follow a certain notice period (délai de prévenance) while terminating the contract. This notice period depends on the duration of the employee on the job.

Duration of Employee in the Company Notice Period by Employer
Less than 8 days 24 hours
Between 8 days and 1 month 48 hours
Between 1 month and 3 months 2 weeks
After 3 months 1 month

If the notice period  is not respected, the employer must pay the employee a compensation. The amount of the compensation (including leave allowance) is equal to the amount of salary wages and benefits that the employee would have received if the person had worked until the end of the notice period.

Did you know?.

  • The employer’s termination during the trial period may be considered abusive by the conseil de prud’hommes (CPH), if the reason for the termination is not related to the employee’s skills.
  • At the end of the trial period, and in the absence of any termination or an extension of the trial period, the employment contract is considered automatically validated between the employee and the employer.

Dismissal: Employer’s Decision (Licenciement)

Dismissal is initiated by the employer and can occur for personal reasons, economic reasons, or misconduct.

Key Steps in the Process:

  • Preliminary Meeting (entretien préalable).
  • Written notification of the termination by the employer.
  • Notice Period (préavis), unless it’s a case of serious misconduct (faute grave ou lourde).

Employee Rights during a Licenciement:

  • Severance Pay (indemnité de licenciement) unless dismissed for serious or gross misconduct.
  • Contrat de sécurisation professionnelle (CSP) if you are working on a CDI from a company with less than 1,000 employees. It is applicable only for licenciement économique. The CSP allows employees affected by an economic dismissal procedure to benefit from a set of measures designed to promote an accelerated return to employment.
  • An employer who plans to lay off workers for economic reasons in an enterprise with 1,000 or more employees must offer a Congé de reclassement. This leave allows the employee to benefit from the help of a support unit to facilitate the steps of the job search. It allows the implementation of training or validation of acquired experience (VAE) financed by the employer. This leave is paid by the employer.
  • Unemployment Benefits (chômage) from France Travail.
  • The option to challenge the dismissal in labor courts (Prud’hommes), though this can be costly and time-consuming.

Types of Licenciement:

  1. Economic Dismissal (licenciement économique).
  2. Dismissal for personal reasons (licenciement personnel).
  3. Disciplinary Dismissal (licenciement disciplinaire).

1. Economic Dismissal (licenciement économique)
A licenciement économique refers to a termination initiated by an employer for reasons unrelated to the employee personally. It occurs due to changes at the company level, such as job elimination, job transformation, or modifications to a key element of the employment contract that the employee refuses. This type of dismissal is recognized in the following cases:

  • Economic difficulties faced by the company.
  • Technological advancements that require changes in operations.
  • Reorganization of the company to maintain competitiveness.
  • Closure of the company or cessation of its activities.

2. Dismissal for personal reasons (licenciement personnel)
A licenciement personnel is based on factors directly related to the employee. This type of dismissal is recognized in the following cases:

  • Employee Misconduct: When the employee violates workplace rules or behaves improperly.
  • Professional Incompetence: When the employee fails to meet expected performance standards.
  • Illness: If the employee’s prolonged absence due to illness disrupts the company’s operations.
  • Unfitness Declared by the Occupational Doctor: When the company doctor officially deems the employee unfit for their role.
  • Harassment by the Employee: If the employee is found to be the perpetrator of workplace harassment.

3. Disciplinary Dismissal (licenciement disciplinaire)
A licenciement disciplinaire refers to the dismissal for minor misconduct (faute simple), serious misconduct (faute grave), or gross misconduct (faute lourde) following a disciplinary procedure.

3a. Minor Misconduct (Faute Simple):

  • Criteria: Employee’s actions violate obligations to the employer. Insufficient severity to warrant immediate termination.
  • Consequences: This can be considered a legitimate and serious reason for dismissal.
  • Examples: Errors or negligence in job performance.
  • Qualification Factors: Employee’s seniority, role, context, or repeated nature of the misconduct.
  • The same act could be classified as minor or serious misconduct based on the above factors.

3b. Serious Misconduct (Faute Grave)

  • Criteria: Employee violates obligations, and their continued presence in the company is impossible, even during the notice period.
  • Consequences: Immediate termination is possible without notice or severance pay.
  • Evaluation: Assessed based on the specific circumstances of each incident.
  • Examples of Serious Misconduct:
    • Working under the influence of alcohol.
    • Unjustified absences.
    • Disobedience or refusal to perform contractually required tasks.
    • Harassment, violence, or insults directed at the employer or coworkers.
    • Theft from the company.

3c. Gross Misconduct (Faute Lourde)

  • Criteria: Exceptionally severe misconduct that demonstrates an intent to harm the employer. The employee cannot remain in the company, even during the notice period.
  • Consequences: Immediate dismissal with no entitlement to notice or severance pay.
  • Examples of Gross Misconduct:
    • Preventing non-striking employees from entering the workplace.
    • Deliberate destruction of company property.
    • Physical violence or death threats toward the employer.
    • Holding staff members against their will.
    • Diverting clients to competitors.
    • Sharing confidential or sensitive company information.

Resignation: Employee’s Decision (Démission)

Resignation is a voluntary decision by the employee to end their permanent contract (contrat à durée indéterminée – CDI). It is not applicable to temporary contracts such as CDD (Contrat à durée déterminée) and Interim job contracts.

Key Steps in the Process:

  • A resignation letter (lettre de démission) is sent by registered post.
  • A notice period (préavis) is typically served, as per the employment contract or collective agreement (convention collective).

Employee Rights:

  • No severance pay.
  • No immediate access to unemployment benefits (chômage), except for legitimate resignations, such as:
    • Relocating due to a spouse’s job transfer (mutation professionnelle).
    • Harassment, unpaid wages, or a career change (reconversion professionnelle).

Termination by Mutual Agreement (Rupture conventionnelle)

Introduced in 2008, the rupture conventionnelle is now a popular method of ending contracts because it benefits both employers and employees.

Key Steps in the Process:

  • The employer or employee proposes the end of the job contract. But there is no obligation on either party to accept because it must be a mutual agreement and cannot be a forced one.
  • After negotiation, an official agreement (convention homologuée) is signed and approved by labor authorities (DREETS).
  • Both parties have a 15-day withdrawal period via registered post (délai de rétractation).

Advantages for Employee:

  • Negotiated Severance Pay (indemnité spécifique de rupture conventionnelle).
  • Access to unemployment benefits (chômage).
  • Maintains a positive professional reputation.

Advantages for Employer:

  • Avoids any legal disputes when executed properly as per Labor Laws.
  • Ensures a smooth and respectful termination process.

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