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A guide to employee termination in France: Mitigating risk

June 25, 2024

France has some of the most robust employee protections in place in Europe, including the right to:

  • Form and join trade unions
  • Negotiate collective bargaining agreements
  • Request remote work
  • Disconnect from work after-hours

In addition to entitlements such as unemployment benefits and statutory benefits regarding paid leave, such as vacation time, sick leave, and maternity leave, stringent French labor code laws govern employee rights when it comes to termination.

We’ll examine when it’s legal for companies to terminate an employee under French employment law, the steps the employer must take during the process, and the amount of severance pay the employee is entitled to.

When You Can Terminate Employees in France

Because there is no at-will employment in France, an employee can’t be let go without a concrete reason. Under French labor law, termination should be viewed as a last resort in an employment relationship and only pursued after other steps have failed. A company can also only use three reasons to lay off an employee.

1. Economic Reasons

A company can terminate employees during periods of economic difficulties, a need to preserve a competitive advantage, technological changes, or a full company closure. In certain economic reason cases, employees might be classified as redundant. Employers then have the option of either training the employee for redeployment in another role or pursuing outright termination based on economic grounds. Employers must follow additional requirements in the case of mass redundancies.

2. Voluntary Personal Grounds

Suppose an employee has a well-documented history of severe evidence-based misconduct, like persistent absenteeism, harassment, or violence in the workplace, impacting other employees’ working conditions. In that case, the employer can terminate them under voluntary personal grounds for gross misconduct.

3. Involuntary Personal Grounds

Involuntary personal grounds refers to a poor performance by the employee, such as failing to perform the basic duties of their job or conflict with other employees. Employers must carefully document that efforts were made in good faith to help the employee correct any faults and that they were provided with guidance, tools, and time to improve, such as putting the employee on a performance improvement plan (PIP).

Terminating an Employee in France

In France, the employer must follow specific dismissal procedures before terminating an employee. The termination process can only occur if no other solution can be reached.

Send the Employee a Dismissal Letter

The first step is to send a formal letter to the employee inviting them to attend a preliminary meeting. By law, the letter needs to be sent via registered mail, so the employee is required to sign for it — acknowledging they received the letter. Along with the specifics of the meeting, the letter must inform the employee that they have the right to a third-party employee representative to assist them during the meeting.

Hold a Preliminary Meeting with the Employee

The meeting must occur at least five calendar days after the employee receives the dismissal letter. At the meeting, the employer will explain their reasons for pursuing termination. After that, the employee can advocate on their behalf, stating if they believe this is an unfair dismissal. Should the termination decision proceed, the employee has the right to appeal.

Final Decision

Following the meeting, the employer may either continue with the dismissal or stop the process. If the employer decides to proceed, they must send a registered letter to the employee outlining the reasons for the termination.

The notice period begins the day the employee receives the letter. The amount of notice required depends on the length of service with the company.

  • Six months to two years: One month
  • Two years or more: Two months
  • Executive-level role: Three months

How to Calculate Severance Pay

All employees in France are entitled to financial compensation if they’ve been with a company for at least eight months. The amount of severance pay depends on the length of employment and is based on the employee’s average salary over the past three or 12 months, whichever is higher.

Severance pay is:

  • 1/4 of the monthly salary for each year of employment up to 10 years
  • 1/3 of the monthly salary for each additional year of employment

If a collective bargaining agreement is in place, employers must use both the above calculations and the ones found in the agreement, then calculate severance pay based on whichever amount is most favorable for the employee.

Comply with French Termination Laws with an EOR

There is little room for error in terminating an employment contract in France, as the country’s strict employment laws closely safeguard employee rights. Failure to follow these laws properly can result in costly financial penalties.

One way to stay compliant with labor laws in France is by partnering with an Employer of Record (EOR). Remofirst helps our clients compliantly hire and manage international employees in over 180 countries, including France. To learn more about how Remofirst can help your business, book a demo today.