All depends on the form of termination i.e. whether it is a resignation, a dismissal/redundancy, a dismissal for serious or gross misconduct, or a mutual termination agreement.

In general, the applicable collective bargaining agreement would set out for more favorable provisions in regard to severance payment.

Pursuant to the French Employment Code, the minimum compensation for dismissal should be paid to any employee who has accrued eight months’ service within the company and amounts to ¼ of a month’s salary per year of service until 10 years of service and 1/3 of a month’s salary from 10 years of service.

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The purpose of the two agreements is different – a mutual termination agreement is a form of termination of the contract whilst the purpose of a settlement agreement is to settle on an ongoing dispute between the parties following the termination of the employee’s contract of employment.

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In France, in order to make an employee redundant, the employer needs to be able to show that the position or duties carried out by the employee in question need to be removed for objective economic reasons such as major economic/financial difficulties, technological change, restructuring of the business necessary for the protection of the competitiveness of the company or termination of the activities of the company.

The procedure for one employee involves offering the applicable retraining programme (Contrat de sécurisation professionnelle or congé de reclassement), seeking re-deployment positions in France, summoning the employee to an initial meeting, holding the initial meeting and sending the redundancy letter and notification to the local employment authorities.

The procedure for redundancies of more than one employee is slightly more complex and the procedure to be followed would also depend on the headcount of the company.

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There are four main ways of terminating an employment contract in France, (a) a resignation (in French “demission”), (b) a dismissal (in French “licenciement pour motif personnel”), (c) a redundancy (in French “licenciement pour motif économique”) and (d) a mutual termination agreement (“rupture conventionnelle du contrat de travail”).

Each type of termination involves different procedural steps.

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Social charges in France normally constitute circa 20% of gross salary for the employee and up to 50% for the employer so that the total cost to the employer of employing somebody is approximately circa 150% of gross salary.

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CBAs are very often sector-wide agreements, and if they have been extended by ministerial order, these will automatically apply to specific sectors of French industry and commerce whether or not the particular company is a signatory thereto or a member of an employer’s federation.

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A foreign employer may of course send its employees on temporary secondment on the French territory provided that there is an employment contract between the foreign employer and the employee and that the employment relationship between the initial company and the employee continues during the secondment period.

The secondment is normally undertaken within the framework of companies of the same group – intra-group mobility; or it can be undertaken within the framework of a contract for the provision of services. In addition, a temporary employment agency based abroad could also send employees on secondment for specific missions.

Pursuant to the provisions of the French Employment Code (in French “code du travail”), during the secondment period, the employee posted to France would be subject to the French statutory provisions applicable to the employees of the French company notably on the following subjects equal treatment, discrimination, protection during maternity leave, working time provisions, rest days, public holidays, minimum salary etc.

In terms of social security provisions, the employee seconded to France remains affiliated to the social security regime of the home country from where he/she originally works.

Furthermore, it is noteworthy that a few compulsory formalities would have be undertaken notably the company will have to make a prior declaration to the local employment authorities (in French “Unité départementale de la DIRECCTE”) where the provision of services will be rendered.

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Expatriation (in French “expatriation”) is used to describe the position of an employee sent abroad for a relatively long period. In this event, the employee would in principle maintain very little or even no working relations at all with the French employer (the initial employer). The initial employment contract would be deemed to be suspended during the mission abroad and a new contract should be agreed with the host company abroad. Upon expiry of the contract abroad, the employee in principle should be re-deployed in a similar position in the initial French company. In terms of social security, the employee would have to subscribe to social security cover in the country of the host company.

Secondment (in French “détachement”) is used to describe the position of an employee who has agreed to be sent abroad on a temporary mission. In such a case, the employee’s initial

contract is not terminated, and the employee maintains its subordinate relationship with the initial company with a view to return to his/her initial position in France. Thus, the employee remains in the headcount of the French company. He/she continues to be paid by the French company and maintains its social security cover in France.

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The written employment contract should be drafted in French Language. When the employee has foreign nationality, the written contract of employment should be translated into the language of the employee upon the latter’s request.

The employment contract does not necessarily have to be in writing except for certain specific contracts such as fixed-term contracts, part-time contracts, temporary contracts (with temporary employment agencies), contracts of employment for casual workers, contracts with home workers etc. That said, it is generally strongly recommended to put in writing the terms of the employment relationship to avoid the difficulties relating to evidence.

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Taking on staff is a critical phase of the employer/employee relationship under French Law.

The employer is required to take a number of important decisions upon employment which would have an impact on the employment relationship of the parties thereafter.

When employing a person in France, the employer has to decide whether the person should be employed under an open-term contract (in French “contrat à durée indéterminée – CDI”) or under a fixed-term contract (in French “contrat à durée déterminée – CDD”) or under a full-time contract or under a part-time contract.

In addition, French Law now provides for the possibility of agreeing open-term contracts for specific projects (in French “CDI de chantier ou d’opération”). Initially, this was limited to the sector of public works and construction sites but now it should be possible to agree such a contract in wider fields such as IT, banks, the automobile sector provided there is an extended agreement in this respect within the framework of the applicable collective bargaining agreement or within specific sectors where it is of customary practice to have recourse to such a contract notably the building and public works industry.

It should be noted that an open-term agreement constitutes the general norm in France. Any person employed in order to perform the permanent normal activities of a company should, subject to few exceptions, be employed under an open-term contract. Indeed, the circumstances in which a fixed-term contract would be permitted are strictly limited by law.

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