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Terminating an Employee in France: A Guide for Overseas Employers

One of the more sensitive areas of foreign employment is termination, and how to match up your company’s policies with host country laws.   You will need to have a thorough understanding of justifiable causes, notice periods and severance so that you don’t run into any problems when terminating employees.

The rules will apply equally to both local hires and expats, who are treated the same in the eyes of French authorities, and even a simple repatriation or downsizing will trigger termination rules designed to protect employees.

Case Example: Dismissal Under French Law

This was illustrated by a request from a client of ours with staff assigned to France, and they wanted to know how to approach a planned termination of two of their employees on permanent employment contracts. 

Because there is no such thing as ‘at will employment’ in France, we advised them on the procedure they had to follow to avoid having the dismissal challenged by the employee.

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1. Grounds for Dismissal in France

The first step is to establish the grounds for the dismissal, and the reasons must be recognized by French law.  The general standard is ‘genuine substantive grounds’, that are either personal or economic in nature.  Without this, the employee cannot be legally terminated.

Some examples of valid personal termination reasons include incompetence, theft, long absences, and discipline problems.  There is a two month statute of limitation, so the conduct has to have taken place within two months prior to the notice being given.

2. Rules and Procedure for Dismissal in France

Next, we outlined the procedural rules that had to be followed to avoid a claim for damages by the employee (even if the termination is justified.)

  1. The client will need to inform us of the intended termination, so we can coordinate with the local employer of record.
  2. A written notice is given to the employee of a preliminary meeting to discuss the termination.
  3. An interview is arranged with the employee by the client, no less than five days after the notice is sent.
  4. During the interview they are then provided with a certified letter by the client (or it is mailed after) in a proper format, detailing the reasons for termination.
  5. A minimum 3 month notice period is required from the date of the reception of the certified letter.
  6. This whole process could take 15 days (interview and certified letter being signed and accepted by the employee) and then the 3 month notice starts.
  7. The 3 month notice can be worked, or the salary paid out to the employee.
  8. A dismissal allowance is also required to be paid to the employee in addition to the notice period of 3 months.
  9. 6 months of health insurance can be requested by the employee however it is not statutory.

3. How to Calculate Severance Pay in France

Following the completion of the notice period (or payout) then the terminated employee is entitled to severance, if the employee has at least one year of tenure.  There are two different severance calculations for permanent and fixed term contracts.

  • Permanent: 1/5 of monthly salary for every year worked, plus an additional 2/15s after ten years.  For example, after five years, severance will equal one month salary.
  • Fixed Term: 10% of the total contract salary, plus 43-45% of contributions

So, we advised our client that the permanent contract severance amount would apply to their employees in this case.

The Shield GEO Solution

If you are employing staff abroad, you have to wonder how you would be in a position to terminate employees legally in a foreign country.  This is where Shield GEO supports our clients with the most up to date and accurate information on all elements of compliance and employment.

Our in-country experts are available to help facilitate any HR related issues you may be having. In this instance in France, our local partner was able to step in and handle the termination under French rules, avoiding any potential problems with employees.  If this type of international support sounds like the solution that you need, please contact us for more information on how we can offer you a comprehensive employment service.

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