- Phase
- Labour code
- Native name
- Code du travail
- Type
- Severance pay/redundancy compensation
- Added to database
- 08 May 2015
Article
L.1234-9, R. 1234-1 to R. 1234-5, L.3123-5
Description
Employees with eight months of seniority or more for the same employer on an open-ended contract are legally entitled to severance compensation in case of dismissal on economic grounds or for personal reasons. However, employees are not eligible for severance compensation in case of dismissal for misconduct or negligence.
Even though regulated, the law only establishes a minimum threshold for severance payments. The latter are calculated upon the gross monthly salary of the employee before the termination of the employment contract. Accordingly, they cannot be lower than the following amounts:
- 25% of the gross monthly salary times years of seniority, for employees with up to 10 years of seniority;
- 33.33% of the gross monthly salary times years of seniority, for employees with 11 years of seniority or more.
The gross monthly salary of reference for the calculation above corresponds to the most advantageous formula for the employee between the following:
- The monthly average of the 12 months prior to the termination of the contract or the monthly average of all months prior to the termination, if the length of service is less than 12 months;
- A third of the monthly salary for the three months prior to the termination of the contract.
In the last case, any annual or exceptional bonus paid to the employee needs to be considered only up to an amount calculated in proportion to the period for which the bonus is paid. Moreover, the severance payment is calculated in proportion to the length of time the employee worked full-time and part-time.
Severance compensation is not cumulative with any other indemnity of the same nature.
Citation
Eurofound (2015), France: Severance pay/redundancy compensation, Restructuring legislation database, Dublin,
https://apps.eurofound.europa.eu/legislationdb/severance-payredundancy-compensation/france