How to terminate work contracts in France?
Thus, three ways to terminate the unfixed term work contracts.
First, there is the lay-off for individual reasons, second there is the mutual termination agreement call “rupture conventionnelle” and then you get the individual lay-off call in French “licenciement économique” because the business has been operating poorly.
Now, the individual lay-off for personal reasons: its stems from the employee misconducting towards employers, employees or bad performances. In other words, the reason is to be grounded and evidenced by supporting documentation.
This is the reason why you may prefer the MTA, the “rupture conventionnelle” in French.
If the company and its employees cannot get along with each other, they can negotiate an agreement to stop the relationship. Once the agreement has been signed, it is forwarded to the “inspection du travail” in other words the labor authorities to secure the process because it needs to be approved by this work authorities: this procedure has been heavily used by all stakeholders to stop relationships since it has been unacted beginning of 2010.
Then comes the lay-off for economical reason: before launching it, employer has to ensure there is no similar vacant job within the company and the economical motive of the lay-off has to be substantiated. There is a process to abide by epecially if there is an accord of branch and other words a sector while bargaining by an agreement and this makes it very time-consuming.
If a lay-off for full individual reasons, there is no severance. In case of bad performance, a severance. In case of a “rupture conventionnelle” or mutual termination agreement, there is a severance as well and in case of economical reasons there is a severance as well too.
And an allowance for damages can be allotted to employees if the reasons for laying-off people are overruled by labor courts.
So severance, how much?
By Labor Code, the rule is ¼ of a month per year of seniority which means if the employee has 1 year of seniority, the compensation amounts for 1/4 months.
If 5 years old seniority, the compensation is lifted up to 1.25 months. And if 10 years old seniority, it is lifted to 2.5 months.
Now if the “accord de branche” or the sector-wide agreement applies, the maximum is 2/5 of a month per year of seniority which means if the employee has 1 year of seniority, the compensation amounts to 40% of a month maximum. If 5 years of seniority, it’s lifted up to 2 months maximum and if the employee has 10 years of seniority, it is lifted up to 4 months maximum.
Now the type of allowance for damages: once again, because the reasons for laying off employees have overruled by Labor Code. If misconduct or bad performance or in case of MTA or economical lay-off then well regardless of the reasons for any of people, the seniority, if the person has 1 year of seniority the average amount to 1.5 months. If 5 years of seniority, it is lifted up to 4.5 months. And if 10 years old seniority, it is lifted up to 6.5 months.
But if there is procedure order defect which is elected by Labor Code, in this case, regardless although economical or jury said the reason for any of people, the compensation amounts to 1 months only.
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