Is it possible to terminate a contract of employment in France?

Yes – but strict compliance with the procedural rules is vital. There are four main ways of terminating an employment contract in France, (a) a resignation, (b) a dismissal, (c) a redundancy and (d) a mutual termination agreement. Each type of termination involves different procedural steps.

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Is it possible to terminate for poor performance?

No – poor performance alone would not constitute an admissible ground under French Law for a dismissal. Instead the employer is required to be able to demonstrate objectively that the employee is incapable of, and lacks the skills for, carrying out his work in a satisfactory manner.

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In what circumstances can a redundancy (dismissal solely on economic grounds) take place and what is the applicable procedure?

In France, in order to make an employee redundant, the employer needs to be able to show that his or her position need to be done away with. The removal of the position must flow from demonstrably objective economic reasons. The scope thereof is limited to major economic or financial difficulties, technological change, restructuring of the business necessary for the protection of the competitiveness of the company or the total termination of the activities of the company.

The procedural rules (for one employee, they are different for multiple redundancies) require for example an offer of a retraining programme to be made, the seeking out of re-deployment positions elsewhere in France or in other group companies worldwide, as well as formal notification to the State local employment inspectorate.

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Is there a difference between a mutual termination agreement (in French “rupture conventionnelle”) and a settlement agreement (in French “transaction”)?

Yes – in essence, the purpose of the two agreements is different and they should not be confused. A mutual termination agreement brings about the termination of the contract by written agreement between the parties. Whereas 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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Can we employ somebody under a fixed-term contract?

Yes – but the circumstances in which a fixed-term contract would be permitted are strictly limited by law, for example replacing an employee on maternity leave. Moreover, they are limited in duration and may not be renewed more than a certain number of times. Great circumspection is thus necessary in regard to fixed-term contracts, known in French as Contrats à durée déterminée or CDDs.

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What is a Collective Bargaining Agreement (CBA) known in French a Convention Collective and does it apply to our French company?

CBAs are very often sector-wide agreements with statutory force and will automatically apply to specific sectors of French industry and commerce whether or not the particular company is a signatory thereto.

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What are the working time rules in France and what is the most flexible method which might apply?

The standard working week in France is 35 hours. Any hour worked over and above 35 hours would usually constitute overtime and be paid at an increased rate or extra rest days (RTT) could be given in lieu. The modalities and the most flexible method will generally depend upon the provisions of the applicable collective bargaining agreement.

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What are the social contributions and charges payable in France?

Social security and national insurance contributions in France normally constitute circa 20% of gross salary for the employee and up to 50% for the employer. Thus, and very roughly, the total cost to the employer of employing someone in France is circa 150% of gross salary.

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How are paid holidays and public holidays calculated and taken in France?

In France, and by law, employees build up their annual paid holiday entitlement by way of receiving circa 2.5 days paid vacation per month worked. Thus the minimum statutory annual paid vacation is 30 working days per year viz. five weeks. Moreover, and in addition, employees also receive 11 or so extra paid holidays per year. These correspond to public or bank holidays which are set down in the Code du Travail (codified employment statute). The reference period for the calculation of paid vacation is from 1 June to 31 May the following year.

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How are salary levels determined in France?

Generally speaking, and in practice, most salaries are determined by the status and classification of the employees under the applicable Collective Bargaining Agreement and the system is not very flexible. There is also a statutory national minimum wage, known in French as the SMIC. The salary levels set down in the Collective Bargaining Agreement would usually be higher than the SMIC.

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