Termination and Layoffs

The aspect of French labor law that most concerns employers: how to part ways with employees when necessary.

Termination for Personal Reasons (Licenciement Personnel)

Valid Causes: - Insufficient performance (with documentation) - Serious misconduct (faute grave) - Gross misconduct (faute lourde) - Inability to perform job (medical or skill-based)

Required Process: 1. Preliminary meeting invitation (5 days notice) 2. Meeting with employee (can bring representative) 3. Termination letter (2+ days after meeting) 4. Notice period (1-3 months depending on tenure)

Severance (Indemnité de Licenciement): - Minimum: 1/4 month per year for first 10 years - Often higher in collective agreements - Not due for serious/gross misconduct

Economic Layoffs (Licenciement Économique)

For financial difficulties or reorganization:

Requirements: - Genuine economic reason - Attempt to reclassify employee - Follow seniority/skill criteria - Larger layoffs require works council consultation

Enhanced Obligations: - Redeployment efforts - Training proposals - Priority rehiring rights - Potential government approval for large layoffs

Mutual Termination (Rupture Conventionnelle)

The startup-friendly option when both parties agree:

Advantages: - No fault needed - Predictable process - Employee gets unemployment benefits - Avoids litigation risk

Process: - One or more meetings - Written agreement - 15-day cooling-off period - Government approval (usually automatic)

Cost: Similar to standard termination (severance + notice period compensation)