1. The principle of combining offices: general rules

1.1 – Corporate mandate and employment contract: two distinct statuses

A corporate mandate holder (chairman, chief executive, manager, member of the management board) performs their functions by virtue of a mandate conferred by the shareholders or partners. They are not bound to the company by an employment contract, unless the conditions for combining the two statuses are met. An employee, by contrast, is bound by an employment contract implying a legal relationship of subordination: they receive instructions, are subject to disciplinary authority and receive remuneration in exchange for their work.

These two statuses may coexist, but their combination is strictly regulated by statute and case law, the requirements of which vary depending on the legal form of the company.

1.2 – The condition common to all corporate forms: the subordination relationship

Whatever the corporate form, the combination is only valid if the employment contract corresponds to technical functions distinct from the corporate mandate, performed in a state of genuine subordination to the company. The Court of Cassation is consistent on this point: a director cannot be both employer and employee for the same functions.

2. Rules applicable according to corporate form

2.1 – The société anonyme (SA)

It is in the SA that the rules are most stringent. The combination is subject to cumulative conditions (Art. L. 225-22 of the Commercial Code for directors, Art. L. 225-44 for members of the supervisory board):

• The employment contract must predate the corporate mandate or be concluded in accordance with the conditions set out in the articles of association
• The contract must correspond to actual employment, with genuine technical functions distinct from the mandate
• The number of employee-directors is capped: they may not represent more than one-third of the board of directors
• The employment contract must be approved by the board of directors under the regulated agreements procedure

2.2 – The société à responsabilité limitée (SARL)

The majority manager (gérant majoritaire) of a SARL cannot, in principle, combine their mandate with an employment contract within the same company. A majority manager holds more than 50% of the company’s shares, alone or together with their spouse, civil partner or minor children. In this situation, they cannot be regarded as an employee because they are treated as the employer.

By contrast, a minority or equal manager (gérant minoritaire ou égalitaire) may combine their mandate with an employment contract, subject to:

• Performing technical functions distinct from the mandate
• Being in a state of genuine subordination to the company
• Having the contract approved by the shareholders in accordance with the regulated agreements procedure (Art. L. 223-19 of the Commercial Code)

2.3 – The société par actions simplifiée (SAS)

The SAS offers the greatest flexibility. No statutory provision expressly prohibits the combination for the chairman or other officers of a SAS. The combination is nonetheless subject to the requirement of genuine subordination and the exercise of distinct functions. The articles of association may provide for specific approval rules.

In practice, the chairman of a SAS is often also an employee in respect of their operational functions, but the reality of the subordination relationship remains the decisive criterion in the event of a dispute.

2.4 – Other corporate forms

In general partnerships (sociétés en nom collectif, SNC), partner-managers cannot be employees of the company. In civil companies (sociétés civiles), managing partners are in a similar position. These corporate forms leave little room for combining the two statuses.

3. Conditions for a valid combination

3.1 – Genuine and distinct technical functions

The employment contract must correspond to actual employment, with precise, identifiable and distinct responsibilities from those attached to the corporate mandate. A vague job description or functions that overlap with the mandate are classic grounds for challenging the combination.

Examples of functions that may justify a valid combination:

• Technical or IT director in a company whose mandate is purely administrative
• Head of sales in a holding company whose mandate relates to group governance
• Sector expert (engineer, doctor, architect) in a company whose management mandate is distinct from the professional expertise

3.2 – A genuine subordination relationship

The employee-director must be subject to the authority of a governing body or line manager who genuinely has the power to give instructions and monitor their execution. In a single-shareholder company or one where the director holds a majority of the capital, this condition is virtually impossible to satisfy.

3.3 – Separate remuneration

The remuneration under the employment contract must be distinct from the remuneration of the corporate mandate and correspond to the real value of the employed functions. A single global remuneration that is not broken down, or an employment contract with no separate pay, significantly undermines the validity of the combination.

3.4 – Compliance with approval procedures

In most corporate forms, an employment contract concluded with a director constitutes a regulated agreement subject to an approval procedure by the shareholders or partners. Failure to obtain proper approval does not necessarily result in the contract being voided, but exposes the director to personal liability for any loss caused to the company.

4. Risks of a poorly structured combination

4.1 – Reclassification of the employment contract as a corporate mandate

In the event of a dispute, in particular on dismissal or termination, the labour tribunal may reclassify the employment contract as a corporate mandate if the validity conditions are not met. The consequences are immediate:

• Loss of entitlement to notice and severance pay
• Loss of entitlement to unemployment benefit (France Travail)
• Challenges to pay slips and social security contributions paid
• Possible reassessment by URSSAF of employer contributions

4.2 – Risks in insolvency proceedings

In the event of compulsory liquidation, creditors and the court-appointed insolvency practitioner systematically examine the validity of employment contracts concluded with directors. An employment contract reclassified as a corporate mandate deprives the director of their status as a preferential salary creditor, and therefore of the protection of the wage guarantee scheme (AGS).

4.3 – Tax risks

Remuneration paid under an employment contract is deductible from the company’s taxable income, unlike corporate mandate remuneration in certain regimes. A reclassified employment contract exposes the company to a tax reassessment concerning the deductibility of the sums paid.

4.4 – Corporate law risks

An employment contract concluded without complying with the regulated agreements procedure may be voided at the request of any shareholder or partner. This nullity may have significant consequences for the remuneration received and the director’s rights.

5. Frequently asked questions about combining a corporate mandate and an employment contract

Your employment and corporate lawyer for combining a mandate and an employment contract

Combining a corporate mandate and an employment contract is a legally delicate arrangement, at the intersection of employment law and corporate law. Poorly structured, it exposes the director to losing all their employment rights at the very moment they need them most. Properly structured, it provides genuine protection and significant benefits.

As specialists in employment law, Patchwork Avocats assists directors and executives and companies in securing their status arrangements, drafting agreements and defending their rights in the event of a dispute.

1. Economic dismissal: definition and statutory grounds

1.1 – Statutory definition

An economic dismissal is any dismissal carried out by an employer for one or more reasons unrelated to the employee personally, resulting from the elimination or transformation of a job, or from a change, refused by the employee, to an essential term of the employment contract, arising in particular from economic difficulties, technological change, a reorganisation of the company necessary to safeguard its competitiveness, or the cessation of the company’s activity (Art. L. 1233-3 of the Labour Code).

1.2 – Recognised economic grounds

The El Khomri Act of 8 August 2016, codified in Article L. 1233-3, clarified and defined the economic grounds that may found a dismissal. Four grounds are now recognised:

1.3 – The two triggering acts

The economic ground must materialise through one of the following two acts:

• The elimination or transformation of a job: the employee’s position disappears or is substantially altered
• The refusal of a proposed modification to an essential contractual term: the employer proposes a change (place of work, remuneration, role) which the employee refuses, that refusal then justifying the dismissal

2. Prior obligations before an economic dismissal

2.1 – The redeployment obligation

Before any economic dismissal, the employer is required to explore all possibilities of internal redeployment of the employee, to a position in the same category or, failing that, to a lower-category position with the employee’s agreement (Art. L. 1233-4 of the Labour Code). This search extends to all companies within the group, including those established abroad, where their activities, organisation or location allow staff transfers.

Redeployment offers must be:

• In writing and precise
• Personalised (tailored to the employee’s profile)
• Made before notification of the dismissal

2.2 – Adaptation and training

The employer also has an obligation to ensure the employee’s adaptation to changes in their role, in particular through training. This obligation, distinct from the redeployment duty, may be relied upon in litigation where the dismissal in fact results from a failure to provide adaptation that was the employer’s responsibility.

2.3 – Consultation of employee representatives

Where the proposed dismissal concerns 10 or more employees over 30 days, the employer must consult the Works Council (Comité Social et Économique, CSE) through a procedure comprising at least two meetings (Art. L. 1233-28 of the Labour Code). The CSE must be informed and consulted on the economic reasons, the categories of positions to be eliminated, the timetable and the accompanying social measures.

3. The order of selection for economic dismissal

3.1 – The statutory selection criteria

Where several employees may be dismissed, the employer must determine the order of selection by applying objective criteria (Art. L. 1233-5 of the Labour Code). Statute sets out four criteria which the employer must take into account, without imposing any hierarchy between them:

• Family responsibilities, and in particular the situation of single parents
• Length of service with the company
• The situation of employees with characteristics making their professional reintegration particularly difficult: employees with disabilities, older employees
• Professional qualities, assessed by occupational category

3.2 – Scope of the selection criteria

The selection criteria apply to all employees belonging to the same occupational category across the company, not merely within the establishment affected by the job elimination. An occupational category comprises employees performing functions of the same nature requiring a common professional background.

3.3 – Disclosure of the selection order

A dismissed employee may ask the employer to disclose the criteria used to determine the selection order. The employer has 10 days from notification of the dismissal to respond. Failure to disclose this information is sanctioned by damages.

4. The job protection plan (plan de sauvegarde de l’emploi, PSE)

4.1 – When is a PSE mandatory?

A job protection plan is mandatory where a company with at least 50 employees plans to dismiss 10 or more employees over 30 days (Art. L. 1233-61 of the Labour Code). Below these thresholds, no PSE is required.

4.2 – Content of the PSE

The PSE must include a set of measures designed to avoid or limit dismissals and to facilitate the redeployment of employees whose dismissal cannot be avoided. It comprises in particular:

• Internal redeployment to positions in the same or a lower category
• Creation of new activities by the company
• Training, recognition of prior learning or retraining measures
• Measures to reduce or reorganise working time
• Measures for skills development
• An external redeployment plan to facilitate re-employment of dismissed employees

4.3 – Validation or approval by the DREETS

The PSE is subject to administrative review by the Regional Directorate for the Economy, Employment, Labour and Solidarity (DREETS):

• Validation where the PSE is defined by a majority collective agreement
• Approval (homologation) where the PSE is defined unilaterally by the employer

The absence of validation or approval results in the nullity of the dismissals pronounced, with reinstatement of the employees or a minimum indemnity of 6 months’ salary (Art. L. 1235-10 of the Labour Code).

5. Procedure and compensation for economic dismissal

5.1 – The individual procedure

For any individual economic dismissal or collective dismissal of fewer than 10 employees, the employer must follow this procedure:

• Invitation to a preliminary meeting (except where a PSE is in place with employee representation)
• Offer of the professional security contract (contrat de sécurisation professionnelle, CSP) in companies with fewer than 1,000 employees, or of the redeployment leave (congé de reclassement) in companies with 1,000 or more employees
• Notification of dismissal by registered letter with acknowledgement of receipt, no earlier than 7 working days after the preliminary meeting (15 days for executives)
• Notification to the DREETS within 8 days of sending the dismissal letters

5.2 – The statutory severance payment

An employee dismissed for economic reasons is entitled to the statutory severance payment on the same basis as for a personal dismissal:

• 1/4 month’s salary per year of service for the first 10 years
• 1/3 month’s salary per year beyond 10 years

The applicable collective bargaining agreement may provide for more favourable payments. The PSE may also stipulate negotiated enhanced severance payments.

5.3 – The priority right to re-employment

An employee dismissed for economic reasons has a priority right to re-employment for 1 year from the date of termination (Art. L. 1233-45 of the Labour Code). To benefit from this right, the employee must request it from the employer within that one-year period. An employer who recruits without respecting this priority is liable to damages.

6. Challenging an economic dismissal

6.1 – Time limits for bringing a challenge

The employee has 12 months from notification of the dismissal to challenge the termination before the labour tribunal (Conseil de prud’hommes) (Art. L. 1471-1 of the Labour Code).

Challenges to the validity of the PSE, however, fall within the jurisdiction of the administrative courts and must be brought within 2 months of notification of the DREETS validation or approval decision (Art. L. 1235-7-1 of the Labour Code).

6.2 – Sanctions for dismissal without real and serious cause

If the economic dismissal is found to lack real and serious cause, the court applies the Macron scale (Art. L. 1235-3), with minimum and maximum awards in months of salary based on length of service. Where the dismissal is null and void (absence of a PSE, violation of a fundamental freedom), compensation is awarded outside the scale with a floor of 6 months’ salary.

6.3 – Challenging the selection order

Failure to comply with the selection order does not deprive the dismissal of real and serious cause, but gives rise to separate damages, the amount of which is assessed at the discretion of the trial judges according to the loss suffered.

7. Frequently asked questions about economic dismissal

Your employment lawyer for economic dismissal matters

Economic dismissal is one of the most complex procedures in French employment law. The economic ground must be real and verifiable, the redeployment obligation loyally performed, the selection order rigorously applied, and the collective procedures conducted in the required form. Every breach is liable to be sanctioned.

As specialists in employment law, Patchwork Avocats guides companies through secure economic dismissal procedures and represents employees in challenging their dismissal, in both advisory work and proceedings before the labour tribunal and administrative courts.

1. The part-time employment contract: definition and implementation

1.1 – What is part-time work?

An employee is considered to work part-time when their working hours are below the statutory duration (35 hours) or, where lower, the collectively agreed working time applicable in the company (Art. L. 3123-1 of the Labour Code). Part-time work may be organised on a weekly, monthly or annual basis.

It may arise from:

• An agreement between the employer and the employee at the time of hiring
• A voluntary switch to part-time during the course of the contract
• A request by the employee for family or personal reasons
• A partial medical incapacity leading to an adjustment of the position

1.2 – The written contract: a mandatory requirement

A part-time employment contract must be drawn up in writing (Art. L. 3123-6 of the Labour Code). It must state:

• The agreed weekly or monthly working hours
• How those hours are distributed across the days of the week or weeks of the month
• The circumstances and procedures under which that distribution may be changed
• The limits within which supplementary hours may be worked

2. The minimum working hours for part-time employees

2.1 – The statutory floor of 24 hours

The minimum working time for a part-time employee is set at 24 hours per week (or the monthly or annual equivalent), subject to exceptions (Art. L. 3123-7 of the Labour Code). This rule is designed to combat involuntary part-time work, which is particularly widespread in certain sectors.

2.2 – Exceptions to the 24-hour floor

Exceptions are available in several cases:

• At the employee’s request, to accommodate personal constraints or to hold multiple jobs, subject to a written agreement
• For employees under 26 who are continuing their studies
• Under an extended sector-wide agreement providing for a shorter minimum, with accompanying guarantees (consolidated scheduling, priority access to supplementary hours)
• In cases of medical incapacity where the occupational physician recommends a reduction in working time

3. Supplementary hours for part-time employees

3.1 – Definition and cap

Supplementary hours (heures complémentaires) are hours worked by a part-time employee beyond their contractual hours, without exceeding the statutory 35-hour week. They are capped at one-third of the contractual weekly hours, unless a sector-wide agreement raises this ceiling.

3.2 – Premium rates for supplementary hours

Supplementary hours are subject to a mandatory pay premium (Art. L. 3123-29 of the Labour Code):

3.3 – The right to refuse supplementary hours

A part-time employee may refuse to work supplementary hours if they are not provided for in the contract, or if the employer has not given the required 3 working days’ notice. Such a refusal cannot constitute misconduct or a ground for dismissal.

4. Part-time employee rights: equal treatment and guarantees

4.1 – The principle of equal treatment

Part-time employees enjoy the same rights as full-time employees, calculated on a pro-rata basis where applicable (Art. L. 3123-5 of the Labour Code). This principle covers in particular:

• Remuneration, calculated proportionally to hours worked
• Paid leave, accrued on the same basis
• Seniority, calculated in the same way
• Access to professional training
• Trade union rights and participation in workplace elections
• Social protection and pension entitlements (subject to contribution rules)

4.2 – Priority right to return to full-time

A part-time employee has a priority right to fill a full-time position corresponding to their job or a similar role within the company, when such a position becomes available (Art. L. 3123-3 of the Labour Code). The employer must inform them of available positions.

4.3 – Protection against excessive split shifts

A part-time employee’s working day may include only one break in activity, and that break may not exceed 2 hours, unless a sector-wide agreement provides otherwise. This rule is designed to protect employees against fragmented working patterns.

5. Reclassification of part-time as full-time

5.1 – Grounds for reclassification

Reclassification of a part-time contract as a full-time contract may be ordered by the labour tribunal in several situations:

• Absence of a written contract or failure to specify working hours
• Repeated unilateral changes to hours by the employer without the required notice
• Regular supplementary hours bringing total working time up to 35 hours
• Employee required to remain constantly at the employer’s disposal

5.2 – Consequences of reclassification

Reclassification as full-time gives rise to salary arrears covering the 3 years prior to the labour tribunal claim, corresponding to the difference between pay received and full-time pay. It may also give rise to damages for unfair performance of the contract.

6. Frequently asked questions about part-time work

Your employment lawyer for part-time work matters

Part-time work is a legally sensitive area: poorly drafted contracts, hours changed without proper formalities, supplementary hours inadequately compensated. These failings expose the employer to costly reclassification claims and salary arrears going back 3 years. For the employee, knowing their rights is often the first step to enforcing them.

As specialists in employment law, Patchwork Avocats assists companies in securing their part-time contracts and defends employees in their rights to remuneration and reclassification, in both advisory work and proceedings before the labour tribunal.

1. Overtime: definition and scope

1.1 – What counts as overtime?

Overtime covers all hours of actual work performed beyond 35 hours per week, whether at the employer’s express request or with their tacit agreement (Art. L. 3121-28 of the Labour Code).

The employer’s agreement may be implicit: if the employee regularly works beyond 35 hours and the employer is aware of this without objecting, those hours are deemed to have been performed at the employer’s request.

1.2 – Overtime and actual working time

Only actual working time is taken into account when calculating overtime. Excluded are: rest breaks, ordinary home-to-work commuting time, on-call periods (except where the employee is actually called out), and time spent changing into work clothes where this has not been classified as working time by agreement.

2. Calculating overtime: basis and premium rates

2.1 – The statutory premium rates

In the absence of a more favourable collective agreement, overtime is compensated at the following rates (Art. L. 3121-36 of the Labour Code):

A sector-wide or company-level agreement may provide for different rates, but may not go below 10%.

2.2 – Basis for calculating the premium

The premium is calculated on the employee’s actual remuneration, not on the base salary alone. It therefore includes all pay components that directly reflect the work performed: base salary, seniority increments, attendance bonuses linked to actual presence, etc. Exceptional or performance-related bonuses are generally excluded.

2.3 – Replacing overtime pay with compensatory rest

A collective agreement may provide that overtime gives rise, in whole or in part, to compensatory rest in lieu of payment (repos compensateur de remplacement, RCR) rather than a cash premium. The rest period must incorporate the premium: one overtime hour at 25% generates 1 hour 15 minutes of rest, not 1 hour.

3. The annual overtime quota

3.1 – Definition and volume

The annual quota (contingent annuel) is the maximum number of overtime hours an employee may work per year without prior authorisation from the labour inspectorate (Art. L. 3121-30 of the Labour Code).

The statutory quota is set at 220 hours per employee per year. A sector-wide or company-level agreement may raise or lower this figure.

3.2 – Hours beyond the quota

Hours worked beyond the quota are permissible but give rise to a mandatory compensatory rest entitlement (contrepartie obligatoire en repos, COR), set by statute at:

• 50% of hours worked beyond the quota in companies with up to 20 employees
• 100% in companies with more than 20 employees

This rest entitlement is in addition to the pay premium and cannot be replaced by a cash payment, unless a specific collective agreement provides otherwise.

3.3 – Information and monitoring obligations

The employer is required to inform the employee of their right to mandatory compensatory rest as soon as they have accumulated 7 hours beyond the quota. The works council (CSE) must also be informed and consulted regarding the use of overtime beyond the quota.

4. Unpaid overtime: evidence and litigation

4.1 – The burden of proof before the labour tribunal

Overtime disputes are among the most common before the Conseil de prud’hommes. The Court of Cassation has established a shared evidential regime: the employee must first produce sufficiently precise evidence (timesheets, diaries, emails, witness statements) to enable the employer to respond. It is then for the employer to provide contrary evidence (Art. L. 3171-4 of the Labour Code).

4.2 – Limitation period

A claim for payment of overtime is subject to a 3-year limitation period running from the date on which the employee became aware of the facts giving rise to the right (Art. L. 3245-1 of the Labour Code). In practice, this means an employee may claim up to 3 years of salary arrears when bringing a claim before the labour tribunal.

4.3 – Void or unenforceable day-based package: reverting to the overtime regime

Where an annual day-based package (forfait jours) is declared void or unenforceable against the employee (for example, due to an invalid collective agreement, absence of workload monitoring, etc.), the employee reverts to the ordinary working time rules. They may then claim payment for all hours worked beyond 35 hours per week, at the applicable premium rates, over the previous 3 years.

5. Special cases: executives, part-time employees and supplementary hours

5.1 – Executives and the day-based package

Executives who have genuine autonomy in organising their working time may be placed on an annual day-based package, which excludes them from the overtime regime. However, this exclusion is only valid if the package has been properly put in place and monitored — and it is precisely on this point that most disputes arise.

5.2 – Part-time employees and supplementary hours

Part-time employees do not work overtime in the strict sense: they work supplementary hours (heures complémentaires), i.e. hours beyond their contractual hours but below 35 hours per week. These are governed by a distinct regime:

• Paid at a 10% premium up to one-tenth of the contractual hours
• Paid at a 25% premium beyond that threshold
• Capped at one-third of the contractual weekly hours

6. Frequently asked questions about overtime

Your employment lawyer for overtime disputes

Overtime litigation is technically demanding: qualifying actual working time, navigating the shared burden of proof, calculating arrears over 3 years, and managing the interaction with day-based packages. For employers and employees alike, a precise early assessment of the case frequently makes the difference between an avoidable dispute and costly proceedings.

As specialist in employment law, Patchwork Avocats advises and represents companies, executives and employees in all matters relating to working time and remuneration, both in advisory work and before the labour tribunal.

A question about overtime pay or the compliance of your HR practices? Contact us.

1. Dismissal on personal grounds: definition and legal basis

1.1 – What is a dismissal on personal grounds?

A dismissal on personal grounds is one whose cause is inherent to the employee. It differs from an economic dismissal (licenciement pour motif économique), which rests on reasons external to the individual (economic difficulties, reorganisation, redundancies).

It may be based on:

• Misconduct (minor misconduct, serious misconduct or gross misconduct)
• Professional or performance insufficiency
• Medical incapacity certified by the occupational physician
• Any other real and serious reason relating to the employee personally

1.2 – The fundamental requirement: a real and serious cause

Whatever the stated ground, the dismissal must rest on a real and serious cause (cause réelle et sérieuse), as required by Article L. 1232-1 of the Labour Code.

2. The different personal grounds: misconduct, poor performance, incapacity

2.1 – Misconduct: three levels with different consequences

The distinction between degrees of misconduct is essential, as it determines the employee’s entitlements upon dismissal:

2.2 – Professional insufficiency

Professional or performance insufficiency is not a form of misconduct, as it rests on the employee’s inability to fulfil their duties properly. It may justify dismissal provided it is:

• Real and objectively established (specific, undisputable facts)
• Not attributable to the employer (insufficient resources, lack of training, unrealistic targets)
• Sufficiently characterised to constitute a serious cause

This is a particularly contentious area: the boundary between professional insufficiency and disguised harassment is closely scrutinised by the courts.

2.3 – Medical incapacity

Incapacity certified by the occupational physician, whether work-related or not, may found a dismissal, but only if the employer has first explored all possible redeployment options and these prove impossible or are refused by the employee.

The applicable regime differs depending on the origin of the incapacity (workplace accident or occupational illness versus other causes), with specific obligations and compensation rules in each case.

3. The dismissal procedure: key steps

The procedure is mandatory. Any irregularity, even a minor one, may be sanctioned by the labour tribunal.

3.1 – The invitation to a preliminary meeting

The employer must send the employee a written invitation to a preliminary meeting (entretien préalable), by registered letter or delivered by hand against signed receipt (Art. L. 1232-2 of the Labour Code). The letter must state:

• The purpose of the meeting (possible dismissal)
• The date, time and location
• The employee’s right to be accompanied by a representative

A minimum of 5 working days must elapse between the employee’s receipt of the invitation and the holding of the meeting.

3.2 – The preliminary meeting

The meeting gives the employer an opportunity to set out the envisaged grounds and to hear the employee’s explanation. It is not a mere formality: the employee must genuinely have the opportunity to put forward their defence. The decision to dismiss cannot be taken before the meeting has been held.

3.3 – Notification of dismissal

The dismissal letter may only be sent after a minimum reflection period, being at least 2 working days after the meeting (Art. L. 1232-6). The letter must:

• State the grounds in precise and verifiable terms
• Be sent by registered letter with acknowledgement of receipt
• Specify the start date of the notice period

3.4 – The notice period and end-of-contract documents

Except in cases of serious or gross misconduct, the employee is entitled to a notice period whose duration depends on their length of service and the applicable collective bargaining agreement. At the end of the contract, the employer must provide:

• The employment certificate (certificat de travail)
• The France Travail (formerly Pôle emploi) attestation for unemployment benefit purposes
• The final pay statement (solde de tout compte)
• The signed receipt for the final pay statement

4. Severance pay: calculation and entitlements

4.1 – The statutory severance payment

In the absence of serious or gross misconduct, any employee with at least 8 months’ service is entitled to a statutory severance payment (Art. L. 1234-9 and R. 1234-1 et seq.). The calculation is as follows:

• 1/4 month’s salary per year of service for the first 10 years
• 1/3 month’s salary per year beyond 10 years

The applicable collective bargaining agreement may provide for more favourable payments, in which case those apply instead of the statutory minimum.

4.2 – The “Macron scale”

Where a dismissal is found to lack real and serious cause, the labour tribunal awards damages governed by the compensation scale set out in Article L. 1235-3 of the Labour Code. This scale sets minimum and maximum amounts expressed in months of gross salary, based on the employee’s length of service and the size of the company.

5. Challenging a dismissal: remedies and strategy

5.1 – Bringing a claim before the labour tribunal

The employee has 12 months from notification of the dismissal to bring a claim before the Conseil de prud’hommes (Art. L. 1471-1 of the Labour Code).

The labour tribunal may:

• Find the dismissal without real and serious cause, and award damages under the Macron scale
• Declare the dismissal null and void, with possible reinstatement or a minimum 6-month award outside the scale
• Penalise the employer for a procedural irregularity, with a maximum award of 1 month’s salary

5.2 – Settlement: an alternative to litigation

A settlement agreement (transaction) may be concluded after notification of the dismissal to avoid any dispute. It requires mutual concessions, rigorous drafting and a sound assessment of the litigation risk. If poorly negotiated or drafted, it may be set aside, or may undervalue the employee’s entitlements.

5.3 – Void dismissals: specific cases

Certain dismissals are affected by absolute nullity where they violate a fundamental freedom or a specific protection: discrimination, harassment, maternity or parental leave, exercise of a representative mandate, whistleblowing. In such cases, the ordinary rules of the Macron scale do not apply.

6. Frequently asked questions : Dismissal on personal grounds

Conclusion

Dismissal on personal grounds is a procedure that leaves no room for approximation: the ground must be real and serious, the procedure rigorously followed and the dismissal letter precisely worded. For employers and employees alike, mastering these rules, and anticipating the risks, frequently makes the difference.

Patchwork Avocats assists companies in securing their HR decisions and supports executives, managers and employees in defending their rights, in both advisory and contentious matters before the labour tribunal.

1. Negotiated termination: definition and conditions

1.1 – What is a negotiated termination?

A negotiated termination is an amicable form of termination of an open-ended employment contract (CDI), introduced by the Act of 25 June 2008. It is codified in Articles L. 1237-11 to L. 1237-16 of the Labour Code. It cannot be imposed by either party: it requires the free and informed agreement of both signatories.

It is distinct from:

• Dismissal: a termination at the employer’s initiative on specific grounds
• Resignation: a termination at the employee’s initiative
• A settlement agreement (transaction): which is concluded after termination of the contract and presupposes a pre-existing dispute

1.2 – Who can conclude a negotiated termination?

Negotiated termination is reserved for employees on open-ended contracts (CDI). It cannot be used to terminate a fixed-term contract or an apprenticeship contract. It applies across all sectors, including to protected employees — but in that case, a specific procedure applies (see section 6).

1.3 – The principle of free and informed consent

The validity of a negotiated termination rests entirely on the free and informed consent of both parties. Any defect in consent, whether fraudulent misrepresentation, moral duress or mistake, may result in the agreement being voided. The Court of Cassation monitors this point strictly: an employee who signs a negotiated termination under pressure, in a context of harassment or following an unresolved dispute, may obtain annulment of the agreement and damages.

2. The negotiated termination procedure

2.1 – The preliminary meeting

The procedure must begin with at least one meeting between the employer and the employee, at which they agree on the terms of the termination (Art. L. 1237-12 of the Labour Code). At this meeting, the employee may be accompanied by:

• An employee representative or trade union delegate present in the company
• An employee adviser chosen from a prefectoral list, where the company has no employee representatives

If the employee chooses to be accompanied, they must inform the employer before the meeting. The employer may then also be accompanied, on the same basis.

2.2 – Signing the agreement

At the conclusion of negotiations, the parties sign a termination agreement using the official Cerfa form n° 14598*01 (individual negotiated termination) or Cerfa n° 14599*01 (collective negotiated termination). This agreement sets out in particular:

• The planned termination date
• The amount of the specific negotiated termination payment

2.3 – The withdrawal period

From the day after the agreement is signed, each party has a withdrawal period of 15 calendar days (Art. L. 1237-13 of the Labour Code). Withdrawal must be notified by registered letter with acknowledgement of receipt or by hand-delivered letter against signed receipt. No reason is required.

2.4 – The approval application

Once the withdrawal period has expired, the more diligent party submits the agreement to the DREETS (Regional Directorate for the Economy, Employment, Labour and Solidarity) for approval via the TéléRC online service. The administration has 15 working days to process the application. Silence within that period constitutes tacit approval.

3. The specific negotiated termination payment

3.1 – The statutory minimum amount

The employee is entitled to a specific negotiated termination payment of no less than the statutory severance payment (Art. L. 1237-13 and R. 1234-1 of the Labour Code), that is:

• 1/4 month’s salary per year of service for the first 10 years
• 1/3 month’s salary per year beyond 10 years

The applicable collective bargaining agreement may provide for a more favourable contractual severance payment. In that case, that amount constitutes the floor for the negotiated termination payment.

3.2 – Basis of calculation

The payment is calculated on the basis of the employee’s average gross remuneration over the 12 months preceding notification of the termination, or over the last 3 months if that calculation is more favourable to the employee (taking into account annual bonuses and gratifications). The length of service taken into account is that at the planned termination date.

3.3 – Tax and social security treatment

The negotiated termination payment benefits from a favourable tax and social security regime up to certain thresholds:

• Income tax exemption up to twice the annual social security ceiling (PASS), i.e. €92,736 in 2025, or up to the statutory or contractual severance amount if higher
• Social security contribution exemption up to the same threshold, provided the employee is not entitled to a pension under a statutory retirement scheme
• Subject to the flat-rate social levy (forfait social) of 20% on the portion exempt from social security contributions

4. Approval by the DREETS

4.1 – Administrative review

The DREETS verifies that the agreement complies with the legal conditions of form and substance: the withdrawal period has been respected, the payment is at least equal to the statutory minimum, and the termination date falls after approval. It does not assess the merits of the termination or the economic balance of the negotiation.

4.2 – Refusal of approval

The DREETS may refuse approval where the legal conditions are not met. The most common grounds are:

• Payment below the statutory minimum
• Failure to observe the withdrawal period
• Termination date preceding the day after approval
• Incomplete or irregular form

In the event of refusal, the parties may restart the procedure after correcting the identified irregularities.

4.3 – Collective negotiated termination

Collective negotiated termination (rupture conventionnelle collective, RCC), introduced by the Macron Ordinances of 2017, allows an employer to offer voluntary departures under a collective agreement, without any economic ground. It is subject to validation by the DREETS (rather than approval) and does not give rise to a job protection plan (PSE). It represents an alternative to economic dismissals for companies wishing to reduce headcount on a voluntary basis.

5. Challenging a negotiated termination

5.1 – Time limit for bringing a challenge

Any challenge to the termination agreement must be brought before the labour tribunal within 12 months of the date of approval of the agreement (Art. L. 1237-14 of the Labour Code). This is a fixed deadline that cannot be suspended or interrupted, except in very limited circumstances.

5.2 – Grounds for nullity

A negotiated termination may be annulled by the labour tribunal in the following cases:

• Defect in consent: moral duress, harassment, pressure, fraudulent misrepresentation or mistake having vitiated the employee’s consent
• Fraud: negotiated termination concluded to circumvent the rules governing economic dismissal or statutory protections
• Procedural irregularities: failure to observe the withdrawal period, absence of a preliminary meeting, non-compliant form
• Insufficient payment: amount below the statutory or contractual minimum

5.3 – Consequences of nullity

If the negotiated termination is annulled, it produces the effects of a dismissal without real and serious cause. The employee may obtain damages under the Macron scale, as well as reimbursement of unemployment benefit received since the termination. Where nullity results from harassment or a violation of a fundamental freedom, compensation is awarded outside the scale.

6. Special cases and risk situations

6.1 – Negotiated termination during sick leave

A negotiated termination is possible during sick leave, including leave following a workplace accident or occupational illness. However, the courts are watchful: where the employee is in a state of particular vulnerability (depression, burnout, anxiety), the judges will carefully examine whether consent was free and informed.

6.2 – Negotiated termination and protected employees

For employees holding an employee representative mandate (trade union delegate, CSE member, etc.), negotiated termination is possible but subject to a specific procedure: it must be authorised by the labour inspector, not merely approved by the DREETS (Art. L. 1237-15 of the Labour Code). Authorisation may be refused if the inspector considers that the termination is connected to the exercise of the mandate.

6.3 – Negotiated termination and the probationary period

Negotiated termination is not available during the probationary period. During that period, termination of the contract is governed by specific rules: either party may bring it to an end freely, subject to observing the applicable notice periods.

6.4 – Negotiated termination in a conflictual context

Negotiated termination is not prohibited where there is a dispute between the parties, but it is particularly exposed to challenge. An employee invited to a disciplinary meeting who signs a negotiated termination in the days following will often be regarded as having acted under duress. The courts regularly annul negotiated terminations concluded in such circumstances.

7. Frequently asked questions about negotiated termination

Your employment lawyer for a negotiated termination

Negotiated termination is often presented as a straightforward procedure, and in appearance it is. But behind the signing of a form lie significant financial issues (payment calculation, tax treatment), legal risks (defective consent, reclassification) and strategic choices (negotiated termination or dismissal, negotiating the amount). Prior consultation allows the termination to be approached with full knowledge of the facts.

As specialists in employment law, Patchwork Avocats assists employees and companies in negotiating and securing their negotiated terminations, as well as in challenging irregular agreements.

1. The mobility clause: definition and legal basis

1.1 – What is a mobility clause?

A mobility clause is a provision inserted in the employment contract that authorises the employer to change the employee’s place of work without that change constituting a modification of the contract requiring the employee’s express agreement. It falls within the employer’s management authority, in the same way as changes to working conditions.

Without a mobility clause, the place of work stated in the contract is a contractual element: its unilateral modification by the employer constitutes a modification of the contract, which the employee is entitled to refuse without committing misconduct. With a valid mobility clause, the transfer falls within the employer’s management authority and is binding on the employee, subject to compliance with the conditions of implementation.

1.2 – Mobility clause and change of workplace: the fundamental distinction

Case law draws a careful distinction between:

• A change in working conditions (relocation within the same geographical area): falling within management authority, it is binding on the employee even without a mobility clause
• A modification of the employment contract (change of workplace outside the geographical area): it requires the employee’s express agreement unless a valid mobility clause provides otherwise

The concept of “geographical area” is assessed in concreto by the courts, taking into account in particular the available means of transport and commuting times.

2. Conditions for a valid mobility clause

2.1 – A precisely defined geographical scope

The mobility clause must define its geographical scope of application in a precise and objective manner. A clause that left the scope to be determined solely by the employer’s will would be void. The Court of Cassation requires that the employee be able to know, from the moment they sign their contract, the exact extent of their mobility obligation.

2.2 – Justification by the nature of the duties or the company’s interests

The clause must be justified by the nature of the duties assigned to the employee or by the company’s interests. It cannot be included systematically for all employees regardless of their functions. Roles that naturally involve mobility (travelling sales representatives, maintenance technicians, security staff on contract sites) are more suited to it than sedentary positions.

2.3 – Clear and unequivocal acceptance by the employee

The clause must have been clearly and unequivocally accepted by the employee at the time the contract was concluded. A clause included in the contract and signed by the employee is presumed to have been accepted. However, a clause added unilaterally by amendment without genuine negotiation, in a context of pressure or imbalance, may be challenged.

2.4 – No right of unilateral extension reserved to the employer

The clause cannot reserve to the employer the right to extend its scope unilaterally. Any modification of the clause’s scope constitutes a modification of the contract requiring the employee’s express agreement.

3. Implementation of the mobility clause by the employer

3.1 – The transfer decision: formal requirements

To activate the mobility clause, the employer must notify the employee of the transfer in writing, specifying:

• The new place of work
• The effective date of the transfer
• The reasons justifying the transfer (reorganisation, loss of contract, operational need)

The decision must be taken in the company’s interest and not with the aim of harming the employee or provoking their resignation. An employer who activates a mobility clause for purely vexatious or discriminatory purposes would have that decision annulled.

3.2 – The notice period

Statute does not set a minimum notice period for a transfer based on a mobility clause. However, case law requires a period that is reasonable and proportionate to the distance, the employee’s personal and family circumstances, and the practical constraints of the transfer. A very short notice period (a few days) for a transfer to a location several hundred kilometres away is consistently treated as evidence of disloyal implementation.

3.3 – Support for the transfer

The employer must offer reasonable support for the transfer: reimbursement of removal costs, assistance with rehousing, temporary maintenance of remuneration where transport costs increase, and arrangements for the transition period. A total absence of support, combined with a significant distance, is a factor of disloyalty taken into account by the courts.

4. The requirement of good faith in implementation

4.1 – The principle of contractual good faith

Article 1104 of the Civil Code provides that contracts must be performed in good faith. This principle applies fully to the employment contract and prohibits the employer from exercising contractual prerogatives, including a validly stipulated mobility clause, in a disloyal manner.

The validity of the clause is a necessary but not sufficient condition: even a perfectly drafted clause may give rise to a dismissal without real and serious cause if its implementation is disloyal.

4.2 – Indicators of disloyal implementation identified by the courts

Case law has identified several indicators characterising disloyal implementation of a mobility clause:

• A very short notice period, disproportionate to the distance and the employee’s personal circumstances
• A significant distance between the employee’s home and the new place of work
• A total absence of support: no financial assistance, no rehousing proposal, no transition arrangements
• The employer’s knowledge of the employee’s personal or family situation (children in school, carer responsibilities, medical constraints) without taking it into account
• Refusal of any dialogue in response to the employee’s stated difficulties
• Moving directly to disciplinary proceedings without seeking an alternative solution

4.3 – Checklist before activating a mobility clause

Before any transfer notification, the employer should verify:

• Is the clause drafted with a precisely delimited geographical scope?
• Is the transfer justified by a legitimate and documented ground?
• Is the notice period reasonable in light of the distance and the employee’s circumstances?
• Has the employee’s family situation been taken into account?
• Has concrete support been offered?
• Have the difficulties raised by the employee received a substantive response before any disciplinary proceedings?

5. The employee’s refusal: consequences and rights

5.1 – Refusal where the clause is validly implemented

Where the mobility clause is valid and its implementation is carried out in good faith, the employee’s refusal to carry out the transfer constitutes in principle misconduct that may justify dismissal. The classification of the misconduct (minor, serious or gross) depends on the circumstances and the employee’s conduct.

5.2 – Refusal where implementation is disloyal

Where implementation of the clause is disloyal, the employee’s refusal does not constitute misconduct. The employee may refuse the transfer without that refusal justifying a dismissal. If the employer nonetheless dismisses for gross misconduct, that dismissal will be declared without real and serious cause by the labour tribunal.

5.3 – Specific protections

Certain employees benefit from specific protections against transfers:

• Protected employees (trade union delegates, CSE members): a transfer may only take place with their agreement or following authorisation from the labour inspector
• Pregnant employees: any discriminatory transfer connected to the pregnancy is void
• Employees who have suffered a workplace accident or occupational illness: specific protections apply during the period of suspension of the contract

6. Challenging a transfer based on a mobility clause

6.1 – Challenging the validity of the clause

The employee may first challenge the validity of the clause itself before the labour tribunal: imprecise scope, absence of justification by the nature of the duties, clause imposed without genuine acceptance. If the clause is declared void, the transfer constitutes a modification of the contract that the employee was entitled to refuse.

6.2 – Challenging disloyal implementation

Even where the clause is valid, the employee may challenge the disloyalty of its implementation. They will need to demonstrate that the concrete conditions of the transfer (notice period, distance, absence of support, disregard for their personal circumstances) characterise a breach of the employer’s contractual good faith obligation.

6.3 – Time limit for bringing a challenge

A claim challenging a dismissal following a refusal to transfer is subject to a 12-month limitation period running from notification of the dismissal (Art. L. 1471-1 of the Labour Code). This deadline is short: it is advisable to consult a lawyer promptly following notification of the dismissal.

7. Frequently asked questions about the mobility clause

Your employment lawyer for a mobility clause

A mobility clause is a powerful management tool, but its handling is technically demanding: validity of the drafting, good faith in implementation, consideration of the employee’s personal circumstances, support for the transfer. For the employer, poorly prepared activation can turn a legitimate transfer into a dismissal without real and serious cause. For the employee, knowing their rights allows them to respond to a disloyal transfer rather than simply accept it.

As specialists in employment law based in Paris 1st, Patchwork Avocats assists companies in securing their mobility clauses and transfer procedures, and defends employees facing transfers carried out in disloyal conditions.