Collective mutual contract termination
Date of update
A contractual termination can be collective. It allows employment contracts to be terminated under a collective company agreement. This mechanism is an alternative to dismisall on economic grounds.
The employment contract must be terminated voluntarily by the employees and with the agreement of the employer. It should not be confused with the individual mutual contract termination.
This independent system for terminating employment contracts applies only to employees with permanent contracts.
Procedure
The collective mutual termination agreement must include several mandatory elements, such as:
- The maximum number of departures planned.
- The duration of the termination process.
- The conditions employees must meet to qualify.
For detailed information on the mandatory content, refer to the official site: Collective Mutual Termination | Service-Public.fr.
The agreement must be submitted to the DREETS via Collective Terminations of Employment Contracts – RUPCO (emploi.gouv.fr). The DREETS has 15 days to approve or reject the agreement. If no decision is made within this period, the agreement is considered approved.
The employer can:
- Reject the application of an employee for a legitimate reason (conditions of the agreement which are not met, number of employees who submit their applications greater than the number envisaged by the collective agreement).
- Approve an employee’s application. The employment contract is then terminated andthe employee signs an individual termination agreement
Both the employer and the employee are entitled to a withdrawal period after the individual termination agreement is signed, as specified in the collective agreement.
For protected employees, the termination of the employment contract requires prior authorization from the labor inspectorate.
End-of-contract compensation
Employees are entitled to the following payments:
- Indemnity for breach of contract, which may not be less than the statutory indemnity. The collective agreement specifies the calculation method.
- Indemnity for leave, if the employee has not taken all the leave acquired at the date of termination of the contract.
The collective mutual termination payment is fully exempt from income tax. It is also exempt from social security contributions up to twice the Annual Social Security Ceiling (PASS), which is €92,736 in 2024.
Impact on right of residence
All nationals of non-EU and non-EEA countries – except forSwitzerland– who wish to live and work in France for more than three months must have a residence permit.
Where a foreign employee is considered to have lost their job through no fault of their own, their situation will depend on the type of residence permit they have.
Holders of a residence permit authorizing the exercise of any professional activity
The residency rights of persons whose residence permit authorizes them to engage in any professional activity will not be affected by the termination of their employment contract. This includes persons with a temporary or multi-year “private and family life” residence permit, a “family member of a European national” resident permit, a permanent residence permit, a “Talent family” status, etc.
Holders of a temporary residence permit marked "Employees"
- If the employees finds a job before their residence permit renewal date, their new employer must apply for a work permit via Étrangers en France | Accueil (interieur.gouv.fr)
- If they are unable to find a job before their residence permit renewal date: In the event of involuntary termination of the employment contract, and on presentation of the France travail declaration established by the employer upon termination, the residence permit will be extended for one year.
Holders of a multi-year “employee” residence permit are allowed to engage in any salaried employment, if they possess a work authorization. If there is a change of employment, the employer must apply for a new work authorization. For more information, please refer to our dedicated work permit fact sheet.
.Holders of a “Talent ” multi-year residence permit
If the employee finds a job before their residence permit renewal date:
- If the new job matches the conditions of the previous residence permit (such as contract type, salary, profile, etc.), no additional steps are required from the employee. However, the employer must request the residence permit authentication at least two days before the employee starts the new job.
- If the conditions for the residence permit are no longer met, it will be necessary to apply for a change of status with the Prefecture to ensure the residence permit aligns with the individual’s new situation.
If they are unable to find a job before their residence permit renewal date, then the holder no longer meets the requirements for the residence permit, it will not be renewed. However, if the resignation is considered legitimate and the individual qualifies for unemployment benefits, the residence permit may be renewed for the duration of the unemployment benefit period.
For the renewal of their residence permit, the following documents should be provided to the Prefecture:
- The employer’s certificate intended for France Travail
- The certificate from the unemployment benefits agency indicating the remaining period of coverage