A NEGOTIATED TERMINATION IS AN AMICABLE TERMINATION OF AN EMPLOYMENT CONTRACT.
It applies to employees with permanent contracts in the private sector; employees with fixed-term contracts, temporary contracts, and civil servants cannot enter into such agreements.
A negotiated termination cannot be concluded in the event of the employee’s incapacity for work, duly certified by the occupational physician, or when a job protection plan is in place.
It requires the free and informed consent of both parties, meaning the absence of pressure. Most often, it is the employee who claims to have been pressured by their employer to allow them to have the termination agreement annulled.
• The content of the negotiated termination agreement:
• The employer must summon the employee. Both the employee and the employer may be assisted in this process. The employee may be assisted by a member of the company or by a member of the employee representative bodies (staff delegate, etc.). The employer may be assisted by an employee or, if the company has fewer than 50 employees, by a member of their employers’ organization (e.g., UMIH in the restaurant, hotel, and nightclub sector).
• The termination agreement must specify its effective date, which must be at least the day after its approval by the Regional Directorate for Labor, Employment and Vocational Training (Direccte) (or at least the day after the Direccte’s authorization in the case of a protected employee).
• The amount of compensation: it is strongly advised against stipulating compensation lower than the amount of severance pay and notice period compensation. Indeed, the Court of Cassation has ruled that the parties cannot agree to an amount lower than the employee’s minimum legal rights. The penalty for failing to do so is the nullity of the agreement.
• The agreement must be given to the employee; otherwise, the agreement will be null and void.
• The negotiated termination procedure:
• After signing the agreement, both the employer and the employee have the option to withdraw within 15 calendar days of signing. The employer, for example, may withdraw for a legitimate reason for dismissal (e.g., serious misconduct by the employee during the termination process) or for any other reason.
• Once this period has expired, the agreement must be sent to the Regional Directorate for Labor, Employment and Vocational Training (Direccte) either online (via the teleRC service) or using the “Application for Approval of a Negotiated Termination of an Open-Ended Employment Contract (CDI)” form Cerfa no. 14598*01.
The Direccte has 15 days to respond to this request. If no response is received, the agreement is approved. However, the Direccte must provide reasons for its decision in the event of a refusal.
• Risks of a negotiated termination agreement:
• Each party has one year from the date of approval of the agreement (or the date of its non-approval) to challenge it.
Most of the time, it is obviously the employee who requests the annulment of the negotiated termination agreement, as they have the most to gain from doing so.
The employee most often cites pressure exerted by the employer to force them to sign the termination agreement or the derisory amount of the severance pay.
Examples: sick leave due to harassment or pressure experienced at work prior to the termination agreement; a doctor’s certificate attesting that the employee was in a psychological state that prevented them from signing or was depressed; a police report filed by the employee either before or after signing the agreement.
The employee will then file a claim with the Labor Court to request the annulment of the agreement.
If the agreement is granted, the employer must reinstate the employee and pay their wages from the date of the employee’s departure (approval of the termination agreement by the Regional Directorate for Labor, Employment and Vocational Training – Direccte) until the date the Labor Court (Conseil des Prud’hommes) issues its ruling. This can take 12 months, or even 18 to 24 months. However, there has been a de facto termination, meaning the employee has not worked since the agreement was approved. The employee therefore also has the option of claiming damages for unfair dismissal.
Conclusion:
It is therefore strongly advised to choose the dismissal procedure rather than a negotiated termination.
Indeed, dismissal is a unilateral act by the employer, not subject to annulment for lack of valid consent from the employee.
The grounds for annulment of a dismissal are significantly fewer.
Furthermore, a properly drafted settlement agreement prepared by a specialized lawyer will, in principle, mitigate the risk of the dismissal being overturned.