NLBC : Common preconceptions about French employment law

Written by Alexandra DABROWIECKI, MGG Voltaire

Common preconceptions about French employment law

Episode 1: it’s impossible to fire employees!

Foreign investors are often reluctant to hire in France because they are convinced that dismissing an employee is impossible.

In fact, terminating an employment contract in France is not as complicated as you might think.

Firstly, you can terminate an employment contract without cause during the trial period. A simple notification letter and compliance with a short notice period are sufficient.

Beyond the trial period, in order to terminate a permanent employment contract (other rules govern fixed-term contracts) you must ensure that the termination:

1. can be justified by a real and serious cause; and
2. complies with a specific procedure.

In addition, since the introduction of the Macron scale of compensation, the financial risk of litigation is limited.

1. A real and serious cause for dismissal can easily be found and justified

As long as you do not discriminate against the employee and the dismissal does not constitute a retaliation measure following a claim for harassment, the dismissal can be based on various grounds which fall into 2 main categories:

1. Grounds related to the employee such as incompetence, poor performance and not being fit for the role, or disciplinary reasons, such as serious or gross misconduct and business disruption; and
2. Economic grounds, such as economic difficulties or safeguarding business competitiveness.

With careful analysis of the specific circumstances by a good employment lawyer, it is always possible to find a real and serious cause for dismissal.

 2. The dismissal procedure is pretty straightforward

Three key steps must be implemented:

1. Invite the employee to a preliminary meeting; there is no obligation to set out in the invitation the issues which have caused the employer to take action;
2. Hold the preliminary interview 5 working days after the receipt of the invitation by the employee; during the interview the employer explains the reasons for dismissal and hears the employee’s explanations; and
3. Notify the dismissal by letter explaining the grounds. Notification must be given 2 working days minimum after the interview (1 month maximum after the interview for disciplinary dismissals). The employee has no right of appeal of the employer’s decision, as in England.

The procedure is easier than in some other countries. For example, the employer does not have to consult the works council as in Germany or obtain a prior authorization from a judge or any other organization, as in Netherlands (the prior consultation of the works council and the prior authorization of the labor inspector are only required when you dismiss a staff representative).

3. The financial risk is limited

Since the introduction of the Macron scale, the amount of damages an employee may be awarded by an employment tribunal is capped by law.

For example, an employee with 4 years of service can expect to obtain damages between:

• 3 to 5 months of gross salary in a company with 11 or more employees; and
• 1 and 5 months of gross salary in a company with fewer than 11 employees.

This scale is not applicable if the dismissal is deemed null and void in cases provided for by law. These cases include discrimination and harassment.

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Rules governing dismissals in France should not been considered as an obstacle to investing and hiring in France. If you get the right advice to avoid pitfalls, there is always a way to dismiss an employee.

MGG Voltaire is a member of the Netherlands Business Council France.