The conventional termination of the employment contract

The conventional termination allows the employer and the employee on a permanent contract to agree by mutual agreement on the conditions of the termination of the employment contract that binds them. It is a guarantee of security for the future for the employer which often makes it possible to avoid the aggravation of a conflictual situation.

 

THE CONVENTIONAL TERMINATION OF THE EMPLOYMENT CONTRACT

15/10/2021   

The conventional termination allows the employer and the employee on a permanent contract to agree by mutual agreement on the conditions of the termination of the employment contract that binds them. It is a guarantee of security for the future for the employer which often makes it possible to avoid the aggravation of a conflictual situation.

There are two forms of conventional termination, the individual termination and the collective termination which we will see below.

 

I - The individual conventional termination

  1. Cases of recourse to this form of termination
  • Amicable termination: when an employer and an employee agree to terminate the employment contract, individual contractual termination is the only possible procedure. Any other method of termination would risk being reclassified as dismissal without real and serious cause with heavy financial consequences for the employer.

In this case, the employer and the employee must terminate the employment relationship by mutual agreement, this form of termination not being able to be imposed by either (c. Labor. Art. L. 1237- 11). It must be based on the free and mutual consent of each, otherwise the contractual termination is null and has the effects of a dismissal without real and serious cause.

However, without imposing the conclusion of a contractual termination on the employee, the employer is entitled to propose, during an interview, to negotiate such a termination. This does not constitute a form of pressure liable to vitiate the employee's consent.

  • Termination in the context of a conflict: the existence of a dispute between the employer and the employee, at the time of the conclusion of a contractual termination, does not affect the validity of the termination agreement, but it cannot be imposed by one of the parts.

It is possible to conclude a contractual termination while a dismissal procedure has been initiated. In this case, an interview prior to dismissal may turn into an interview preparatory to the termination of the agreement.

The employer can sign a contractual break with an employee when he was considering sanctioning his misconduct. If the employee uses his right to withdraw from the contractual termination that he has just signed, the employer can:

    • initiate or resume disciplinary proceedings against him;
    • then pronounce a sanction, including dismissal for serious misconduct.

However, the employer must respect the 2 months limitation period.

Two solutions are possible:

  • the employer calls the employee to a first preliminary interview, then signs a contractual termination, and finally summons him to a second interview prior to termination due to the failure of the contractual termination;
  • or the disciplinary procedure is only triggered after the contractual termination, the employee having exercised his right of withdrawal.
     
  • Conventional termination of contract after dismissal: in the event of the conclusion of a contractual termination when a dismissal has already been notified to the employee, the contractual termination entails joint renunciation of the dismissal.

The conclusion of a contractual termination instead of a dismissal presents both an advantage and a disadvantage for the employer:

  • disputes in the event of contractual termination are rarer than in the event of dismissal;
  • on the other hand, the cost price of the contractual termination indemnity is higher than that of the termination indemnity (application of the social package at the rate of 20% on the exempt portion of social security contributions).

 

  • Rupture in the context of economic difficulties: it is possible to conclude a conventional termination in a difficult economic context. However, the abuses lead to a refusal of approval by the administration. Contractual terminations must not make it possible to circumvent the rules of redundancy for economic reasons or to deprive employees of the guarantees attached to employment protection plans (PSE).

Be careful, in these cases of termination, the administration provides for reinforced controls.

 

  1. Cases where conventional termination cannot be used
  • Individual contractual termination cannot be concluded in the context of:
  • collective agreements for the forward-looking management of jobs and skills (GPEC);
  • job protection plans (PSE);
  • collective agreements leading to collective termination of the agreement.
  • It is excluded for fixed-term contracts (CDD) or apprenticeship contracts.
  • Since a judgment of the Court of Cassation of June 8th 2016, when an employment contract of an employee is transferred between two successive employers, with termination by mutual agreement of the first employment contract and conclusion of a second contract with the new employer, the contractual termination cannot be used.

 

  1. The procedure
  • One or more interviews between the employer and the employee: at least one interview is required. However, it is advisable to provide for several to justify the employee's consent.

No formalities are planned for the employee's summons, but the administration specifies that the interviews should be organized in good faith. Thus, the employer must inform the employee of the date and place of the interview, as well as the possibility for him to be assisted.

During the interview, the employer and the employee freely discuss the principle and terms of the contractual termination as well as the amount of the specific compensation paid to the employee and the date of the termination.

Neither the employee nor the employer can be assisted, during interviews, by a lawyer.

  • Conclusion of the agreement: the agreement must define the conditions of the termination. In particular, it must indicate:
  • the amount of the specific compensation for contractual termination from which the employee benefits;
  • the date of termination of the employment contract, which must be set at the earliest on the day after the approval or authorization of the labor inspector for protected employees.

It is forbidden to insert a clause waiving any recourse.

  • Deadline to retract: from the date of signature of the agreement, the employer and the employee each have a period of 15 calendar days to withdraw.

The employer or employee who decides to withdraw must send a letter to the other party, and to no one else. The law does not set any specific formal condition for sending the withdrawal letter, but indicates that it must be sent by any means attesting to its date of receipt by the other party. A registered letter with acknowledgment of receipt therefore seems to be the recommended form.

  • Approval of the agreement: it must be carried out by the DIRECCTE of the place where the employer is established, that is to say the one to which the establishment where the employee works.

DIRECCTE is responsible for all companies with the exception of the judicial and legal professions.

From receipt of the approval request, the DIRECCTE has 15 working days to make a decision.

The employer or the employee can contest the decision of DIRECCTE, whether there has been acceptance or rejection of the application for approval.

 

  1. Employee compensation

The employee must receive severance pay which cannot be less than the legal severance pay or the conventional severance pay when it is more favorable. However, the payment of an indemnity of an insufficient amount does not in itself entail the nullity of the agreement.

The basis for calculating the contractual termination indemnity is identical to that used for the legal termination indemnity.

In addition, the employee is entitled to receive the balance of paid vacation as well as unemployment benefits.

 

II - Collective conventional termination

  1. The differences between collective termination and collective redundancy

Collective termination is an optional workforce management tool that any company can use. This system aims to encourage voluntary departures, in order to anticipate economic changes, while guaranteeing secure career paths for employees who are candidates for departure.

This is a separate device from economic redundancies and the employment protection plan (PSE). Collective conventional termination does not imply a search for reclassification prior to voluntary departure, does not prevent the company from recruiting freely thereafter and can be practiced even in the absence of economic difficulties.

 

  1. The procedure
  • Negotiation by collective agreement: the implementation is done by negotiating a collective agreement with the union representatives when the company is provided with it. If it does not have union representatives, the agreement can be signed with elected officials mandated or not by a representative union, or by mandated employees.

At the same time, the employer must inform the administration electronically. The information is transmitted to the RUPCO information system, whose website is ruptures-collectives.emploi.gouv.fr.

The agreement must contain a certain number of mandatory clauses, the DIRECCTE will in particular verify the existence of a "commitment to maintain employment" clause when examining the validation request.

  • Validation of the collective agreement by the administration: once concluded, the agreement is sent for validation to the administrative authority. The DIRECCTE responsible for making the validation decision is that of the place where the company or establishment concerned by the conventional termination project is established.

DIRECCTE verifies the conformity of the agreement (exclusion of any redundancies), the presence of the measures provided for by the labor code and the regularity of the CSE information procedure. It also verifies the precise and concrete nature of the support measures and the external reclassification of employees.

The employer transmits to DIRECCTE the request for validation of the collective agreement, electronically via the website ruptures-collectives.emploi.gouv.fr, DIRECCTE has 15 days to validate the collective agreement, silence at the end of the 15 day period constitutes a decision to accept the validation.

  • Employee information: the validation decision or, failing that, the copy of the validation request, accompanied by its acknowledgment of receipt by the administration, and the means and time limits for appeal are brought to the attention of employees by posting on their premises work or by any other means allowing to give a certain date to this information.

Then, the employer regularly and in detail consults the CSE, if it exists, on the implementation of the agreement and transmits its opinions to DIRECCTE.

 

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