The employer and the employee can agree in common on the conditions of the breach of the employment contract (art. L. 1237-11 of French labour code).
This breach is formalized by an agreement signed by the parties.
During one or several interviews, the employer and the employee agree on the principle of a conventional breach.
During such interviews, the employee can be assisted either by an employee of his/her company or if the company does not have any staff representative, by an outside counsel, listed on a list drawn up by the administrative authority or an employee of his/ her company.
3) The breach agreement (“convention de rupture”)
It defines the conditions of the breach, in particular the amount of the specific compensation of conventional breach in the compensation planned in the article L. 1234-9 of the French labour code (i.e: the dismissal indemnity).
It fixes the date of breach of the contract, which cannot intervene before the day after the day of the certification (“Homologation”).
4) Right of retraction
As from the signature of such agreement, each party has a right of retraction within 15 day time limit.
This right must be exercised by a letter (a registered letter with recorded delivery is deeply recommended).
5) Certification of the agreement
At the end of the 15 day delay of revocation, the most diligent party must send a demand of certification to the administrative authority, with a copy of the breach agreement.
The ministry of employment provides a model of certification.
The administrative authority instructs the agreement during 15 days.
In case the administrative authority does not respond to the proposed breach agreement, such agreement as valid.
The validity of the agreement is subordinated to its certification: any dispute concerning the agreement, in such case the Labour Tribunal (“Conseil de prud'hommes”) is competent.
6) Protected staff representatives (union delegate, member of the workers'council, etc.)
The conventional breach of the employment contract of protected staff representatives is subjected to the authorization of the work inspector.
It should be noted that such breach can intervene only the day following such authorization.
7) Compensations paid for conventional breach: exempted from insurance contributions (except “CSG/ CRDS”) and from income tax
Compensations paid for the conventional breach are exempted from national insurance contributions and from income tax for the employee within the limits of the highest amount:
. Twice the annual gross remuneration served to the employee preceding the breach of the employment contract, within the limits of 6 times of the amount of the Social Security ceiling (207,720 euros in 2010); or
. 50 % of the amount of the compensation, within the limits of 6 times the amount of the Social Security Ceiling (207,720 in 2010); or
. The amount of the dismissal indemnity sets forth by the collective agreement or by the law.
Frédéric CHHUM avocat à la Cour
e-mail : email@example.com
tel 01 42 89 24 48