How to Negotiate the Contractual Termination Indemnity?

Conventional termination is the procedure that comes into force in the context of the termination of an employee's open-ended employment contract (CDI). It is a formality which is intended to be amicable, where the employer and employee negotiate together in the most suitable and most favorable way to separate. It therefore has nothing to do with a resignation, or a dismissal.

What is contractual termination?

The contractual rupture is the process where the employer and the employee on a permanent contract must agree together by mutual agreement, around the conditions of the dissolution of the employment contract which binds them. This conventional breach is subject to terms and compensation, and there is a formal legal framework defining the procedures to be followed. The severance agreement must be drawn up, then must be validated by: "the regional management of companies, competition, consumption, work and employment" ie: the DIRECCTE. The contractual termination is above all a negotiation, and as in any negotiation, each party will have to identify what it really wants. For the motivations of the employee, it can be for example:

Obtain the best possible compensation or, obtain a departure from the company as soon as possible or, – ensure that you have the right to receive unemployment benefits, if he is eligible for the conditions of allocation or, – have the lifting of its non-competition clause.

For the employer, what is important can be:

That the employee leaves the company as soon as possible or, that he gives notice of a certain period (1 month, 2 months, etc.), i.e. the time that the company considers the employee needs to avoid a vacancy in his position or, to compensate the departing employee as cheaply as possible, – pay the employee enough to obtain his agreement, and thus avoid a legal dispute.

What is the procedure for a conventional termination procedure?

There is a timeline to follow before initiating a conventional break-up. The steps are as follows:

– First of all, the employer or the employee: must notify the other of his intention to initiate a contractual termination. This is where the pre-signature interviews will begin. Ideally, a single interview could suffice, but in practical reality, there may be several interviews before finding a relevant agreement on the amount of severance pay, the date of departure… Although no particular formalism is required during these interviews, some employees consider it preferable to have a legal professional at their side during these interviews, in order to be sure that their rights are not infringed. Similarly, the employer can also be assisted by a professional during these negotiations. In both cases, this professional acts as a witness who can thus confirm that the conventional termination is signed by mutual agreement and in strict compliance with the laws, – after having agreed on all the summary points concerning the termination, the signature of the conventional termination contract can be affixed. This contract must contain: the date of departure, the allowances that the former employee will receive… and other specific conditions. There is a withdrawal period of 15 days, which comes into force at the time of signing the contract. If a party decides to withdraw during the 15 days, and wishes to break the contract of conventional rupture, it must keep the other party informed via a registered letter, – finally, after the withdrawal period, the document of the rupture agreement, must be sent to the DIRECCTE, and approved by the latter (the body will have 15 days to decide on the admissibility of this document. In the event of silence, the contractual breach is considered admissible and approved).

How to calculate the specific compensation for conventional termination?

There is a certain ceiling on the amounts of compensation which cannot be lower or higher than a certain threshold. Moreover, the sum of the indemnity cannot be less than the legal indemnity for dismissal. The seniority of the employee, just like his gross salary, are the parameters that are taken into consideration in the method of calculating the amount of the indemnity. We begin by calculating the indemnity, from the gross compensation received by the employee, and it is established that the indemnity cannot be less than a quarter (1/4) of the month's salary. Then the seniority is considered from: the date of introduction of the employee, until the effective date of termination of his contract which is the end of his notice. For example: For a reference salary of €2000, the minimum compensation for seniority of: 2 years and 9 months is: [(2000 x 1/4) x 2] + [(2000 x 1/4) x (9/12)] = €1,375.00.

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