Severance pay for permanent employees
Permanent employees are entitled to severance pay if certain conditions are met. Severance pay is due to permanent employees who have been dismissed on personal grounds, except in the event of gross or serious misconduct.
It will be calculated based on the employee’s gross salary (from eight consecutive months of service, except in the event of gross or serious misconduct), and will amount to:
- At least a quarter of a month’s salary per year of service for the first ten years.
- Then a third of a month’s salary per year from the 11th year. A different method of calculation may be used, which is more advantageous for the employee, according to the provisions set out in the collective agreement or the employment contract, or the practices in force in the company.
The collective agreement applicable to the company may provide for a different method of calculating severance pay. In this case, the company must use the method most favorable to the employee.
Compensation in lieu of notice
Compensation in lieu of notice is paid when the employee has not served the notice period given to them upon dismissal.
It is not due if the employee has asked to waive the notice requirement, if the employer agrees to waive the notice requirement for an employee who has resigned, if the employee has been dismissed for gross or serious misconduct, or if there is no notice period owing to the circumstances of the dismissal.
The amount will depend on the length of notice not served and on the salary that the employee would have received had they worked through the notice period.
Compensation in lieu of paid leave
Compensation in lieu of paid leave is due when, on the date of termination of their contract, an employee has not taken all the paid leave to which they were entitled.
It is due even in the event of dismissal for gross misconduct, retirement, resignation and termination of the employment contract during the trial period.
To calculate the amount due, several factors must be considered:
- Basic salary and salary increases.
- The salary the employee would have received had they not been on maternity leave, paternity leave or sick leave following a workplace accident, for example.
- Holiday pay for the previous year.
- Seniority bonus, monthly attendance bonus and on-call bonus.
- Expatriation bonus.
- Benefits in kind (accommodation, company car, etc.).
However, the end-of-year bonus, the incentive bonus, the profit-sharing bonus, professional expenses and the 13th month’s pay are not considered when calculating the due amount of compensation in lieu of paid leave.