Individual mutual termination of contract
Date of update
The employer and employee may decide, by mutual consent, to terminate the contractual relationship and to establish together the terms and conditions for terminating the permanent employment contract. They may then sign an individual mutual termination agreement.
In such cases, the employee receives severance pay and may, under certain conditions, claim back-to-work allowance (Allocation de retour à l’emploi – ARE) from France Travail.
To estimate the amount of the statutory severance pay, a simulator is available on the Ministry of Labor’s website (French only): Simulation de l’indemnité légale – TéléRC (travail.gouv.fr)
However, there are situations where an individual contractual termination is not possible:
- The agreement is reached under fraudulent conditions (defect of consent).
- The proposal is made part of a collective agreement for the forward management of jobs and skills (GPEC) or a job protection plan (PSE).
- The proposal falls within the scope of a collective agreement relating to collective contractual termination. Please visit our dedicated fact sheet.
- The proposal bypasses the guarantees provided for the employee in the context of economic dismissal.
Procedure
The contractual termination procedure may be initiated by either the employee or the employer. Under no circumstances may either party compel the other to terminate a permanent contract in this way; it is a termination by mutual agreement.
Should the employee or the employer wish to terminate the contract, they suggest it to the other party and an informal meeting is arranged to discuss the terms and conditions of the termination.
Key steps
- Meeting(s) between the employee and the employer, both of whom may ask someone to attend with them.
- Drafting of the mutual termination agreement setting out the termination terms and conditions (date and indemnity in particular).
- Online submission of the termination approval request form via the TéléRC portal, with the termination agreement attached where applicable.
Handwritten signature of the three forms by the employer and the employee. - Observance of a withdrawal period of 15 calendar days.
- Submission of the agreement to the departmental unit of Employment, work, solidarity and population protection (DDETSSP).
- Approval time of 15 working days at most.
- Termination of the contract on the date set out in the termination agreement.
For any other queries, please see the Frequently Asked Questions
Step 1: Meeting(s)
One or more meetings take place between the employer and employee, during which they agree to terminate the permanent contract by mutual consent and discuss the terms and conditions of termination.
Both employee and employer are entitled to assistance during the meeting, provided they inform the other party beforehand.
There are two possible outcomes to the meeting(s):
- No agreement is reached and the permanent contract continues under the same terms.
- An agreement is reached; the employee and employer sign a contract termination agreement.
Template for requesting a meeting to discuss a mutual termination of contract
Step 2: Contract termination agreement and approval request form
The contract termination results from an agreement signed by the employer and the employee, the terms of which are set in legislation to ensure that each party is free to accept or reject the termination.
The agreement lays down the terms and conditions of termination as defined by the employer and the employee during the preliminary meeting(s), namely at least the date of termination of the employment contract and the amount of severance pay.
The date of termination of the contract must take into account the time required for the DDETSPP to approve the contract termination (up to 15 calendar days).
Specific termination indemnity
When a contract is terminated by mutual consent, the employee receives a “specific termination indemnity”. The amount of the indemnity may be negotiated with the employer and is eligible for certain social security and income tax exemptions, subject to conditions.
In any case, the amount of the indemnity may not be less than statutory severance pay, which is calculated according to the rules set out in the French Labor Code:
- A quarter of a month’s salary per year of service up to ten years; then
- A third of a month’s salary per year of service over ten years.
If the amount of severance pay provided for in the company’s collective agreement is greater than statutory severance pay, this amount is taken into account when establishing the specific termination indemnity.
Termination indemnity calculator
Severance payments under a mutual termination agreement are exempt from income tax up to the highest of the following amounts:
- The amount of redundancy pay provided for by law or; collective agreement
- 50% of the total severance pay received, up to 6 times the annual social security ceiling (PASS), i.e. €278,208 .in 2024
- 2 times the employee’s gross annual income in the calendar year preceding the contractual termination, up to a limit of 6 times the annual social security ceiling (PASS), i.e. €278,208 in 2024.
These severance payments are also exempt from social security contributions, up to the highest of the following amounts:the specific amount stipulated for the reason for termination, or in the absence of this amount, the amount of the legal or conventional redundancy payment.
- half the total amount of .compensation paid
- double the gross remuneration received during the year preceding the termination of the employment contract.
However, the exemption from social security contributions cannot exceed twice the annual PASS. If the individual severance payment exceeds 10 times the PASS, the entire amount will be subject to social security contributions with no exemptions.
The TéléRC portal is an online service for requesting approval of a mutual contract termination. Users must complete an approval request form, making sure that the information entered is compliant (mandatory fields completed, statutory deadlines observed, termination indemnity at least equal to the statutory minimum, etc.)
The approval form includes the termination agreement. It is nevertheless possible to append a mutual termination agreement to the form, explaining the terms and conditions of the contract termination agreed upon by the employee and the employer.
Three copies can be printed from the “TéléRC” portal:
- One for the employer.
- One for the employee.
- One for the DDETSPP
Each copy must be signed by the employer and the employee. A withdrawal period must be observed before sending the forms to the DDETSPP.Otherwise, approval will be refused.
In the event that the employer and the employee have not been able to use the TéléRC portal, it is possible to send a request for approval via the Cerfa form n°14598, after having informed the DDETSPP in advance.
The form is sent by registered letter with acknowledgment of receipt or by hand against discharge to the DDETSPP. However, this procedure is exceptional and cannot be seen as the ordinary procedure.
Protected employee
In the event of a mutual contract termination between an employer and a “protected employee” (union delegate, employee representative, elected member of the delegation of the Social and Economic Committee, etc.), a specific approval request must be filed with the labor inspectorate.
The TéléRC online service cannot be used to file an approval request for this type of employee. The employer must use a special form to request permission to terminate the contract of a protected employee. This form (CERFA no. 14599*01) is available at modernisation.gouv.fr
Step 3: Withdrawal period
The employer and employee have the option of reconsidering and withdrawing from the mutual termination agreement within 15 calendar days, starting from the date of handwritten signature of the approval request form.
If either the employer or the employee wishes to withdraw, they notify the other party in writing, most of the time by registered letter with acknowledgement of receipt or by hand delivery. In this case, the permanent contract continues under the same terms.
Calculate the withdrawal period on the TéléRC portal
Step 4: Sending the form to the Administration (DDETSPP)
At the end of the 15-calendar-day period, the form must be sent to the employer’s local branch of the Department Unit of Employment, work, solidarity and protection of populations.
The assessment department’s contact details are automatically displayed when the form has been completed. The form may be uploaded via the TéléRC portal, sent by post or delivered by hand.
Step 5: Approval by the administration
The DDETSPPP has 15 working days to complete its assessment, starting from the day after it receives the request. The purpose of the approval process is to verify that due procedure has been followed and that both parties have given their free consent: observance of the withdrawal period, completion and signature of the request form, payment of the statutory termination indemnity.
To determine the start date of the assessment period, the DDETSPP sends an acknowledgement of receipt showing two dates:
- The date of receipt.
- The date on which approval will be deemed to be granted.
Step 6: Termination of the contract
If the approval request is rejected by the DDETSPP
The permanent contract continues under the same terms as before.
If the approval request is accpeted by the DDETSPP
The permanent contract is terminated on the date specified in the approval form, without further notice.
If the approval request goes unanswered by the DDETSPP
It is deemed to be accepted and the permanent contract is terminated on the date specified in the approval form (the day after the expiry of the 15-working-day assessment period at the earliest, without further notice). Since the approval request has been neither rejected nor deemed inadmissible, an approval certificate can then be obtained via the TéléRC portal.
The employer must provide its former employee with all necessary documents (work certificate, full and final settlement receipt, declaration from France Travail, etc.)
Unemployment
Employees whose permanent contract has been terminated by mutual consent may be entitled to unemployment benefits, provided they meet all the necessary criteria.
The specific termination indemnity may under no circumstances be less than what the employee would have received had they been dismissed for personal reasons.
The eligibility criteria for the back-to-work allowance (allocation de retour à l’emploi – ARE) and the rules on compensation are the same as those applicable in the event of dismissal on personal grounds.
Calculate the amount of unemployment benefits you are entitled to on the France Travail website:
Impact on right of residence
All nationals of non-EU and non-EEA countries – with the exception of Switzerland – who wish to live and work in France for more than three months must have a residence permit.
Where a foreign employee is considered to have lost their job through no fault of their own, their situation will depend on the type of residence permit they have.
Holders of a residence permit authorizing the exercise of any professional activity
The residency rights of persons whose residence permit authorizes them to engage in any professional activity will not be affected by the termination of their employment contract. This includes persons with a temporary or multi-year “private and family life” residence permit, a “family member of a European national” resident permit, a permanent residence permit, a “(family) talent passport”, etc.
Holders of a temporary residence permit for employees
- If employees finds a job before their residence permit renewal date, their new employer must apply for a work permit via Étrangers en France | Accueil (interieur.gouv.fr) website.
- If they are unable to find a job before their residence permit renewal date, their application to renew their residence permit will be rejected in the event of voluntary termination of employment.
However, if the resignation is considered legitimate and the interested party is eligible for unemployment benefits, their residence permit will be renewed for one year.
Holders of a multi-year “employee” residence permit are allowed to engage in any salaried employment, as long as they possess a work authorization. If there is a change of employment, the employer must apply for a new work authorization. For more information, please refer to our dedicated work authorization fact sheet.
Holders of a “Talent Passport” multi-year residence permit
If the employee finds a job before their residence permit renewal date:
- If the new job matches the conditions of the previous residence permit (such as contract type, salary, profile, etc.), no additional steps are required from the employee. However, the employer must request the residence permit authentication at least two days before the employee starts the new job.
- If the conditions for the residence permit are no longer met, it will be necessary to apply for a change of status with the Prefecture to ensure the residence permit aligns with the individual’s new situation.
If they are unable to find a job before their residence permit renewal date, then the holder no longer meets the requirements for the residence permit, it will not be renewed. However, if the resignation is considered legitimate and the individual qualifies for unemployment benefits, the residence permit may be renewed for the duration of the unemployment benefit period.
For the renewal of their residence permit, the following documents should be provided to the Prefecture:
- The employer’s certificate intended for France Travail
- The certificate from the unemployment benefits agency indicating the remaining period of coverage