Since its creation in 2008, employers and employees in France have broadly used the mutually agreed homologated termination (“rupture conventionnelle homologuée”). Maybe too much according to French courts, which are regularly trying to add limits to the use of such agreements?

The mutually agreed termination enables the parties to agree mutually to terminate an employment contract, by signing an agreement homologated by the French labour administration (“inspection du travail”).

The great interests of this procedure (and reasons for its success) are:

  • For the employer: there is no need to provide reasons for the termination, and
  • For the employees: they do not lose their rights to unemployment benefits after the termination.

 Mutually agreed homologated terminations are however subject to very specific modalities (pre-printed forms should be completed), and to a heavily regulated procedure and timetable.

The French Supreme Court recently issued an important decision on mutually agreed homologated terminations, holding that failure to conclude a mutually agreed homologated termination in two originals and to provide one such original to the employee will result in the agreement being held void even if has been homologated by the labour authorities.

The surprise here comes from the fact that the applicable texts (and the form of mutually agreed homologated terminations) do not specify that the agreement should be established in two originals, and then it seems particularly severe to consider that failure to this “requirement” incurs the voidness of the agreement. But the idea of the French Supreme Court was that it invalidates the employee’s consent to the agreement, resulting in it being held void (and the termination of the employment therefore amounting to unfair dismissal).

In a nutshell: If you use this way of termination in France:

  • First: establish the mutually agreed homologated termination in at least two originals, and
  • Then: when the employee signs the forms, ask him to sign a letter in which he acknowledges having received an original of the form.