French President Emmanuel Macron has signed five ordinances making important changes to several aspects of the French employment code. The ordinances, which were published in the French Official Journal on September 23rd, 2017, are aimed in particular at providing employers more flexibility and predictability in managing labour relations.

Several provisions of this ambitious reform (the “Reform”) – numbering 159 pages and providing for 36 measures – are already in force.

Due to the significant amount of amendments to French employment regulations provided by the Reform, we have chosen to focus in our second article on the new regulations regarding changes to dismissal procedures, and to the calculation of dismissal indemnities.

We will detail in later articles the other main changes introduced by the Reform and notably changes affecting more particularly economic dismissals.

1. Changes to the dismissal procedure

These aspects of the Reform aim at facilitating the employer’s obligation to give grounds for a dismissal and are governed by Ordinance n°2017-1387.

The key points of the Reform are as follows:

  • Employers may use pro forma dismissal letters. The content of these letters has not been published yet but a decree should specify their content by January 1, 2018 at the latest.
  • Additional explanations on the termination may be provided or requested after the notification of the dismissal letter. In this respect, a decree is also expected by January 1, 2018 at the latest to clarify the conditions in which additional explanations may be provided or requested. It has however been made clear that the additional explanations shall not be used to provide an additional ground for dismissal, but only to complete the explanations provided in the initial dismissal letter.
  • The lack of adequate motives for a dismissal is now considered to be a procedural irregularity. In the event where the employee does not request additional information from the employer on his/her termination, the lack of motive does not deprive the dismissal from a real and serious ground. If the employer has not provided proper motives for the dismissal, he is exposed to damages for procedural irregularity amounting to a maximum of 1 month of salary.

2. New calculation method for dismissal indemnities

These provisions have been introduced by Decree n°2017-1398 dated September 25, 2017 and by articles 39 and 40 of Ordinance n°2017-1387. They are already applicable.

  • Minimum length of service. The minimum length of service required to benefit from a dismissal indemnity has been lowered from one year to 8 months. This seniority is appreciated on the date the dismissal letter is sent.
  • Amount of the dismissal indemnity. The amount of the dismissal indemnity has been increased as follows:
    • up to 10 years of seniority : 1/4 of the monthly salary per year of accrued seniority;
    • more than 10 years of seniority: 1/3 of the monthly salary per year of accrued seniority above 10 years (unchanged).

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