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France: limitation of the indemnity due for unfair dismissal

According to the draft statute that was made public on the 31st August, indemnities due for unfair dismissal shall soon be capped depending on the employee’s length of service:

Length of service (in years completed) Minimal indemnity (in months of gross salary) Maximal indemnity (in months of gross salary)
0 N/A 1
1 1 2
2 3 3
3 3 4
4 3 5
5 3 6
6 3 7
7 3 8
8 3 8
9 3 9
10 3 10
11 3 10,5
12 3 11
13 3 11,5
14 3 12
15 3 13
16 3 13,5
17 3 14
18 3 14,5
19 3 15
20 3 15,5
21 3 16
22 3 16,5
23 3 17
24 3 17,5
25 3 18
26 3 18,5
27 3 19
28 3 19,5
29 3 20
30 and above 3 20

At the moment, these indemnities are not capped and can greatly vary from jurisdiction to jurisdiction and depending on the case at hand.

The new limits are substantially inferior to the indemnities currently given by the Labour Courts. Therefore, they wish to reduce the costs of terminations in France and augment predictability and cost certainty.

Unless the employee claims for additional and expensive requests, such as unpaid overtime, employers will benefit from settling quickly on the maximal amount set by the statute. Such a practice, which can be observed in Spain, will allow both parties to pacify the termination and immediately move on.

These caps will be applied to all terminations notified after the date of publication of the statute (expected by the end of September).

However, they are not applicable for terminations that are deemed void by the judge or that arise after a violation of a fundamental liberty (harassment, discrimination).