Contractual termination is based on a specific legal framework set out in Article L. 1237-11 of the French Labour Code. Understanding this provision means looking at the practical differences between this type of termination, dismissal and resignation, particularly in terms of compensation, unemployment benefits and the deadlines imposed on the parties.
Contractual termination, dismissal and resignation: a comparison of the rules
The three ways of terminating a permanent employment contract follow distinct principles. The table below summarises the key differences for employees and employers.
| Criterion | Contractual termination | Dismissal | Resignation |
|---|---|---|---|
| Initiative | Mutual consent | Employer | Employee |
| Reason required | None | Genuine and serious cause | None |
| Minimum statutory compensation | Equivalent to dismissal compensation | Dismissal compensation | None |
| Unemployment benefits | Yes (subject to qualifying conditions) | Yes (except in certain cases of gross misconduct) | No (except in the case of legitimate resignation) |
| Notice period | None (effective date negotiated) | Yes (duration depends on length of service/collective agreement) | Yes (duration depends on collective agreement) |
| Administrative review | DREETS approval required | None (except for protected employees) | None |
| Withdrawal period | 15 calendar days | None for the employee | None |
The most significant difference is the combination of no requirement to give a reason and access to unemployment benefits. This dual advantage explains the scheme’s popularity: DARES recorded approximately 500,000 approval applications in 2023, a figure that has risen steadily since 2009.
The provision underpinning this framework, Article L. 1237-11 of the French Labour Code, introduced by the Act of 25 June 2008, establishes an independent form of termination, distinct from any disciplinary procedure or voluntary departure.
Employer costs for contractual termination: what changed in 2026
The social levy applied to contractual termination compensation has changed. Since 2026, employer costs have increased, affecting the financial calculations businesses make during negotiations.
This increase does not directly affect the amount received by the employee. However, it can limit their negotiating leverage: an employer facing higher social charges may be less willing to agree to compensation above the statutory minimum.
Differences between employee groups
The latest DARES data reveal contrasting trends:
- In 2024, contractual terminations declined among clerical and manual workers, suggesting a dampening effect linked to costs or sector-specific economic conditions.
- Among managers, use of the scheme continued to increase over the same period.
- Trends also vary by industry, with no uniform pattern.
These differences raise questions about how accessible the scheme really is. A non-managerial employee in a sector under pressure does not have the same negotiating leverage as a manager working for a large company.
Contractual termination signed and threat of disciplinary dismissal: the timing trap
One situation that is rarely anticipated deserves particular attention. An employee signs a termination agreement, the withdrawal period expires and the application is sent to DREETS for approval. During this period, the employer discovers—or alleges—a disciplinary reason for dismissal.
Signing a contractual termination agreement does not prevent dismissal before its effective date. As long as the employment contract remains in force, the employer retains disciplinary authority. In practice, an employee can be dismissed for gross misconduct between the signing of the agreement and the effective termination date.
Practical consequences for the employee
If the dismissal is notified before the contractual termination takes effect, the dismissal ends the employment contract. The employee then loses the benefit of the contractual termination compensation and becomes subject to the rules governing dismissal, including its own compensation and appeal procedures.
To address this risk, three steps are essential:
- Check that the effective date agreed in the termination agreement leaves as little time as possible between the end of the withdrawal period and the actual termination of the contract.
- Keep a written record of all communications with the employer to document that mutual agreement existed before the disciplinary procedure began.
- Consult an employment lawyer as soon as there are signs of disciplinary proceedings, to assess whether the dismissal can be challenged before the labour tribunal as an abuse of procedure.
Defective consent remains grounds for setting aside a contractual termination agreement in court. If the employer initiated the agreement to disguise a dismissal, the employee can seek to have the termination reclassified.
DREETS approval period and right of withdrawal: key deadlines
The contractual termination procedure follows a strict timetable. After the agreement is signed, each party has 15 calendar days to withdraw. This period starts on the day after the signing date.
Once the withdrawal period has expired, the approval application is sent to DREETS. The administration then has 15 working days to review the application. If no response is received within this period, approval is deemed to have been granted.
For a protected employee (such as a union representative or a member of the CSE), the procedure requires authorisation from the labour inspectorate, rather than simple approval. The review period is longer, and a reasoned refusal is possible.
Meeting these deadlines is essential to ensure the termination is legally secure. An incorrectly dated preliminary meeting, a withdrawal made after the deadline or a late submission of the Cerfa form to DREETS can undermine the entire agreement.
The tax and social security exemption rules for contractual termination compensation are the subject of proposed reforms, the details of which depend on the final adoption of the legislation. This legislative uncertainty makes it all the more important to set the agreement’s effective date as close as possible to the end of the approval period, limiting exposure to a change in the rules while the procedure is under way.
