Statutory dismissal pay in France: formula, reference salary and worked examples

An employee on a permanent contract (CDI) who is dismissed after 8 months of uninterrupted service with the same employer is entitled to dismissal pay, except in cases of serious misconduct (faute grave) (article L1234-9). Gross misconduct (faute lourde) is treated the same way.

This amount is a legal minimum: the collective agreement, the employment contract or a company agreement may provide more. The collective-agreement calculation must therefore always be checked separately.

• A quarter of a month’s salary per year of service, for years up to ten.
• A third of a month’s salary per year of service, for years from ten onwards.
• For a part-year, the amount is calculated in proportion to the number of complete months (R1234-1).

The formula most favourable to the employee is used: either the monthly average of the twelve months before the dismissal, or a third of the last three months. Where service is under twelve months, the average over the months of service is used.

In the three-month calculation, any bonus or gratification of an annual or exceptional nature is counted only in proportion, that is three twelfths of its amount.

Reference salary: €3,000. First ten years: 10 × 1/4 = 2.5 months. Next five years: 5 × 1/3 ≈ 1.6667 months. Total: about 4.1667 months, i.e. €12,500.

Reference salary: €2,400. Service: 2.5 years, i.e. 2.5 × 1/4 = 0.625 month. Dismissal pay: 0.625 × €2,400 = €1,500.

• Negotiated termination (rupture conventionnelle): the specific termination payment cannot be lower than statutory dismissal pay (article L1237-13).
• Unfitness resulting from an occupational accident or illness: the special payment is, unless the collective agreement is more favourable, double statutory dismissal pay, together with a payment equal to the notice period, unless the employee abusively refused redeployment (article L1226-14).
• Unfitness not of occupational origin: notice is not worked and gives no compensatory payment, but it counts towards the calculation of dismissal pay (article L1226-4).
• Date of assessment of service: several sources set it at the date the dismissal was notified; check this point on your matter.
• Dismissals notified before 27 September 2017: other rules applied (service condition, rates), so the calculation above does not hold.

Jurisvio’s severance calculator applies these rules and shows each step with its article: reference salary, rate, pro rata, special cases. It accepts the collective-agreement amount you have calculated separately and uses the more favourable one. It does not calculate collective-agreement amounts. The result is indicative: the lawyer checks it before any figure is given to a client.