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TERMINATION BY MUTUAL AGREEMENT – INSIGHTS ON SOME RECENT CASE LAW

27 janvier 2021

TERMINATION BY MUTUAL AGREEMENT – INSIGHTS ON SOME RECENT CASE LAW

By Alexandra Frelat – Employment law lawyer with MGG Voltaire assisting foreign companies 

Along resignation, dismissal and redundancy, the termination by mutual agreement (“rupture conventionnelle”) makes it possible for the employer and the employee to agree on the terms and conditions under which the employment contract may be terminated.

To mitigate the risk of pressure on the employee, the French Labour Code strictly regulates the signature of a termination by mutual agreement, each step aiming to ensure that the employee freely gives their consent to the termination of their employment (in particular a cool-off period and the Labour administration’s necessary endorsement).

Recent case law has provided additional precisions on the requirements to validly conclude a termination by mutual agreement.

Keep record that the employee received a copy of the signed agreement

In a decision of 23 September 2020 (n°18-25770), the French Supreme Court insisted that the employee’s being actually provided with a copy of the signed termination agreement is a validity requirement.

The burden of proof lays on the employer who has to demonstrate that the employee actually received a copy of the signed agreement. Failing this, the termination agreement is null and void.

Considering the above, our recommendation is to have the employee sign an acknowledgement of receipt of the signed termination agreement.

Clearly evidence the employee’s consent to the termination

In principle, the termination by mutual agreement is validly formalized by the parties’ executing three copies of an official fill-in form.

Such form does however not allow the parties to detail the circumstances and background of the termination by mutual agreement, which might prove useful if the employee afterwards challenges their free consent to the termination.

In a recent decision (6 January 2021, n°19-18549), the French Supreme Court ruled that the employee could not have freely agreed to the termination since he was not aware that, at the time he signed the agreement, the company was contemplating a redundancy program leading to the removal of his position.

An attachment to the official fill-in form might prove useful to evidence the free will of the employee to the signature of the termination agreement.

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