Important and/or distinctive aspects of rights on termination in France

Keeping employees out of the business

Except in cases of serious or gross misconduct, it is not possible to place an employee on garden leave during the termination procedure. Requesting the employee to stop working during the dismissal process may be regarded as vexatious in France, or even as a sign of moral harassment.

However, an employer can demand that an employee does not carry out his / her notice period. In this case, the employer must pay an indemnity in lieu of notice (except in case of gross or wilful misconduct) equal to the remuneration that the employee would have earned if he / she had worked.

Communicating on the termination

Under French law, any communication on an employee’s departure must take place after the termination letter has been sent or the termination by mutual agreement has been signed. Indeed, the decision to separate from the employee must not occur before this date.

In case of dismissal, the decision to dismiss the employee must be communicated to him / her in writing. The dismissal letter has to include the precise reasons for the dismissal and meet certain formal requirements.

Protecting confidential information

It is advisable to add a confidentiality clause in the employment contract in order to protect the company’s know-how and more generally to prohibit the disclosure of any confidential information. Such a clause may very well provide that it will still apply even after the termination / end of the employment contract.

Preventing employees from going to competitors

The employment contract may include a non-competition clause if company interests justify doing so. The clause must meet the following conditions:

  • Be limited in time and place: in practice, a non-competition clause cannot exceed 24 months, and its geographical area must be precisely determined;
  • Take into account the specific factors of the employee’s employment: the non-competition clause should not prevent the employee from finding another job;
  • Include sufficient financial compensation: the payment, during the validity of the clause, of a monthly allowance of a gross amount proportional to any restrictions set out in the non-competition clause (in practice, at least 30% of the gross monthly salary).

The employer can waive the non-competition clause according to the terms of the contract, and in any event before the employee’s last day of work.

Protecting trade connections

It is possible to prohibit the employee from entering into a contract with the company’s clients after the end of the employment contract, even if the clients spontaneously consider contracting with him / her. These clauses are governed by the same conditions as non-competition clauses.

NB: In practice, both clauses are covered by a single compensation, the amount of which must be proportional to any restrictions to the employee’s payment activity.

Protecting the workforce

The employment contract may forbid the employee, after his / her departure from the company, from offering a job to, or from hiring directly or indirectly, any (other) company employee.

Insuring against a breach of contract by the employee

The employer can protect itself against the non-compliance with one or the other of the obligations above by means of a penalty clause providing for the payment of a flat-rate compensation fee in case of non-compliance. The clauses, which can be amended by the judge, can have a dissuasive effect.