Pursuant to a ruling dated 26 March 2014 (no. 12-21.136), the French Supreme Court further clarified its position on termination by mutual agreement (“rupture conventionnelle”) by specifying, for the first time, although it came as no real surprise, that a settlement can only be entered into if, firstly, it is subsequent to the ratification (or authorisation) of the termination by mutual agreement and, secondly, if its purpose is to settle a dispute in relation, not to the termination of the employment contract but to its performance, based on factors not addressed by the termination agreement.

Accordingly, if there is a risk that the employee may contest the termination of his employment agreement, for instance based on a dispute between the parties or a precarious health condition, then termination by mutual agreement is not advisable since it cannot be secured by a settlement.