What is the contractual termination indemnity?

Contractual termination, set up in 2008, is a system allowing an employer and an employee to reach an agreement on the end of an employment contract. More interesting than a resignation at the financial level, this device is widely used in the professional environment. In 2018, 437,000 conventional terminations were recorded and validated. Despite its success, this process of terminating an employment contract remains unknown to many employees. Find in this article everything you need to know to initiate a contractual termination and take advantage of the benefits it can bring.

The agreed break

Contractual termination is a procedure that allows the termination of an employment contract. Unlike resignation and dismissal, it is not initiated unilaterally by the employee or the employer. Indeed, the two parties find common ground on the terms of termination of the contract. The signing of a mutual agreement entitles the employee to severance pay. The latter will also be entitled to an unemployment allowance according to the eligibility criteria. The amount of this indemnity is generally higher than that of a legal severance indemnity, which makes the system more interesting. Since 1er January 2020, contractual termination is accessible to civil servants in accordance with the “Public Service Transformation” law.

Contractual Severance Indemnity What is it Opinion

Who is she talking to ?

This system is only accessible to employees on permanent contracts. Thus, temporary workers and workers on fixed-term contracts will not be able to sign a conventional breach to end their employment contracts. Employees on permanent contracts who work part-time are also affected by this system. It is also one of the best solutions for ending a CDI.

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How to calculate the contractual termination indemnity?

The amount of the contractual termination indemnity is always higher than that of a legal dismissal bonus. There is also a clear calculation basis set by law. This mainly refers to the years of seniority of the employee within the company.

For an employee who has less than 10 years of seniority in the same company, the amount of the bonus is equivalent to ¼ of the monthly reference salary per year of presence.

For an employee who has more than 10 years of seniority, the amount of the bonus represents:

  • ¼ of the monthly salary per year recorded during the first 10 years.
  • 1/3 of the monthly salary per year recorded from the 11and year.

For incomplete years, the amount of the bonus will be calculated according to the number of full months before the employee’s final departure.

Severance pay by agreement What is it Advice

Which party initiates the conventional termination procedure?

The conventional termination can be initiated by the employee, but also by the employer. In both cases, it must be the subject of an agreement between the two parties. The employer is entitled to refuse the request for conventional termination issued by his employee without justifying himself. The employee can also decline the approach without motivation and without exposing himself to sanctions. Thus, the break cannot be used by the employer to dismiss an employee. The latter can also use the services of a labor lawyer in the event of a dispute.

How do I request a contractual termination?

To initiate this system, the employee is required to send a letter requesting conventional termination by registered mail with acknowledgment of receipt to his employer. The letter must include a request for maintenance during which the two parties can negotiate the terms of the end of the contract and the amount of the contractual termination bonus. If an agreement is reached, the employer will initiate a procedure with the Direccte which will validate or not the rupture within an average period of 15 working days.

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The benefits of contractual termination

For the employee, the financial advantages mainly justify the choice of a conventional termination. The approach will also be interesting for the employer who will not need to justify himself, unlike a dismissal which must have a specific reason that is always contestable by the employee. In addition, the contractual termination avoids long and uncertain administrative procedures with the industrial tribunal.

Our article on unemployment benefits after a contractual termination may also interest you.

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