Fiduciary
DISMISSAL WITH NOTICE: THE TERMINATION OF AN EMPLOYMENT CONTRACT AT THE INITIATIVE OF THE EMPLOYER
An employer who decides to dismiss an employee who has not committed serious misconduct is obliged to give notice. The Labour Code provides for a legal notice period which applies mainly in the context of a permanent contract. In the event of misconduct, the employer should ideally have warned the employee before the dismissal takes place.
The reasons
1. Dismissal for personal reasons
This occurs when the employee impedes the smooth running of the company's activity and makes it impossible to continue the employment relationship for one or other of the following reasons:
- Professional incompetence: insufficient quality or quantity of work provided, frequent absences due to work incapacity;
- Unfair conduct: inappropriate behaviour towards colleagues, superiors and clients and personal problems leading to repeated delays and abusive behaviour (e.g. alcoholism and drug addiction).
It is essential that these are real and serious reasons (e.g. refusal to respect safety rules, chronic delays at work despite several warnings, shopping during working hours).
2. Dismissal for economic reasons
This occurs when the company finds itself in a delicate financial situation or when it wishes to restructure its business by cutting jobs.
An employee who is dismissed for economic reasons has priority for re-employment for one year from the date of their departure. They will be informed of an available position (but there is no guarantee that they will obtain it).
The formalities
The employer must announce the dismissal to the employee within a reasonable period of time following the alleged facts. It must be notified in writing either by sending a letter of dismissal by registered post or by hand delivery (signed in duplicate).
The letter must be written in a language understood by the employee. It must mention the fact that it is dismissal with notice, the notice period, the date on which the notice expires and the possible dispensation from working.
The employee has one month from receipt of the letter of dismissal to ask for the reasons for their dismissal. In turn, the employer has one month from receipt of the employee's letter to explain the reasons for dismissal in detail. If the employer does not communicate the reasons within the time limit, the dismissal is considered unfair.
In an undertaking with more than 15 employees, notification must be made to the economic committee at the latest on the day the employee is notified of dismissal for economic reasons.
A pre-dismissal interview must take place in a company with more than 150 employees.
The notice period
1. The start date
The notice period begins either on the 15th of the current month if the letter of dismissal is notified before the 15th of the month, or on the 1st day of the following month if the letter of dismissal is notified between the 15th and the last day of the current month.
2. Duration of the notice period
This depends on the employee's seniority within the company at the time of notification of the dismissal:
- Seniority of less than 5 years: 2 months' notice;
- Seniority of 5 years to less than 10 years: 4 months' notice;
- 10 years' seniority or more: 6 months' notice.
The employer may dispense with the employee's notice period but must pay the employee's remuneration until the end of the latter. Dispensation may also take place during the notice period.
If the employee is hired during their notice period by another company for less than their former remuneration, they will be paid the difference by their former employer until the end of the notice period.
Time off to look for a new job
During the notice period, the employee may be absent for 6 working days only to look for a new job. They must be registered with the ADEM and provide proof that they have a job interview.
Severance pay
This is due by the employer as soon as an employee has 5 years or more seniority in the company on the date that the notice period ends. This pay is not subject to income tax and social security contributions. It is calculated on the salaries paid in the last 12 months prior to notice and changes according to seniority:
- Seniority between 5 and less than 10 years : 1 month's salary
- Seniority between 10 and less than 15 years: 2 months’ salary
- Seniority between 15 and less than 20 years: 3 months’ salary
- Seniority between 20 and less than 25 years: 6 months’ salary
- Seniority between 25 and less than 30 years: 9 months' salary
- 30 years of age and over: 12 months’ salary
Companies with fewer than 20 employees have the option of replacing severance pay with an extension of the notice period equivalent to the number of months normally due to the employee.