Termination of contract by mutual agreement: conditions and procedures

Individual mutually agreed termination follows a structured procedure that guarantees transparency and protects the consent of both parties.

It consists of several successive steps:

1. An interview is organized between the employer and the employee to discuss the principle of the termination, the end date and the financial conditions.
2. A termination agreement is then drafted and signed by both parties, formalizing their agreement.
3. A cooling-off period of 15 calendar days must be observed following the signature.
4. The agreement is then submitted to the administration for approval; the authorities have an instruction period of 15 working days.

In the absence of a response from the administration within this period, approval is deemed to have been granted.

Cpllective mutually agreed termination allows for the organization of voluntary departures within a collective framework, defined by a company agreement. It constitutes an autonomous method of termination, distinct from both individual mutually agreed termination and dismissal on economic grounds.

This mechanism is based exclusively on voluntary participation by employees. No departures can be imposed within this framework. The process also takes place in several stages.

1. Conclusion of the collective agreement: a collective company agreement must be concluded to implement a collective mutually agreed termination. This agreement specifically defines employee eligibility conditions, the number of planned departures and the support measures provided.
2. Validation by the administration: the agreement is submitted to the DREETS for validation via the dedicated RUPCO portal. The authorities verify its compliance and have 15 days to issue a decision.
3. Submission of applications: once the agreement is validated, the affected employees may volunteer for departure according to the established conditions.
4. Review of applications: the employer reviews the applications based on the criteria defined in the collective agreement. They may accept or refuse a request, provided they comply with these criteria.
5. Signature of the individual agreement: if the application is accepted, an individual agreement is signed between the employer and the employee. It formalizes the termination of the contract by mutual agreement.
6. Termination of the contract and support: the employment contract ends according to the planned terms. The employee receives the agreed-upon indemnities and may benefit from the support measures defined in the collective agreement.

Mutually agreed termination entitles the employee to a specific indemnity. This amount cannot be lower than the legal severance pay. Find out more with the specific simulator on Digital labor code.

In addition to this indemnity, compensatory paid leave may be added if the employee has not taken all of their accrued leave.

The employee may also benefit from the return-to-work allowance (“allocation d’aide au retour à l’emploi” or ARE), provided they meet the eligibility requirements.

For employees who are nationals of non-European Union countries, mutually agreed termination can have consequences for their residency rights.

Even though it generally entitles the employee to unemployment insurance, its effects on the renewal of a residence document must be examined on a case-by-case basis. These effects depend notably on the type of permit held and the employee’s situation at the time of the termination.