You hired your first employee in France with enthusiasm. The commercial court clerk (greffe) had issued your Kbis, the French company identity certificate that proves your SAS or SARL exists, the Single Desk (Guichet unique managed by the INPI, the National Industrial Property Institute) had processed the hiring declaration (DPAE, the pre-hiring declaration sent to URSSAF, the network of agencies that collect employer social contributions), and your Paris, Lyon or Bordeaux accountant set up the monthly social return (DSN, the nominative social declaration that reports payroll and contributions). Six or ten months later the picture has changed: missed deadlines, tense emails, clients complaining, and a salary that leaves your account on the last working day of every month while the work does not follow. You live in London, New York, Tel Aviv, Dubai or Singapore, you cannot attend a meeting in France next week, and you wonder whether you can simply stop the contract, what a dismissal letter must say, how much an agreed exit costs, and what happens if the employee goes to the labour court (conseil de prud’hommes, the elected court that hears employment disputes).

This guide answers those questions for foreign founders and foreign groups doing business in France, entirely under French employment law. France does not allow dismissal at will: every termination of an open-ended contract (CDI, contrat à durée indéterminée) needs a real and serious cause, a strict procedure, a notice period and final documents, and the employee has twelve months to challenge the dismissal before the labour court. Next to dismissal sits a widely used alternative, the agreed termination (rupture conventionnelle), a joint agreement that ends the contract with a negotiated payment and an administrative approval. Both routes can be run from abroad through clear letters, a local counsel and rigorous paperwork, and both have a predictable price if you prepare them properly. If you are still planning the hire itself, read our complete guide to setting up a company in France as a foreign founder first, then come back here with your employment contract, your pay slips and your timeline in hand. Overtime and working-time disputes that often precede a separation are covered in our companion piece on overtime, the 35-hour week and proof before the labour court, and the hidden health-and-safety duties that survive any exit are explained in our guide to hidden duties, medical follow-up and the single risk-assessment document.

I. End the contract of your first French employee lawfully while you live abroad

A. How do you dismiss your first employee without creating an unfair-dismissal case?

Dismissal for personal reasons (licenciement pour motif personnel) is the ordinary route when the work, the conduct or the results are the problem. Poor performance, repeated errors, refusal of reasonable instructions, loss of trust documented by concrete facts: all of these can support a dismissal, but only if the cause is real, serious and proven by the employer. Economic dismissal (licenciement pour motif économique) follows different rules with redeployment duties and is rarely suited to a one-employee company owned from abroad, so this article focuses on the personal dismissal and on the agreed exit below. The first discipline is procedural and it starts before any decision is taken. The Code states: “L’employeur qui envisage de licencier un salarié le convoque, avant toute décision, à un entretien préalable” (article L. 1232-2 of the Labour Code). The invitation letter must state its purpose, it is sent by registered letter or handed over in person against receipt, and the meeting cannot take place less than five working days after presentation of the letter. From abroad, the practical setup is simple: your French counsel or your authorised manager in France signs and sends the invitation, the employee attends the meeting with a staff representative or an outside adviser if they wish, and you join by telephone or video where the employee accepts it, with a written record kept in the file. Skipping this meeting, holding it too early or sending a vague invitation letter are classic grounds for a procedural finding against the employer, even where the underlying reason was genuine.

The second discipline is the dismissal letter itself, and it carries the whole case. The Code provides: “Lorsque l’employeur décide de licencier un salarié, il lui notifie sa décision par lettre recommandée avec avis de réception” (article L. 1232-6 of the Labour Code). The letter must state the grounds relied upon, it cannot be sent less than two working days after the scheduled date of the preliminary meeting, and only the grounds written in that letter count before the court. The Cour de cassation, the supreme court for employment matters, applies this requirement with rigour but also with common sense: “si la lettre de licenciement doit énoncer des motifs précis et matériellement vérifiables, la datation des faits invoqués n’est pas nécessaire et l’employeur est en droit, en cas de contestation, d’invoquer toutes les circonstances de fait qui permettent de justifier ces motifs” (Cass. soc., 6 May 2025, appeal no. 23-19.214). In plain terms for a foreign employer: describe dated or datable facts, tasks, figures, warnings and incidents that can be checked and discussed, avoid general remarks about attitude or trust with no illustration, and keep every exhibit that backs each sentence, because the judge will compare the letter with the file. Government guidance on dismissal procedure confirms the same sequence of invitation, meeting, notification and notice on service-public.fr, dismissal of an employee on an open-ended contract, and our firm drafts these letters in French originals from day one so that no translation dispute arises later.

Once the letter is sent, three financial and administrative consequences start immediately. First, the notice period (préavis): unless the dismissal is for serious misconduct (faute grave) that prevents the employee staying even during notice, the contract continues during notice and the salary remains due, with the length set by the employment contract, the applicable collective agreement (convention collective) or local custom. Many foreign founders discover at this stage that the sector agreement adds one to three months of salary after the letter; checking the agreement named on the first pay slip before signing the letter saves painful corrections later. Second, the severance floor (indemnité légale de licenciement): the Code provides that “Le salarié titulaire d’un contrat de travail à durée indéterminée, licencié alors qu’il compte 8 mois d’ancienneté ininterrompus au service du même employeur, a droit, sauf en cas de faute grave, à une indemnité de licenciement” (article L. 1234-9 of the Labour Code). The regulatory formula then sets the minimum: “L’indemnité de licenciement ne peut être inférieure aux montants suivants : 1° Un quart de mois de salaire par année d’ancienneté pour les années jusqu’à dix ans ;” (article R. 1234-2 of the Labour Code), with one third of a month per year beyond ten years, calculated on the best average of the last three or twelve months including bonuses pro rata. With eleven months of service the legal minimum is therefore modest but it is due, it appears on the final payslip, and forgetting it guarantees a claim.

Third, the exit paperwork must be delivered at once and from abroad this is where files most often fail. The employer issues a work certificate, and the Code states: “A l’expiration du contrat de travail, l’employeur délivre au salarié un certificat dont le contenu est déterminé par voie réglementaire” (article L. 1234-19 of the Labour Code). Alongside it come the final payslip with the balance of any kind (solde de tout compte, the itemised receipt of all sums paid on exit), the certificate for unused paid leave compensation (indemnité compensatrice de congés payés), and above all the employment attestation for benefit rights: “L’employeur délivre au salarié, au moment de l’expiration ou de la rupture du contrat de travail, les attestations et justifications qui lui permettent d’exercer ses droits aux prestations mentionnées à l’article L. 5421-2” (article R. 1234-9 of the Labour Code). That attestation is transmitted without delay to France Travail (the public employment operator, formerly Pôle emploi, that pays unemployment benefits) and handed to the employee, with electronic filing mandatory for employers of eleven or more staff. A foreign director who leaves this task to an unanswered mailbox at the registered office (siège social) exposes the company to daily penalties and to a presumption of bad faith; instruct your accountant to file the DSN exit codes the day the contract ends and to send the documents by tracked delivery plus email.

B. When is the agreed termination the safer deal for a foreign employer?

The agreed termination (rupture conventionnelle) ends an open-ended contract by joint agreement instead of a unilateral dismissal, and for a first hire managed from abroad it is very often the calmer and cheaper path. The Code defines it in one sentence: “L’employeur et le salarié peuvent convenir en commun des conditions de la rupture du contrat de travail qui les lie” (article L. 1237-11 of the Labour Code). Neither side can impose it, the agreement is signed by both parties, and the statute protects the consent of each side through a supervised timetable. In practice the parties hold at least one meeting, often two, to discuss the end date, the payment and the handover; the employee may be assisted exactly as in a dismissal meeting; the agreement must grant at least the legal severance amount described above, with most first-hire settlements adding a negotiated supplement (indemnité supra-légale) of one to three months to secure a clean and fast departure. Each side then has fifteen calendar days to withdraw (délai de rétractation), and only after that period does the file go for approval (homologation) to the regional labour authority (DREETS, the regional directorate for employment, labour and solidarities), which has twenty-one working days to approve or refuse; silence means approval. The contract ends on the agreed date, never before the day after approval. The official English-language procedure is summarised on service-public.fr, agreed termination of an open-ended contract.

From London or New York the agreed route has three concrete advantages. It removes the burden of proving a real and serious cause, because no cause needs to be stated or defended; it shortens the conflict window, because the employee signs the amount and the date instead of receiving them; and it produces an approval stamp from the administration that labour courts respect. The price is consent discipline: the agreement must be genuinely voluntary, the payment cannot sit below the legal floor, and the withdrawal and approval periods cannot be shortened by contract. The Cour de cassation has drawn the line clearly in a case where an employee sought annulment by invoking a difficult context: “en l’absence de vice du consentement, l’existence de faits de harcèlement moral n’affecte pas en elle-même la validité de la convention de rupture intervenue en application de l’article L. 1237-11 du code du travail” (Cass. soc., 23 January 2019, appeal no. 17-21.550). For a foreign employer the lesson is direct: never combine pressure, threats about a coming dismissal or a sudden bonus cut with an agreed-termination proposal, hold the meetings on separate days, let the employee take advice, document each step in writing, and file the online approval request with the exact payment computation attached. A refusal of approval, which happens when the payment is below the floor or the form is incomplete, simply sends the parties back to negotiation or to the dismissal track; it creates no dismissal by itself.

II. Price the exit correctly and survive a labour court claim filed from France

A. What does the exit really cost: notice, severance, leave and settlement?

Foreign shareholders consistently underestimate the exit ticket because they convert a monthly salary into a handshake. French law counts in layers and each layer must appear in the file. The base layer is salary through the notice period, plus the cash value of accrued but untaken paid leave (France grants a minimum of two and a half working days per month, and the balance is paid on exit), plus any pro rata bonus, overtime recall or expense balance documented in the payroll. The second layer is the severance computed above from article L. 1234-9 and article R. 1234-2, increased by any higher contractual or collective-agreement formula, which many sector agreements provide. The third layer, specific to the agreed termination, is the negotiated supplement: it is taxable and subject to contributions under its own rules, it must be distinguished on the payslip from the legal minimum, and it buys what the dismissal cannot buy, namely a signed agreement on the principle of departure. The fourth layer, often forgotten by companies with no French office, is the handover and restitution record: computer, badge, keys, client files, confidentiality reminder and, where the contract contains one, the non-compete clause (clause de non-concurrence) with its monthly financial counterpart, which is due only if the employer maintains the clause in writing at exit instead of releasing it. Put these four layers into a one-page settlement table attached to the letter or the agreement, have the accountant validate the figures, and the departure discussion changes tone immediately.

Above these contractual layers sits the litigation risk that every foreign employer must price before choosing between dismissal and agreement: the compensation for dismissal without real and serious cause. The Code frames it as follows: “Si le licenciement d’un salarié survient pour une cause qui n’est pas réelle et sérieuse, le juge peut proposer la réintégration du salarié dans l’entreprise, avec maintien de ses avantages acquis” (article L. 1235-3 of the Labour Code). Where either side refuses reinstatement, the judge awards compensation within a binding scale, the Macron scale (barème Macron), running from one month for zero full years of service up to twenty months beyond thirty years, with a reduced floor in companies that habitually employ fewer than eleven staff. For a first hire with under one year of service the ceiling is one to two months, which keeps the exposure of a small foreign-owned company measurable, but costs, reimbursement of unemployment benefits and management time sit on top. The Cour de cassation has closed the main doctrinal debate on this scale: “Il en résulte que les dispositions de l’article L. 1235-3 du code du travail sont compatibles avec les stipulations de l’article 10 de la Convention précitée” (Cass. soc., 11 May 2022, appeal no. 21-14.490), meaning the scale applies as written and judges do not set it aside case by case for ordinary unfair dismissal. The only cases that escape the scale are void dismissals listed by statute, such as violations of a fundamental liberty, moral or sexual harassment findings, discrimination or protected-status breaches, where the floor rises to six months. A separation memo that states the seniority, the headcount, the applicable scale bracket and the void-case check is the document that lets a shareholder in another country decide rationally between a dismissal with a one-month risk and an agreement with a two-month supplement.

B. How do you defend a labour court claim from abroad within the twelve-month deadline?

An employee who considers the dismissal unjustified or the final payment incomplete has one year to act, and that year runs fast. The Code states: “Toute action portant sur la rupture du contrat de travail se prescrit par douze mois à compter de la notification de la rupture” (article L. 1471-1 of the Labour Code). Wage claims follow a two-year period and discrimination or harassment claims have their own regimes, but the dismissal challenge itself expires twelve months after the notification letter, which is why the date of that letter and its proof of delivery matter so much. The claim starts before the labour court of the place of work or of the registered office, with a conciliation hearing first and a full hearing if no settlement emerges. A foreign defendant does not need to relocate: a French attorney files the defence, appears at the hearings, reports by email and video, and the director or shareholder joins by video where the court allows it or provides a written statement and exhibits. What cannot be delegated is the evidence bundle, and its backbone is the same file built at dismissal: the signed contract and any amendments, the collective agreement reference, the invitation and dismissal letters with postal receipts, the meeting notes, the warnings and performance records with dates and figures, the payroll history, the settlement table, the work certificate, the balance receipt and the France Travail attestation with transmission proof. Courts decide on the letter first and on the exhibits second, exactly as the 2025 ruling above requires, so a short precise letter supported by ten exhibits beats a long letter supported by none.

Three practical defences decide most first-hire cases. The first is venue and mail discipline: designate one person in France, counsel or accountant, to receive and scan every letter arriving at the siège social, because conciliation summons, DREETS correspondence and court notices arrive there while the shareholder sleeps in another time zone. The second is consistency between the stated cause and the exhibits: if the letter invokes missed sales targets, the file must show the targets, the monthly results, the reminders and the impact on clients, not general dissatisfaction. The third is the payment record: judges notice immediately whether the notice, the severance floor, the leave balance and the documents were delivered on time, and a complete payment made before the hearing often halves the dispute even where the cause remains contested. Where the employer loses on the cause, the court applies the scale described above, orders delivery of corrected documents under penalty, and orders reimbursement to the unemployment bodies of benefits paid, within a six-month limit, which is why the France Travail transmission proof belongs in every defence bundle. Where the employer wins, the judgment closes the file but the company should still keep the bundle for the wage-limitation period, because a follow-on claim for overtime or leave recall can arrive separately within its own deadline. Settlement remains possible at every stage, from the conciliation hearing to the appeal, and a settlement protocol (procès-verbal de conciliation or transaction) signed with counsel, with mutual waivers and a payment calendar, ends the matter without a published judgment.

Conclusion

Ending the contract of a first French employee from abroad is a procedure, a price and a timetable, not a message. The procedure is the invitation, the meeting and the reasoned letter for a dismissal, or the meetings, the withdrawal period and the administrative approval for an agreed termination. The price is notice plus leave plus the severance floor, with a negotiated supplement where speed and certainty matter and a scaled litigation exposure where the cause is disputed. The timetable is five working days before the meeting, two working days before the letter, fifteen days of withdrawal and twenty-one working days of approval for an agreement, and twelve months for the employee to challenge the rupture before the labour court. Foreign founders who respect that sequence, who state checkable facts in the letter, who pay the documented amount on time and who file the certificate and the France Travail attestation without delay resolve most separations in weeks and defend the rest from their home country through counsel. Keep the contract, the agreement reference, the letters with receipts, the payroll and the transmission proofs in one bilingual file from the hiring day, review the figures with your accountant before any meeting, and treat the registered office mailbox as the door of the company even when you live an ocean away. Do that, and a failed first hire becomes what it should be: a closed chapter with clean books, a lawful exit and a French company ready to hire better next time.