You run a French company from abroad, perhaps a SAS, Société par Actions Simplifiée, the flexible French corporation foreign founders usually choose, with one French employee on a CDI, Contrat à Durée Indéterminée, the standard open-ended French employment contract. Orders have collapsed, the French role no longer makes sense, or the Paris activity is being wound down while you keep the company alive. Your instinct is to end the contract quickly and cleanly from your laptop. French law offers a lawful track for exactly this situation, the individual economic dismissal, but it is a track with rails: a non-personal cause proved with figures, a mandatory search for another position before any goodbye, a preliminary interview, a statutory professional security contract to offer on the spot, and a notification letter that will fix the boundaries of any future trial. Miss one rail and the labour court, the conseil de prud’hommes, the French employment tribunal, can reclassify the separation as a dismissal without real and serious cause, with damages on the Macron scale. This guide explains, for a foreign founder or foreign parent company, how to suppress a French position lawfully, how the CSP, Contrat de Sécurisation Professionnelle, the French statutory professional security contract for small companies, works when you sign from abroad, and what the employee can still challenge within twelve months.

I. The Dismissal You Can Lawfully Run: An Individual Economic Dismissal in a Small French Company

French law distinguishes sharply between dismissing someone for who they are or what they did, which follows the personal-grounds track, and dismissing because the position itself must disappear, which follows the economic track. When your first French hire is not at fault but the role is unaffordable, only the second track is available, and it protects the employee with guarantees that surprise most foreign employers. Understanding the cause and the reclassification duty before you invite anyone to a meeting is what separates a controlled separation from a prud’hommes defeat. Our companion guides cover the neighbouring situations: ending a failed trial period, managing overtime disputes with a first hire, and the very different logic of disciplinary dismissal for misconduct.

A. A Cause That Has Nothing to Do With the Person: Suppressing the Role and Proving Economic Difficulty With Figures

The starting point is laid down by Article L.1233-3 of the Labour Code, which provides: “Constitue un licenciement pour motif économique le licenciement effectué par un employeur pour un ou plusieurs motifs non inhérents à la personne du salarié résultant d’une suppression ou transformation d’emploi ou d’une modification, refusée par le salarié, d’un élément essentiel du contrat de travail”. In plain terms, an economic dismissal must rest on grounds unrelated to the employee as a person, arising from the elimination or transformation of the position or a refused change to an essential term of the contract. Poor performance, repeated absence or disobedience can never support this track; if the real reason is the person, use the personal-grounds procedure instead, because a labour court will look past the label you chose and judge the true reason. For a foreign owner, the practical consequence is immediate: document the business reason, not the person, from the first email onwards.

The same article then lists the four families of economic grounds: economic difficulty, technological change, a reorganisation needed to safeguard competitiveness, and the cessation of the company’s activity. Most foreign-owned small companies rely on the first, and the statute gives it teeth with indicators. The same article characterises economic difficulty by the significant movement of at least one economic indicator, giving falling orders, falling turnover, operating losses and deteriorating cash flow or gross operating surplus as examples, alongside any other factor capable of proving the difficulty. These are the figures the judge expects to see quantified. Keep in mind the calibration the statute adds for small employers: for a company with fewer than eleven employees, a significant fall measured over a single quarter can suffice. Where your French company employs fewer than eleven people, a significant fall in orders or turnover over a single quarter, compared with the same period of the previous year, can establish the difficulty. One quarter is enough for the smallest companies, two consecutive quarters are required between eleven and fifty employees, and longer periods beyond that. A single French employee therefore means the shortest observation window, but it never means no figures at all: bank statements, management accounts, the order book and the provisional accounts for the quarter must be assembled before the procedure starts, not after the employee’s lawyer writes.

Two assessment rules regularly trap foreign groups. First, the elimination of the position is assessed at company level, while the economic difficulty, the technological change or the need to safeguard competitiveness is assessed at the level of the business sector shared with the group, when the French company belongs to one. A profitable foreign parent does not automatically defeat the French difficulty, because the test runs at sector level, but a thriving sector with a struggling French subsidiary demands a convincing explanation, and simultaneous hiring in France on equivalent positions will destroy the file. Second, the cessation of activity is the cleanest ground when it is genuine: where the French company truly stops operating, the cause is straightforward, though the reclassification duty described below still applies. By contrast, closing the French position while openly recruiting the same profile in London, Berlin or New York invites the court to find the suppression artificial. Before choosing this track, ask yourself the question the judge will ask: if the role still exists somewhere in the business, why does it have to disappear in France.

Build the proof file as a litigator would, because the dismissal letter will be judged on the facts stated in it. Collect the comparative turnover figures quarter on quarter, the loss-making profit and loss account, the cash position, cancelled contracts or lost clients with dates, and any board or shareholder minute deciding the suppression of the position. If the structure is our usual hub company described in our guide to setting up a company in France as a foreign founder, the shareholder decision suppressing the role should be minuted in due form and translated for your own records. Figures prepared after the dispute starts, backdated minutes and generic formulas about a difficult context carry no weight. The judge reviews the facts as stated in the letter, so the letter must contain the concrete facts, which is why the drafting stage, covered in Part II, matters as much as the economics.

B. Reclassification Before Any Farewell: Written, Precise Offers Across France and Your Group

The heaviest obligation, and the one foreign employers most often discover too late, is the duty to seek another position for the employee before dismissing. Article L.1233-4 of the Labour Code states: “Le licenciement pour motif économique d’un salarié ne peut intervenir que lorsque tous les efforts de formation et d’adaptation ont été réalisés et que le reclassement de l’intéressé ne peut être opéré sur les emplois disponibles, situés sur le territoire national dans l’entreprise ou les autres entreprises du groupe dont l’entreprise fait partie et dont l’organisation, les activités ou le lieu d’exploitation assurent la permutation de tout ou partie du personnel”. No economic dismissal may occur until all training and adaptation efforts have been made and redeployment proves impossible on available positions, located on French territory, in the company or in the other companies of the group whose organisation, activities or operating site allow staff to move between them. Three consequences follow for a foreign owner. The search is limited to France, so you need not offer a position in your home country, but it extends to every French entity of your group where staff movement is possible, not only the employing company. Training and adaptation must be genuinely considered, which means checking whether a short training course could keep the employee in a neighbouring role. And the whole exercise must be documented in writing before the dismissal, because an oral claim that nothing was available will not survive a hearing.

The statute then sets the quality standard for the offers, requiring written offers that describe each available position precisely. Each offer must identify a real available position, with its title, duties, location, working time and pay, so the employee can give an informed answer. You have two compliant methods: send each employee personalised offers, or circulate by any means a list of all available positions to the whole workforce, under conditions set by regulation. In a one-employee company, personalised letters are the natural method. The position offered must be in the same category as the one held or an equivalent position with equivalent pay; a lower-category position is possible only with the employee’s express agreement. Send the offers by a traceable channel, allow a reasonable reply period, and keep copies with proof of dispatch. Where no position exists anywhere in the French perimeter, state the search steps in the file: entities contacted, positions reviewed, dates. An empty file reads as no search, and no search means a dismissal without real and serious cause.

Where several employees could be affected, even if you ultimately dismiss only one, the order of dismissals must also be settled within each employment area. The mechanism is simple and often overlooked: “Sur demande écrite du salarié, l’employeur indique par écrit les critères retenus pour fixer l’ordre des licenciements”, as Article L.1233-17 of the Labour Code provides. On the employee’s written request, you must state in writing the criteria used, applied within an area that cannot be smaller than the establishments concerned. Seniority, family responsibilities, age, professional qualities and situations making re-employment difficult are the classic factors the court will expect to see weighed. In practice, prepare the ranking note before the meeting even if nobody has asked yet, because the request often arrives with the lawyer’s first letter. A foreign parent restructuring its French team should also remember the collective dimension: dismissing ten or more employees within thirty days triggers an entirely different collective procedure with staff representatives and, above a threshold, a PSE, Plan de Sauvegarde de l’Emploi, the French mass-layoff plan. This guide covers the individual dismissal in a small company; if your project approaches that headcount, stop and take specific advice before the first invitation, because the individual track cannot be used to slice a collective operation into pieces.

II. The Procedure You Run From Abroad Without Writing the Case Against Yourself

Once the cause is established and the reclassification search is documented, the procedure itself runs on strict clocks that no distance excuses. French employment procedure is formalist by design: each deadline protects the employee’s right to prepare, and each missing document becomes an exhibit for the other side. The good news is that every step can be organised from abroad with a local representative, a reliable postal channel and electronic signature where appropriate. The bad news is that improvisation, backdating and oral arrangements are exactly what prud’hommes judges sanction most severely. What follows is the exact sequence for an individual economic dismissal in a company with fewer than one thousand employees, which is where the professional security contract applies.

A. Invitation, Interview, CSP Offer and Notification on Strict Clocks, Plus Every Euro Owed

Everything starts with the preliminary interview. Article L.1233-11 of the Labour Code provides: “L’employeur qui envisage de procéder à un licenciement pour motif économique, qu’il s’agisse d’un licenciement individuel ou inclus dans un licenciement collectif de moins de dix salariés dans une même période de trente jours, convoque, avant toute décision, le ou les intéressés à un entretien préalable.” Before any decision, the employee must be invited to a preliminary interview, by registered letter or hand-delivered letter against receipt, stating the purpose of the meeting, and the interview cannot take place less than five working days after presentation of the registered letter or hand delivery. From abroad, instruct your French counsel or a duly authorised representative to send the invitation by registered letter with acknowledgement of receipt, and count five full working days, Sundays and public holidays excluded. The interview itself can be conducted by your representative holding a written delegation; you may attend by video link alongside that representative, but the employee must be able to speak, be assisted by a staff member or, where there is no staff representation, by an outside adviser from the official list, and receive explanations of the economic reason and the reclassification efforts. Never announce the dismissal as already decided at this meeting: the decision must come afterwards, and minutes or a short written summary of what was said should be kept.

At the interview, or immediately in its wake, comes the step foreign employers most often miss: offering the professional security contract. Article L.1233-65 of the Labour Code defines it as follows: “Le contrat de sécurisation professionnelle a pour objet l’organisation et le déroulement d’un parcours de retour à l’emploi, le cas échéant au moyen d’une reconversion ou d’une création ou reprise d’entreprise.” It organises a supported return-to-work path, possibly through retraining or business creation, run in practice with France Travail, the French public employment operator. The Court of Cassation has spelled out when the offer is due: “dans les entreprises non soumises à l’article L. 1233-71, l’employeur est tenu de proposer, lors de l’entretien préalable ou à l’issue de la dernière réunion des représentants du personnel, le bénéfice du contrat de sécurisation professionnelle à chaque salarié dont il envisage de prononcer le licenciement pour motif économique”, as held in Social Chamber, 21 May 2025, appeal no. 22-11.901. In companies outside the large-company redeployment-leave scheme, the employer must offer the CSP to every employee facing economic dismissal, at the preliminary interview. The administration’s official guidance confirms a 21-day reflection period after delivery of the information document, with silence counting as refusal, as explained on the public service page on the professional security contract, the CSP. Under the scheme rules, acceptance brings a monthly professional security allowance computed from the daily reference salary, broadly 75 percent within applicable floors and ceilings, paid from the start without the usual waiting periods, plus twelve months of intensive support, as detailed on the official page on the professional security allowance. For the employer, acceptance means an immediate rupture with no notice period to manage, which is why the offer must be handed over correctly with the information document and the acceptance form, and the 21-day deadline tracked in writing. Failing to offer the CSP where it is due is itself a fault that costs money: the employee can claim damages and the unemployment contributions attached to the scheme.

After the interview and the CSP outcome, the dismissal, if it proceeds, is notified by registered letter with acknowledgement of receipt. Article L.1233-15 of the Labour Code sets the waiting period: “Cette lettre ne peut être expédiée moins de sept jours ouvrables à compter de la date prévue de l’entretien préalable de licenciement auquel le salarié a été convoqué.” The letter cannot be sent less than seven working days after the scheduled date of the preliminary interview, fifteen where the employee is a managerial employee covered by the specific provision. The letter must state precisely the economic facts, the suppression of the position, the figures for the relevant quarter, the reclassification steps taken and their result, and the CSP outcome. This precision is not stylistic; as explained below, the letter fixes the boundaries of the dispute, so a vague letter confines you to a vague defence. From abroad, have the letter prepared, dated, signed by the authorised signatory and posted by tracked registered mail from France; keep the posting receipt and the acknowledgement. Antedating, email-only notification or a letter signed by someone without authority are classic annulment material, in the same way our guide on overtime and proof with a first hire shows how French courts treat missing paperwork.

The financial package must be computed exactly. Article L.1234-9 of the Labour Code provides: “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.” An employee on an open-ended contract with eight months of uninterrupted service is entitled to severance, and the statutory floor is set by Article R.1234-2 of the Labour Code: “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 ; 2° Un tiers de mois de salaire par année d’ancienneté pour les années à partir de dix ans.” Take a concrete example: three years of service on a 3,500 euro gross monthly reference salary gives three times one quarter of a month, or 2,625 euros minimum, before any more generous collective agreement. Check the applicable collective bargaining agreement first, because most French sectors top up the statutory floor, and the agreement’s calculation method then governs. On top of severance come the notice period, worked or compensated with paid leave accrued on it, accrued paid holiday, any pro rata bonus, and, where the CSP was refused and the classic track applies, the full notice mechanics. Where the employee accepted the CSP, Article L.1233-67 of the Labour Code reshapes the package: “Cette rupture du contrat de travail, qui ne comporte ni préavis ni indemnité compensatrice de préavis ouvre droit à l’indemnité prévue à l’article L. 1234-9 et à toute indemnité conventionnelle qui aurait été due en cas de licenciement pour motif économique au terme du préavis”. No notice and no notice pay, but statutory and contractual severance remain due, plus any balance mechanics the article details. Finally, deliver the end-of-contract documents: Article L.1234-19 of the Labour Code requires that “A l’expiration du contrat de travail, l’employeur délivre au salarié un certificat dont le contenu est déterminé par voie réglementaire”, the employment certificate, and Article L.1234-20 of the Labour Code adds that “Le solde de tout compte, établi par l’employeur et dont le salarié lui donne reçu, fait l’inventaire des sommes versées au salarié lors de la rupture du contrat de travail”, the final payslip receipt listing every sum paid. Add the France Travail employer attestation enabling unemployment rights and file the DSN, Déclaration Sociale Nominative, the monthly electronic payroll and social data return, with the end-of-contract event. Late or missing documents generate fixed penalties per day of delay under case law, on top of the main dispute, which is why the closing checklist matters as much as the opening letter. Payroll and declaration errors can separately trigger the kind of URSSAF reassessment described in our guide to URSSAF audits from abroad.

B. What the Employee Can Still Challenge Within Twelve Months and What It Really Costs

Assume the procedure ran cleanly: the employee can still go to the labour court, and you should price that risk before deciding. The first rule concerns your own letter. Article L.1235-2 of the Labour Code provides: “La lettre de licenciement, précisée le cas échéant par l’employeur, fixe les limites du litige en ce qui concerne les motifs de licenciement.” The dismissal letter, as clarified where applicable, fixes the boundaries of the dispute as regards the grounds. The Court of Cassation draws the consequence strictly: “Il résulte de ces textes que la lettre de licenciement fixe les limites du litige en ce qui concerne les griefs articulés à l’encontre du salarié et que le juge a l’obligation d’examiner l’ensemble des griefs invoqués dans la lettre de licenciement”, held in Social Chamber, 23 October 2024, appeal no. 22-22.206. The judge must examine every ground stated in the letter, and, symmetrically, you cannot rely at trial on grounds the letter never mentioned. Two practical tools follow. The employee may ask you to clarify the stated grounds after notification, and you may clarify on your own initiative, within the regulatory time limits, which lets you sharpen vague wording before the hearing. Conversely, a thin letter cannot be repaired afterwards by inventing new facts. Draft the letter as if the judge will read only it, because in large part that is what happens.

The second rule surprises employers who chose the CSP track: acceptance does not close the dispute. The Court of Cassation holds that “l’acceptation par le salarié du contrat de sécurisation professionnelle est une modalité de licenciement”, and that the employee keeps “la faculté de contester le motif économique de la rupture ou le respect de l’obligation de reclassement préalable au licenciement ou encore le respect des règles relatives à l’ordre des licenciements”, both formulas recalled in the 21 May 2025 decision cited above. Accepting the CSP is legally a form of dismissal, and the employee retains the right to challenge the economic cause, the reclassification effort and the dismissal order. The time limit is short but real: “Toute contestation portant sur la rupture du contrat de travail ou son motif se prescrit par douze mois à compter de l’adhésion au contrat de sécurisation professionnelle”, still under Article L.1233-67 of the Labour Code, with the sting that “Ce délai n’est opposable au salarié que s’il en a été fait mention dans la proposition de contrat de sécurisation professionnelle.” The twelve-month clock runs from joining the CSP, but it can be held against the employee only if the CSP proposal mentioned it. Check your proposal template today: a missing notice sentence deprives you of the limitation defence. The classic track without CSP follows the general twelve-month employment limitation period, so either way you should keep the complete file, offers, letters, receipts, payroll records and proof of the figures, for well beyond a year.

The third rule is the price tag. Where the dismissal is held to lack real and serious cause, Article L.1235-3 of the Labour Code sends the judge to a statutory minimum-maximum scale set according to seniority, the Macron scale, with reduced minimums in companies that usually employ fewer than eleven people. The Court of Cassation enforces the scale strictly: “En application de l’article L. 1235-3 du code du travail, si le licenciement d’un salarié survient pour une cause qui n’est pas réelle et sérieuse, le juge octroie au salarié une indemnité à la charge de l’employeur, dont le montant est compris entre des montants minimaux et maximaux fixés par ce texte”, and it quashed an appeal ruling that had set the scale aside to award 32,000 euros at its own discretion: “CASSE ET ANNULE, mais seulement en ce qu’il condamne la société Pleyel centre de santé mutualiste à payer à Mme [E] la somme de 32 000 euros à titre d’indemnité pour licenciement sans cause réelle et sérieuse”, Social Chamber, 11 May 2022, appeal no. 21-14.490. For a first hire with one year of service in a small company, the exposure for an unfounded dismissal sits between a fraction of a month and a few months of salary, plus severance, notice and procedural extras, which is painful but quantifiable, and therefore negotiable. Pure procedural errors with a well-founded cause cost less: the same Article L.1235-2 caps that specific indemnity where it states that the judge awards the employee “une indemnité qui ne peut être supérieure à un mois de salaire”. This is the arithmetic to run before choosing between fighting and settling.

Litigation runs before the conseil de prud’hommes of the place of work, for a Paris-based employee the Paris labour court, with appeal to the Paris Court of Appeal, and your physical absence changes nothing: representation by French counsel with a proper mandate is routine, conciliation hearings can be prepared remotely, and settlement remains possible at every stage, including a court-approved settlement recorded in an enforceable minute. Compare this with the negotiated alternative: where the economic cause is weak or the reclassification file is thin, a rupture conventionnelle, the mutual separation agreement with its own interviews, withdrawal period and administrative approval, examined in our guide to the mutual separation for foreign employers, may cost less than a lost trial, but it requires consent given without any pressure and cannot be imposed as a substitute for dismissal. Where the economics are solid and the file is complete, run the economic track properly and keep the settlement option in reserve. And where the French activity itself is over rather than just the position, read our guide to closing and liquidating a French company from abroad before dismissing, because the order of operations between the dismissals and the dissolution changes the procedure. In all cases, the Paris and Île-de-France practice point is the same: the Paris labour court sees foreign-employer files every week, rewards complete documentary records, and punishes backdated or oral procedures without mercy.

Conclusion

Suppressing a French position from abroad is lawful, but only through the economic track with its full guarantees: a non-personal cause proved with quarterly figures, a genuine written reclassification search across your French perimeter, a preliminary interview on five working days notice, a CSP offer with its 21-day reflection period, a notification letter on seven working days that states every fact you will rely on, exact severance with the collective agreement checked, and complete end-of-contract documents with the DSN filed. The employee keeps twelve months to challenge the cause, the reclassification and the order, even after accepting the CSP, and the Macron scale prices an unfounded dismissal within known bounds, which makes a clean file both a shield and a negotiating asset. Do not improvise any step by email from another time zone: mandate someone in France, calendar every deadline in working days, and keep every receipt. Handled this way, an economic dismissal closes the French chapter without opening a prud’hommes one.

Need a quick opinion on your case

You are about to suppress a French position or you have just received a labour court claim after an economic dismissal. The firm offers a phone consultation within 48 hours with a firm lawyer. Phone consultation: 80 EUR TTC. To arrange a callback, call +33 6 46 60 58 22 or write via the firm’s contact page, attaching the dismissal letter, the CSP documents, the reclassification offers, the latest accounts and any labour court summons. Assistance in Paris and Île-de-France, before the Paris labour court and the Paris Court of Appeal, and remotely for the rest of France.