You hired your first employee in France from abroad, and a few months later the reality is uncomfortable: targets missed, clients complaining, or simply a working relationship that never clicked. In many countries you would end the contract with a short notice letter and move on. In France, that reflex can cost your young company a year of litigation and tens of thousands of euros. French dismissal law applies in full to your French subsidiary or branch even when the founder, the president and the bank account signatory all live in London, New York, Dubai or Singapore. The employee works in France, so the French Labour Code (Code du travail) governs the employment contract, and the French labour court (conseil de prud’hommes, the elected court that hears individual employment disputes) will judge any dispute.

This guide explains, for a foreign founder or foreign parent company managing a French team remotely, the two lawful exits once the trial period is over: dismissal for personal grounds (licenciement pour motif personnel), with its strict step-by-step procedure, and the negotiated mutual separation agreement (rupture conventionnelle), which is often the safer route for a small structure run from abroad. You will find the exact procedure, the true cost of each option with worked examples, the labour court risk measured by the statutory compensation scale, and the Paris and Île-de-France specifics that change timelines in practice. The trial period itself, which follows different rules, is covered in our companion guide for foreign employers, and the general setup steps for a foreign founder are described in our pillar guide to setting up a company in France as a foreign founder: Setting Up a Company in France as a Foreign Founder.

I. Dismissing your French employee for personal grounds while you live abroad: a procedure you must follow to the letter

Once the trial period has ended, an open-ended contract (contrat à durée indéterminée, universally shortened to CDI, the standard French permanent contract) can only be broken by the employer through a dismissal (licenciement) based on a real and serious cause (cause réelle et sérieuse), through a negotiated agreement, or through resignation by the employee. There is no at-will employment in France. Poor performance, repeated mistakes, insubordination or loss of trust can justify a dismissal for personal grounds, but the reason must be genuine, exact, objective and serious enough, and you must prove it with documents: appraisals, written warnings, emails recording missed deadlines, client complaints. A foreign manager who supervised informally over video calls and never wrote anything down starts a dismissal with a serious handicap, because the dismissal letter alone will later define what the judge is allowed to examine.

A. Summon, meet and notify: the three steps that decide the case before it exists

French law imposes a preliminary meeting (entretien préalable) before any dismissal decision. The employer who considers dismissing an employee must summon that employee to a preliminary meeting before taking any decision, and the summons is sent by registered letter or delivered by hand against receipt, stating the purpose of the meeting. The exact statutory wording is: “L’employeur qui envisage de licencier un salarié le convoque, avant toute décision, à un entretien préalable.” (Article L1232-2 of the Labour Code). The meeting cannot take place less than five working days after presentation of the registered letter or hand delivery of the summons: “L’entretien préalable ne peut avoir lieu moins de cinq jours ouvrables après la présentation de la lettre recommandée ou la remise en main propre de la lettre de convocation.” (Article L1232-2 of the Labour Code). Working days (jours ouvrables) mean every day of the week except Sundays and public holidays normally not worked in the company. For a founder abroad, the practical lesson is immediate: send the registered letter with acknowledgement of receipt from France, keep the proof of presentation, and count the five days from presentation, not from posting.

During the meeting, the employee may be assisted by a person of their choice from the company staff, and where there is no staff representative body, which is the normal situation in a one-employee subsidiary, the employee may instead be assisted by an external employee adviser (conseiller du salarié) chosen from an official list drawn up by the administration: “Lors de son audition, le salarié peut se faire assister par une personne de son choix appartenant au personnel de l’entreprise.” (Article L1232-4 of the Labour Code). The summons letter must mention this possibility and give the address of the offices where the list of advisers is available. Omitting that mention is itself penalised. A foreign president who flies in for the meeting, or who mandates a local representative with a written power of attorney, must therefore prepare the letter carefully in French and check that it contains the subject matter, the date, place and time, and the assistance notice. The government publishes the current procedure and official letter templates, and the Ministry of Labour page on dismissal for personal grounds usefully confirms each of these steps for employers who want a second official source alongside the statute.

The dismissal itself is notified by registered letter with acknowledgement of receipt, stating the ground or grounds relied on by the employer, and it cannot be sent less than two working days after the date scheduled for the preliminary meeting: “Lorsque l’employeur décide de licencier un salarié, il lui notifie sa décision par lettre recommandée avec avis de réception.” (Article L1232-6 of the Labour Code), and “Elle ne peut être expédiée moins de deux jours ouvrables après la date prévue de l’entretien préalable au licenciement auquel le salarié a été convoqué.” (Article L1232-6 of the Labour Code). This letter is the most important document of the whole process, because the dismissal letter, clarified where applicable by the employer, sets the boundaries of the dispute as regards the grounds for dismissal: “La lettre de licenciement, précisée le cas échéant par l’employeur, fixe les limites du litige en ce qui concerne les motifs de licenciement.” (Article L1235-2 of the Labour Code). Grounds you forgot to mention in the letter cannot be added later before the judge, although the employer may clarify the stated grounds afterwards, on its own initiative or at the employee’s request, within the time limits set by decree. A vague letter mentioning a general “loss of confidence” or “unsatisfactory performance” without dated facts invites the court to find that the dismissal lacks a real and serious cause. Insufficient reasoning alone, without any request for clarification from the employee, does not by itself deprive the dismissal of real and serious cause but gives rise to compensation capped at one month’s salary, whereas a dismissal genuinely without real and serious cause is compensated under the statutory scale described below, with the shortfall in reasoning absorbed into that award: Where the dismissal genuinely lacks real and serious cause, the statute directs that the harm caused by defective reasoning in the termination letter is compensated through the award determined under Article L1235-3 (Article L1235-2 of the Labour Code).

B. Notice, severance pay and final paperwork: what the exit really costs

Dismissal does not end the contract on the day the letter arrives. Except in cases of serious or gross misconduct, the employee performs or is paid for a notice period (préavis), whose length is set by the employment contract, the applicable collective agreement (convention collective, the sector-wide agreement that sets minimum working conditions on top of the statute) or, failing that, by local custom. When the employee does not work the notice, for instance because the employer releases them from it, they are entitled, unless guilty of serious misconduct, to compensatory notice pay, and the failure to work the notice does not reduce any salary or benefit the employee would have received: “Lorsque le salarié n’exécute pas le préavis, il a droit, sauf s’il a commis une faute grave, à une indemnité compensatrice.” (Article L1234-5 of the Labour Code). This compensatory payment cumulates with severance pay. Foreign founders sometimes assume that paying one lump sum settles everything; French law stacks the items, and each must appear separately on the final payslip.

Statutory severance pay (indemnité légale de licenciement) is due to an employee on an open-ended contract who is dismissed once they have eight months of uninterrupted service with the same employer, except in cases of serious misconduct: “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 L1234-9 of the Labour Code). The minimum amount is set by regulation: one quarter of a month’s salary per year of service for years up to ten, then one third of a month per year from ten years on: The regulatory floor is one quarter of a month’s salary per year of service for the first ten years, rising to one third of a month per year beyond ten years (Article R1234-2 of the Labour Code). The applicable collective agreement frequently provides a higher contractual severance, and the employee always receives whichever is more favourable. Take a concrete example: a first hire in Paris paid 3,500 euros gross per month, dismissed after two full years with no misconduct. Statutory severance equals 3,500 x 0.25 x 2, which is 1,750 euros, plus one month of compensatory notice if the sector agreement sets a one-month notice that is not worked, plus accrued paid holiday, plus the employment certificate (certificat de travail), the final settlement receipt (solde de tout compte) and the France Travail certificate (attestation France Travail, the document issued to the public employment service so the former employee can claim unemployment benefits, formerly called attestation Pôle emploi). Social charges collecting body URSSAF (Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the agency that collects employer and employee social contributions) and the payroll declaration system DSN (déclaration sociale nominative, the monthly electronic payroll return) must reflect the departure correctly, which is why a payroll provider in France is not optional for a foreign-run company at dismissal time.

Two traps specific to foreign employers deserve emphasis. First, the dismissal must be signed by a person with authority to represent the company: the president of the SAS (société par actions simplifiée, the flexible limited company most foreign founders choose), a duly empowered manager, or counsel with a written mandate. A letter signed from abroad by the foreign parent company, rather than by the French employing entity, creates a dispute about who dismissed the employee. Second, dismissing for economic reasons, for instance because the French market launch failed and the position is eliminated, triggers a separate and heavier procedure with redeployment obligations, and for two or more employees additional collective rules; the present guide covers only dismissal for personal grounds and the negotiated route, which are the two realistic options for a single first hire who did not work out. If the real reason is the disappearance of the job itself, seek advice before writing anything, because using a personal-grounds letter to disguise an economic dismissal is one of the fastest routes to losing before the labour court.

II. Negotiating the exit or facing the labour court: the choices of a foreign employer who cannot afford a mistake

For a small French subsidiary run from abroad, a dismissal for personal grounds is lawful but fragile: every procedural step is a potential ground for extra compensation, the manager who documented performance is often on another continent, and the employee knows that contesting costs them little. That is why the negotiated mutual separation (rupture conventionnelle) deserves first consideration. It is the standard French tool for an agreed exit, it gives the employee unemployment benefits unlike a resignation, and when properly homologated it closes the dispute far more securely than a unilateral dismissal.

A. The negotiated separation agreement: consent, minimum payment and approval that protect both sides

The employer and the employee may agree together on the conditions for ending the employment contract, and this agreed termination, which excludes dismissal or resignation, cannot be imposed by either party but results from an agreement signed by both sides: “L’employeur et le salarié peuvent convenir en commun des conditions de la rupture du contrat de travail qui les lie.” (Article L1237-11 of the Labour Code), and “Elle résulte d’une convention signée par les parties au contrat.” (Article L1237-11 of the Labour Code). Any pressure, threat or deceit tainting consent annuls the agreement, and judges examine consent closely when the employee signed quickly after a conflict. A foreign founder should therefore hold at least one genuine discussion meeting, ideally with an interpreter if the employee prefers French, leave the employee time to reflect, and never present the pre-filled agreement as a take-it-or-leave-it dismissal alternative.

The agreement sets the conditions of the termination, including a specific separation payment that cannot be lower than the statutory severance pay, and it fixes the end date of the contract, which cannot fall before the day after approval: the agreement must grant a specific separation payment at least equal to the statutory severance pay defined by Article L1234-9 (Article L1237-13 of the Labour Code). In practice the payment is negotiated above that floor, often between the statutory minimum and what a dismissal without real and serious cause would cost under the compensation scale, because the employee gives up the right to challenge the termination. From the date of signature each party has fifteen calendar days to withdraw: “chacune d’entre elles dispose d’un délai de quinze jours calendaires pour exercer son droit de rétractation.” (Article L1237-13 of the Labour Code). Only after that period may the more diligent party request approval (homologation) from the administration, and the authority has fifteen working days from receipt to check compliance and voluntary and informed consent, with silence meaning approval: “L’autorité administrative dispose d’un délai d’instruction de quinze jours ouvrables, à compter de la réception de la demande, pour s’assurer du respect des conditions prévues à la présente section et de la liberté de consentement des parties.” (Article L1237-14 of the Labour Code), and “A défaut de notification dans ce délai, l’homologation est réputée acquise et l’autorité administrative est dessaisie.” (Article L1237-14 of the Labour Code). The agreement is only valid once approved: “La validité de la convention est subordonnée à son homologation.” (Article L1237-14 of the Labour Code). Any dispute over the agreement, the approval or a refusal of approval goes to the labour court, and court action is inadmissible after twelve months from the approval date: “Le recours juridictionnel doit être formé, à peine d’irrecevabilité, avant l’expiration d’un délai de douze mois à compter de la date d’homologation de la convention.” (Article L1237-14 of the Labour Code). Since 2022 the request is filed online through the TeleRC portal, which a foreign signatory can complete with a French-registered company account, and the competent authority is the DREETS (Direction régionale de l’économie, de l’emploi, du travail et des solidarités, the regional labour administration) of the employee’s workplace, so a Paris-based employee means the Île-de-France DREETS.

The Court of Cassation enforces these deadlines strictly, including against employers. In a leading case on a second agreement signed after the administration refused to approve the first one because the payment was below the minimum, the Court held that a party may not validly request approval before expiry of the fifteen-day withdrawal period: “une partie à une convention de rupture ne peut valablement demander l’homologation de cette convention à l’autorité administrative avant l’expiration du délai de rétractation de quinze jours prévu par le premier de ces textes” (Court of Cassation, Social Chamber, 13 June 2018, appeal no. 16-24.830). Because the employee had not enjoyed a fresh withdrawal period for the second agreement, that second agreement was void: “la salariée devait bénéficier d’un nouveau délai de rétractation et que, n’en ayant pas disposé, la seconde convention de rupture était nulle” (Court of Cassation, Social Chamber, 13 June 2018, appeal no. 16-24.830). The void agreement was then reclassified as a dismissal without real and serious cause. For a foreign employer tempted to rush a corrected agreement through TeleRC after a refusal, the message is blunt: restart the full timetable, fifteen calendar days of withdrawal plus fifteen working days of instruction, and only then set the departure date.

B. If the employee sues: the labour court, the compensation scale and Paris practice

The labour court settles by conciliation first, then judges, the disputes arising from any employment contract between employers or their representatives and the employees they employ: “Le conseil de prud’hommes règle par voie de conciliation les différends qui peuvent s’élever à l’occasion de tout contrat de travail soumis aux dispositions du présent code entre les employeurs, ou leurs représentants, et les salariés qu’ils emploient.” (Article L1411-1 of the Labour Code). Proceedings start with a mandatory conciliation hearing, where many cases settle, and continue to a full hearing if conciliation fails. A foreign company does not need to fly its founder to Paris for every hearing: representation by a French lawyer with a proper mandate is standard, and conciliation can sometimes be handled through a duly authorised representative. But the founder’s absence has a cost in settlement talks, because the court and the employee’s counsel read a distant, silent employer as an employer ready to pay rather than explain.

Time limits are short. Any claim concerning the termination of the contract is subject to a twelve-month limitation period running from notification of the termination: “Toute action portant sur la rupture du contrat de travail se prescrit par douze mois à compter de la notification de la rupture.” (Article L1471-1 of the Labour Code). Keep every proof of notification and every payroll record for well beyond that year, because a former employee can file on the last day of the eleventh month and your French entity must still be reachable, with its legal representative identifiable, to receive the summons. Companies that closed their Paris address and left no representative discover the claim through a default judgment.

If the dismissal is judged without real and serious cause, the court may propose reinstatement, and if either side refuses, it awards compensation within a statutory minimum-maximum scale: Where a dismissal rests on no real and serious cause, the court awards the employee compensation paid by the employer, set between the minimum and maximum amounts of the statutory table (Article L1235-3 of the Labour Code). This is the so-called Macron scale. For a full-time employee with two years of service in a company of eleven or more employees, the scale runs from 3 to 7 months’ gross salary; in a company that usually employs fewer than eleven employees, the minimum for two years is 0.5 months with the same 7-month ceiling. On a 3,500-euro salary, two years of service therefore exposes the employer to between 10,500 and 24,500 euros for the loss of employment alone, before adding statutory severance, notice, paid holiday, procedural penalties of up to one month each, and reimbursement of unemployment benefits to France Travail. The scale’s compatibility with international law was challenged for years, and the Court of Cassation has now confirmed that the provisions of Article L1235-3 are compatible with Article 10 of International Labour Organisation Convention no. 158: “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” (Court of Cassation, Social Chamber, 21 May 2025, appeal no. 24-10.362). Within the scale, the judge sets the amount according to the concrete situation of the employee, which is why age, difficulty finding equivalent work, and length of unemployment after the dismissal matter at the hearing.

Paris and Île-de-France add practical specifics that a remote founder should price in. The Paris labour court is one of the busiest in France, and a contested dismissal commonly takes twelve to eighteen months from filing to judgment at first instance, with appeal adding another year. Conciliation hearings in Paris settle a significant share of cases, and the amounts discussed there track the statutory scale closely, so an employee advised by Paris counsel usually values their claim at the ceiling of their scale bracket plus procedural extras. The Île-de-France DREETS examines approval requests for negotiated separations with the same fifteen-working-day clock as elsewhere, but filings from Paris postcodes face experienced case officers who verify the payment floor against the sector agreement, so attaching the correct collective agreement reference in TeleRC avoids a refusal and a wasted month. Finally, remember that Paris-sector collective agreements, notably the Syntec agreement widely used by tech and consulting subsidiaries, often set notice periods of two to three months for managerial staff (cadres, the executive and managerial category) and severance above the statutory floor; the agreement applicable to your employee, stated on their payslip, overrides any assumption imported from abroad. Our guide to the first hire’s trial period, overtime and workplace accidents completes this picture of employer duties from day one, and the annual legal calendar of a French company reminds foreign directors that employment compliance is only one of several yearly filings to monitor from abroad.

Conclusion

A first hire who does not work out is not the end of a French venture, but the exit must be engineered with French tools. Document performance in writing from the first warning, follow the summons, meeting and notification sequence to the day, pay each element of the final settlement separately, and weigh the negotiated separation, with its fifteen-day withdrawal period and administrative approval, against the lottery of a contested dismissal measured by the statutory scale. Run from abroad, the safest sequence is usually a genuine discussion, a fair agreement above the statutory floor, approval through the regional labour authority, and clean payroll closure, keeping the unilateral dismissal as the fallback when agreement is impossible. Either way, the decision, the letters and the timetable should be checked against the current statutes before anything is sent, because in French employment litigation the procedure is the substance, and the employer who masters it keeps control of the cost.