You hired your first employee in France to get your subsidiary or branch running, and the relationship is not working out. The employee misses targets, challenges every instruction, or the French activity simply cannot fund the position anymore. From London, New York, Dubai or Singapore, dismissing that employee looks like sending a termination email and moving on. Under French law, that email alone can cost you a full labour court defeat. France does not know employment at will: every dismissal of an employee on a CDI (contrat à durée indéterminée, the standard permanent employment contract) requires a real and serious cause, a strict step-by-step procedure, and written reasons that will bind you before the judge. This guide explains, for a foreign founder or parent company managing a French team from abroad, how to run a lawful personal dismissal, what notice and documents you owe at the end of the contract, how to calculate the severance cost for a short length of service, and how the conseil de prud’hommes (the French labour court for employment disputes) will review your file if the employee challenges the dismissal.

I. How do you lawfully dismiss your first employee in France when you live abroad?

French dismissal law applies in full from the very first hire. There is no small-employer exemption from the procedure: whether your French company employs one person or one thousand, the Code du travail (the French Labour Code) imposes the same invitation, meeting and written notification sequence for a dismissal on personal grounds, meaning grounds linked to the employee such as poor performance, professional inadequacy or misconduct. Economic dismissals follow a different and heavier regime, with obligations such as the CSP (contrat de sécurisation professionnelle, a reclassification-support scheme offered in companies with fewer than 1,000 employees), and they deserve separate advice. This first part covers the ordinary personal dismissal, which is the situation most foreign founders face with a first hire who does not meet expectations, and the practical way to handle each step while you are based outside France.

A. What dismissal procedure must a foreign employer follow: invitation, meeting and notification letter?

Everything starts with a rule many foreign employers discover too late: the decision must come last, after a formal exchange with the employee. Article L1232-2 of the Labour Code provides that “L’employeur qui envisage de licencier un salarié le convoque, avant toute décision, à un entretien préalable.” (Article L1232-2, Code du travail, Légifrance). In plain English, before making any decision, the employer summons the employee to a preliminary meeting. The invitation must be sent by registered letter or handed over in person against a signed receipt, it must state its purpose, and the meeting cannot take place less than five working days after the registered letter is presented or the hand-delivered letter is given to the employee. For a founder living abroad, the safest channel is a lettre recommandée avec avis de réception (registered letter with acknowledgment of receipt) sent to the employee’s home address, keeping the postal proof of presentation date, because that date starts the five-working-day clock. A simple email or phone call does not satisfy the statute.

The meeting itself matters more than its name suggests. You do not have to travel to France in person: the meeting can be conducted by the employer or by a person mandated for that purpose, such as a local manager, an HR consultant with a written mandate, or your French counsel holding a clear power to hear the employee. What counts is that the employee is genuinely heard. You must state the reasons you are considering dismissal and listen to the employee’s explanations. Skipping this exchange, or holding a meeting that is a mere formality where the decision is already announced, exposes the dismissal to challenge for procedural irregularity. Document the meeting in writing on the same day: who attended, what was said, which documents were shown. That note becomes your evidence if the labour court later questions whether the exchange was real.

One trap is specific to very small companies and therefore to almost every first hire. Article L1232-4 of the Labour Code states that “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, Code du travail, Légifrance). Where, as in your case, there are no staff representative bodies, the employee may instead be assisted by an outside conseiller du salarié (an independent employee adviser listed by the administrative authority). Your invitation letter must mention that option and give the address of the office where the list of advisers is available. Omitting that paragraph from the letter is one of the most common mistakes of foreign employers, and it is also one of the easiest for an employee’s lawyer to spot. The DREETS (direction régionale de l’économie, de l’emploi, du travail et des solidarités, the regional labour administration) in the region of the workplace, for a Paris-based employee the DREETS of Ile-de-France, holds the list. Copy the exact contact details into the letter.

After the meeting, the clock continues. Article L1232-6 of the Labour Code provides that “Lorsque l’employeur décide de licencier un salarié, il lui notifie sa décision par lettre recommandée avec avis de réception.” (Article L1232-6, Code du travail, Légifrance). That same article adds that “Cette lettre comporte l’énoncé du ou des motifs invoqués par l’employeur.” In other words, the dismissal must be notified by registered letter with acknowledgment of receipt, and that letter must state the employer’s reasons. Two timing rules frame this step: the letter cannot be sent less than two working days after the scheduled date of the preliminary meeting, and in disciplinary cases additional shorter time limits apply. Send the letter from wherever you are, but use international registered mail with acknowledgment of receipt to the employee’s home in France, and keep every postal slip. The Cour de cassation (the French supreme court for civil and criminal matters) regularly recalls this requirement word for word: “Selon ce texte, lorsque l’employeur décide de licencier un salarié, il lui notifie sa décision par lettre recommandée avec avis de réception. Cette lettre comporte l’énoncé du ou des motifs invoqués par l’employeur.” (Cass. soc., 22 Oct. 2025, No. 24-17.333, Cour de cassation). In that decision the Court also held that “Lorsqu’un salarié est lié à des coemployeurs par un contrat de travail unique, le licenciement prononcé par l’un d’eux, qui met fin au contrat de travail, est réputé prononcé par tous.” Foreign groups should note the point: where a co-employment structure exists between the parent and the French entity, the letter signed by one is deemed signed by all, and its reasons must hold for each of them.

The notification letter deserves the greatest care because it will freeze the dispute. Article L1235-2 of the Labour Code states that “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, Code du travail, Légifrance). The dismissal letter, as clarified where applicable, sets the boundaries of the dispute over the grounds. Before the labour court, you will not be allowed to add new reasons that are absent from the letter. A vague formula such as loss of confidence or reorganisation, without facts, dates and examples, invites the judge to find that the dismissal lacks a real and serious cause. Conversely, a letter that lists precise, dated and checkable facts, with the evidence to support each of them, narrows the employee’s room to challenge. The statute allows the employer to clarify the reasons after notification, on its own initiative or at the employee’s request, within the time limits set by regulation, so use that second chance if the employee asks for details. The Chamber sociale (the social chamber of the Cour de cassation, which hears employment cases) confirmed in October 2024 that the judge must examine all the grievances stated in the letter, as clarified where applicable, because the letter defines the dispute (see Cass. soc., 23 Oct. 2024, No. 22-22.206, Cour de cassation). Draft the letter as if the judge will read it first, because that is exactly what will happen.

Two timing warnings complete the picture for dismissals linked to misconduct. Article L1332-4 of the Labour Code provides that “Aucun fait fautif ne peut donner lieu à lui seul à l’engagement de poursuites disciplinaires au-delà d’un délai de deux mois à compter du jour où l’employeur en a eu connaissance, à moins que ce fait ait donné lieu dans le même délai à l’exercice de poursuites pénales.” (Article L1332-4, Code du travail, Légifrance). No single act of misconduct can trigger disciplinary proceedings more than two months after the employer learned of it, unless criminal proceedings were started within the same period. If your first employee committed serious misconduct months ago and you kept working with them without reacting, you can no longer use that old fact as a disciplinary ground. Act quickly, document when and how you learned each fact, and separate ordinary performance issues from disciplinary fault in your file. For founders choosing the right vehicle before hiring, our pillar guide on choosing between a French SAS, SARL, branch or subsidiary as a foreign investor explains which structure best supports a first recruitment.

B. What notice, final documents and last payments must you deliver when the contract ends?

Once the dismissal letter is sent, the contract does not always end on the spot. Except in cases of faute grave (serious misconduct) or faute lourde (gross misconduct with intent to harm), the employee is entitled to a préavis (a notice period during which the contract continues). The length of the notice is set by the employment contract or by the applicable convention collective (the sector-wide collective bargaining agreement that covers the position), not by a single statutory duration, so check both documents before writing the letter. During the notice the employee keeps working and being paid, unless you exempt them from performing it. If the employee does not work the notice, Article L1234-5 of the Labour Code provides a clear compensation rule, ending with the sentence: “L’indemnité compensatrice de préavis se cumule avec l’indemnité de licenciement et avec l’indemnité prévue à l’article L. 1235-2 .” (Article L1234-5, Code du travail, Légifrance). The compensatory payment for unused notice adds up with the severance payment and with the payment provided for procedural defects. From abroad, the practical step is simple: state in the dismissal letter whether the employee will work the notice or is released from it, and order payroll to pay the compensatory amount with the final settlement. An ambiguous letter creates disputes about salary for the notice months.

At the end of the contract you must deliver three documents, and each of them has a legal function the employee’s next employer or France Travail (the French public employment service, formerly Pole emploi, which pays unemployment benefits) will check. First, the certificat de travail (the employment certificate summarising the positions held and the period of employment). Article L1234-19 of the Labour Code states that “A l’expiration du contrat de travail, l’employeur délivre au salarié un certificat dont le contenu est déterminé par voie réglementaire.” (Article L1234-19, Code du travail, Légifrance). Second, the attestation France Travail (the employer certificate for unemployment insurance), which the employee needs to claim benefits and which you file through the DSN (déclaration sociale nominative, the monthly electronic payroll and social data return) or the dedicated online service. Delays or errors in that certificate directly postpone the employee’s benefits and feed damages claims, so process it in the same payroll run as the dismissal. Third, the solde de tout compte (the final itemised settlement receipt). Article L1234-20 of the Labour Code explains 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.” (Article L1234-20, Code du travail, Légifrance). The receipt lists every sum paid on termination, and the employee can challenge it within six months of signature, after which it becomes conclusive for the sums it mentions. Have payroll prepare the settlement, send two copies for signature, and keep proof of delivery.

The final payment itself combines several lines: salary for the days worked, the compensatory payment for notice if the employee does not work it, the indemnité compensatrice de congés payés (compensation for accrued but untaken paid leave), the statutory or contractual severance payment detailed in the second part of this guide, and any applicable contractual bonuses or profit-sharing prorated to the departure date. For a founder abroad, the operational lesson is to keep a French payroll provider or accountant in the loop from the day the invitation letter is sent, so that the settlement figures are ready when the notice ends. Late or short final payments accrue interest and penalties, and they colour the whole file if the case goes to court. If the dismissal follows an overtime dispute, the companion analysis on overtime, 35-hour week and time records for a first French hire shows how to reconstruct working time before the dispute hardens. And because every dismissal can trigger questions about contributions, the guide on URSSAF audits and contribution reassessments for foreign employers explains what the URSSAF (union de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the agency collecting social security contributions) will examine in your payroll.

II. How much does dismissing your first French employee cost and how do you limit labour court risk from abroad?

Cost and risk are the two questions every foreign founder asks once the procedure is understood. French law answers both with arithmetic and with scales: a statutory formula for the minimum severance, the Macron scale that frames damages for dismissal without real and serious cause, and procedural rules that decide how the labour court will read your file. This second part puts numbers on each line and shows how to challenge-proof the dismissal while managing everything from outside France.

A. How do you calculate severance pay, notice compensation and unused leave for a short length of service?

Start with the threshold question: does your employee qualify for statutory severance at all? Article L1234-9 of the Labour Code answers: “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, Code du travail, Légifrance). An employee on a permanent contract who is dismissed with at least eight months of continuous service with the same employer is entitled to severance, except in cases of serious misconduct. Below eight months of service, no statutory severance is due, though the contract or the collective agreement may grant more, and any dismissal without real and serious cause can still produce damages. Check the convention collective first: many sector agreements grant severance from day one or use a richer formula, and the employee always receives whichever calculation is most favourable.

The statutory formula itself is set by regulation. Article R1234-2 of the Labour Code provides that the payment cannot be less than “Un quart de mois de salaire par année d’ancienneté pour les années jusqu’à dix ans” and “Un tiers de mois de salaire par année d’ancienneté pour les années à partir de dix ans.” (Article R1234-2, Code du travail, Légifrance). In English: one quarter of a month’s salary per year of service for the first ten years, then one third of a month per year beyond ten years. Article R1234-1 adds the proration rule: “En cas d’année incomplète, l’indemnité est calculée proportionnellement au nombre de mois complets.” (Article R1234-1, Code du travail, Légifrance). For an incomplete year, the payment is calculated in proportion to the number of full months. The reference salary is the most favourable to the employee of two averages: the average of the last twelve months or the average of the last three months, including bonuses prorated over time.

Three worked examples show what a first hire really costs. Example one: an employee with eleven months of service and a gross monthly reference salary of 3,500 euros. Eleven months clears the eight-month threshold. The calculation runs 11/12 of a year multiplied by one quarter of a month: 3,500 divided by 4 equals 875 euros for a full year, multiplied by 11/12 gives about 802 euros of statutory severance. Example two: an employee with two full years at 4,000 euros gross per month. Two years at one quarter of a month each gives 2,000 euros. Example three: an employee with three years at 4,500 euros gross, where the collective agreement grants one third of a month per year from the first year. The contractual formula beats the statute, so the employee receives 4,500 euros. In each case, add the compensatory payment for notice if not worked, the leave compensation, and the salary for days worked. A founder who budgets only the severance line will understate the real exit cost by a wide margin.

Notice compensation follows the salary the employee would have earned. If the notice is two months at 4,000 euros gross and you release the employee from working it, you owe 8,000 euros gross plus the paid leave that would have accrued during those two months. Leave compensation equals one tenth of the gross pay earned during the leave reference year for the leave not yet taken, adjusted for the specific rules of your collective agreement. Payroll must also settle variable pay: commissions earned before departure, prorated annual bonus where the agreement or contract provides for it, and any RTT (réduction du temps de travail, additional rest days granted where working time exceeds 35 hours per week) balance. Ask your payroll provider for a pre-settlement simulation before the notification letter goes out, so the letter, the settlement and the DSN all show consistent figures.

B. How do you protect the dismissal before the French labour court and settle the dispute from abroad?

If the employee challenges the dismissal, the case goes to the conseil de prud’hommes of the place of work, for a Paris-based employee the Paris labour court, whose greffe (the court registry) receives the claim. The judge first checks the procedure, then the substance. Procedural defects alone, such as a late invitation or a missing assistance paragraph, give rise to a specific indemnity capped at one month’s salary where the dismissal otherwise has a real and serious cause. The real battle is over the cause. The judge examines only the reasons stated in the letter, as clarified where applicable, and assesses whether they are real, meaning based on accurate facts, and serious, meaning grave enough to make continuing the contract impossible. Article L1235-1 of the Labour Code closes with a rule every foreign employer should memorise: “Si un doute subsiste, il profite au salarié.” (Article L1235-1, Code du travail, Légifrance). If any doubt remains, it benefits the employee. Build the file accordingly: dated warnings, performance reviews signed by both sides, measurable targets, client complaints, attendance records. A dismissal letter that asserts underperformance without attaching the paper trail behind it leaves the doubt in place, and the doubt goes to the employee.

Where the cause fails, damages are framed by the Macron scale. Article L1235-3 of the Labour Code states: “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 L1235-3, Code du travail, Légifrance). If the dismissal lacks a real and serious cause, the judge may propose reinstatement with accrued benefits maintained. Where either side refuses reinstatement, the judge awards damages within the statutory minimum and maximum table, which runs by years of complete service: for example, up to one month for zero years of service, up to two months for one year, up to three and a half months for two years, with lower minimums in companies that usually employ fewer than eleven employees. The Cour de cassation confirmed that this scale is compatible with international law, holding that “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., 21 May 2025, No. 24-10.362, Cour de cassation). The Court reasoned that these provisions “sont de nature à permettre le versement d’une indemnité adéquate ou une réparation considérée comme appropriée au sens de l’article 10 de la Convention n° 158 de l’Organisation internationale du travail (OIT).” For a first hire with under two years of service, the exposure for an unfair dismissal therefore stays within a few months of salary, plus the severance, notice and procedural indemnities, which is precisely why employees’ lawyers also pursue every additional line: overtime arrears, leave compensation, and the reimbursement of unemployment benefits to France Travail.

Managing the dispute from abroad is a matter of organisation, not presence. First, centralise the file with French counsel at the invitation stage, not after receiving the prud’hommes summons: the letter you send today is the case you will plead in eighteen months. Second, keep a litigation hold on all evidence, including emails, messaging logs, badge data and performance tools, within their lawful retention limits. Third, use the conciliation hearing seriously: Article L1235-1 allows the parties, at the conciliation stage, to end the dispute by agreement providing for a lump-sum payment set by reference to a decree scale, and the recorded agreement closes all claims relating to the termination. Many first-hire disputes settle at that hearing for an amount between the statutory severance and the lower end of the Macron scale, which both sides can accept to avoid a full trial. Fourth, consider the rupture conventionnelle (the agreed termination by mutual consent, approved by the labour administration) as an alternative where the relationship allows it: it requires at least one meeting, a statutory minimum payment equal to the severance described above, and administrative approval, but it removes the dismissal litigation risk entirely. For founders planning the broader setup around a first hire, from registration to payroll, the step-by-step guide on setting up a company in France as a foreign founder puts the dismissal risk in its full context, and the yearly overview of the French company’s annual legal calendar helps schedule the payroll and filing steps that surround any termination.

Conclusion

Dismissing a first French employee from abroad is a controlled sequence, not a single message. Invite the employee to a real preliminary meeting with five working days of notice and the outside-adviser paragraph, hear them through a mandated representative if you cannot travel, wait two working days, then notify precise, dated and provable reasons by registered letter with acknowledgment of receipt. Pay the notice or its compensation, deliver the employment certificate, the France Travail certificate and the final settlement receipt, and calculate severance from eight months of service at one quarter of a month per year, prorated to full months, applying the collective agreement wherever it is richer. Before the labour court, the letter sets the limits of the dispute, remaining doubt benefits the employee, and damages without real and serious cause sit within the Macron scale that the Cour de cassation has upheld. Prepared at the invitation stage and settled where possible at conciliation, a first dismissal stays a budgeted management step instead of becoming the dispute that defines your French venture.