Your French company hired its first employee, and the adventure is already turning difficult. The profile does not fit, the sales do not come, or the Paris project simply costs more than planned. From London, New York, Dubai or Singapore, the reflex is to act fast: announce the departure by email, pay an extra month or two, and move on. In France, that reflex is the most expensive mistake a foreign employer can make. Dismissal (licenciement) is a formal procedure where each step is timed by statute, the letter stating the reasons fixes the entire future dispute, and the slightest shortcut converts a clean separation into a labour court (conseil de prud’hommes) award. This guide explains how to dismiss your first employee lawfully while you live abroad, what the separation truly costs, and how the Paris labour court quantifies the risk if the employee challenges you. It continues our step-by-step guide to setting up a company in France as a foreign founder, from bank account to Kbis, VAT and first hire, and it assumes you already employ the worker under a permanent contract (CDI, contrat a duree indeterminee), the standard open-ended French employment contract.

French employment vocabulary matters here, so every acronym is explained the first time it appears: the CDI is the permanent contract, the CDD (contrat a duree determinee) is the fixed-term contract with its own strict rules, the conseil de prud’hommes is the labour court composed of employer and employee representatives, the DREETS (Direction regionale de l’economie, de l’emploi, du travail et des solidarites) is the regional labour administration, France Travail is the public employment service formerly known as Pole emploi, the DSN (declaration sociale nominative) is the monthly payroll return, and the Kbis is the company’s official registration certificate issued by the greffe, the registry of the commercial court. Keep this glossary in mind: the procedure below uses these institutions at every stage.

I. Dismissing lawfully from abroad: the procedure you must follow to the letter

French law does not let an employer end a permanent contract by simple notice. For a personal dismissal (licenciement pour motif personnel), the Labour Code imposes a three-step choreography: invite the employee to a preliminary meeting, hold that meeting, then notify the dismissal by registered letter stating the reasons. Miss one beat, shorten one time limit, or state the reasons orally instead of in the letter, and the dismissal becomes challengeable even if your business reason was perfectly legitimate. Distance makes each step harder, but none of them can be skipped because you live abroad.

A. Invite, meet, notify: the preliminary meeting and the dismissal letter

Everything starts with a written invitation. The statute provides that “L’employeur qui envisage de licencier un salarié le convoque, avant toute décision, à un entretien préalable.” (Article L1232-2 of the Labour Code). In plain terms, before taking any decision, the employer who considers dismissing an employee must invite that employee to a preliminary meeting (entretien prealable). The invitation must be sent by registered letter or handed over in person against a signed receipt, and it must state its purpose. The same article sets the first mandatory time limit: “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). The meeting cannot take place less than five full working days (jours ouvrables, Monday to Saturday excluding public holidays) after the registered letter is presented at the employee’s home or handed over directly.

Two practical consequences follow for a founder living abroad. First, the five-day clock runs from presentation of the letter, not from the day the employee actually collects it at the post office. The Court of Cassation confirmed this reading in a case where an invitation sent on 10 January 2018 had been presented without success on 12 January and collected only on 22 January, while the meeting was held on 24 January: the lower court had found the time limit breached, but the social chamber quashed that finding, holding that “le délai de cinq jours avait commencé à courir le 13 janvier 2018, le jour suivant la présentation de la lettre recommandée, en sorte qu’à la date de l’entretien fixé au 24 janvier suivant, la salariée avait bénéficié d’un délai de cinq jours ouvrables pleins” (Court of Cassation, social chamber, 6 September 2023, No. 22-11.661). Keep the proof of presentation, the avis de passage or the postal tracking record, because that document is what proves your five days. Second, if you cannot fly to France for the meeting, mandate in writing a person established in France to conduct it on the company’s behalf, and keep that written mandate in the dismissal file. The meeting itself is the employee’s opportunity to be heard and to be assisted by a staff member or, where the company has no staff representatives, by an outside adviser from the official departmental list; you cannot hold it by a quick phone call and treat the formality as done.

The second step is the dismissal letter itself, and here the timing and the content are equally rigid. The statute 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 of the Labour Code). The dismissal must be notified by registered letter with acknowledgement of receipt (lettre recommandee avec avis de reception, universally known as LRAR). That same article adds the second mandatory time limit: “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). The letter cannot be posted less than two full working days after the scheduled date of the preliminary meeting, even if the employee failed to attend. From abroad, send the LRAR through the online registered-letter service of the French postal operator or instruct your representative in France to post it, and diary both dates with their postal receipts: presentation date of the invitation, meeting date, posting date of the dismissal letter.

The content of the letter matters even more than its timing. The letter must state the precise reasons for the dismissal, and only the reasons written in that letter can be discussed before the labour court later. The English-language page of the French public service on the personal dismissal procedure summarises the same sequence of invitation, meeting and reasoned notification for employees and employers alike. A vague letter mentioning a loss of confidence or a general reorganisation, without facts, dates and examples, leaves the judge nothing to verify. Write the letter as if the labour court will read it line by line, because that is exactly what happens: facts first, then the conclusion that those facts make continued employment impossible or justify the decision.

B. State a real and serious cause: personal grounds or documented economic grounds

The foundation of every dismissal for personal reasons is a single sentence of the Labour Code: “Tout licenciement pour motif personnel est motivé dans les conditions définies par le présent chapitre. Il est justifié par une cause réelle et sérieuse.” (Article L1232-1 of the Labour Code). Every dismissal on personal grounds must rest on a real and serious cause (cause reelle et serieuse). Real means the facts exist, are verifiable and are stated precisely in the letter; serious means they are grave enough to make dismissal necessary rather than a warning or another sanction. Poor performance can qualify, but only if it is documented: objectives set in writing in advance, appraisals recording the shortfall, warnings sent before the dismissal, support offered and still no improvement. Misconduct qualifies where the file contains dated facts, witness statements and prior proportionate sanctions. An email from abroad saying the employee is simply not the right fit, with no paper trail, is the textbook example of a dismissal that collapses before the labour court.

For many foreign founders the true reason is economic rather than personal: the French activity loses money, the funding round failed, or the position itself must disappear. Economic dismissal (licenciement pour motif economique) is a separate legal regime with heavier obligations, and the definition is demanding. The statute provides that “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” (Article L1233-3 of the Labour Code). The dismissal must result from the elimination or transformation of the job, or from a change to an essential term of the contract that the employee refused, and it must be justified by economic difficulties, technological change, a reorganisation needed to safeguard competitiveness, or the company’s judicial winding-up. For a young French subsidiary with fewer than eleven employees, the difficulty threshold is precisely calibrated: a significant fall in orders or turnover is established where the decline, compared with the same period of the previous year, lasts at least one quarter (un trimestre) for a company with fewer than eleven employees (Article L1233-3 of the Labour Code). Keep the quarterly accounts, the order book and the bank statements that prove that quarter, because the judge will ask for them.

Two traps specific to foreign groups deserve emphasis. First, where the French company belongs to an international group, the economic difficulties are assessed at the level of the sector of activity shared by the group’s companies located in France and, in some configurations, within the wider group, not solely on the Paris subsidiary’s own losses; closing a profitable French position to move the work to the head office abroad is not, by itself, an economic justification. Second, even a company with a single employee must attempt redeployment (reclassement): before dismissing on economic grounds, the employer must offer in writing any available position in the company or, with the employee’s consent, in group companies whose organisation allows staff permutation, even abroad. Document each offer and each refusal in writing. Where the economic route looks too heavy for a first hire, many foreign employers prefer the negotiated route described in Part II: a termination by mutual agreement (rupture conventionnelle), which avoids the cause debate entirely but requires the employee’s genuine consent and an administrative approval.

II. What the separation costs and what happens if the employee sues

A lawful procedure does not mean a free separation. French law guarantees the dismissed employee a statutory severance payment, paid holidays and, usually, a notice period worked or paid, and the labour court prices every procedural or substantive defect on a statutory scale. Budget the full cost before sending the invitation letter, because the amounts below apply whether you live in Paris or on another continent.

A. Count the severance, the notice and the holidays: the statutory arithmetic

The cornerstone is the statutory severance pay (indemnite legale de licenciement). The statute 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 L1234-9 of the Labour Code). Any employee on a permanent contract with at least eight months of continuous service is entitled to severance, except in cases of serious or gross misconduct (faute grave ou lourde). The minimum amount is fixed by regulation: “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 of the Labour Code). In other words, one quarter of a month’s pay per year of service for the first ten years, then one third per year beyond ten. The calculation runs per year of service counting whole months beyond full years: “En cas d’année incomplète, l’indemnité est calculée proportionnellement au nombre de mois complets.” (Article R1234-1 of the Labour Code). For a first employee with, say, fourteen months of service and a gross monthly reference salary of 3,500 euros, the statutory minimum is roughly one quarter of 3,500 euros for the full year plus a proportional share for the two complete extra months, around 1,020 euros. Collective bargaining agreements frequently provide higher contractual severance, so always compare the agreement applicable to your sector (convention collective) with the statutory floor and pay whichever is higher.

On top of severance, three further items complete the final settlement (solde de tout compte). First, the notice period (preavis): unless the dismissal is for serious misconduct, the employee is entitled to a notice period whose length depends on seniority and the applicable collective agreement, typically one to three months for a first hire; if you do not want the employee to work it, you pay the corresponding salary as notice compensation instead. Second, the accrued paid holidays (conges payes): French employees accrue two and a half working days of paid holiday per month worked, and any untaken balance is paid out as holiday compensation (indemnite compensatrice de conges payes) with the final settlement. Third, the prorated bonuses, the thirteenth month where the contract or agreement provides one, and the final payslip with the DSN return updated to record the departure. From abroad, instruct your French payroll provider (expert-comptable or payroll firm) before the dismissal letter goes out: the settlement must be ready at the end of the contract, and late or missing documents, the work certificate (attestation France Travail, formerly attestation Pole emploi) and the final settlement receipt, generate their own penalties.

Where the relationship allows it, the negotiated termination by mutual agreement (rupture conventionnelle) often costs less in conflict even if it pays slightly more in cash. The statute states its core principle: “La rupture conventionnelle, exclusive du licenciement ou de la démission, ne peut être imposée par l’une ou l’autre des parties.” (Article L1237-11 of the Labour Code). Neither side can impose it; it results from an agreement signed by both parties after at least one meeting, with a fifteen-calendar-day withdrawal period (delai de retractation) for each side. The agreement must then be approved by the labour administration: “A l’issue du délai de rétractation, la partie la plus diligente adresse une demande d’homologation à l’autorité administrative, avec un exemplaire de la convention de rupture.” and “L’autorité administrative dispose d’un délai d’instruction de quinze jours ouvrables, à compter de la réception de la demande” (Article L1237-14 of the Labour Code). For a Paris company, that approval comes from the DREETS of Ile-de-France, the Paris region. The agreed compensation cannot be lower than the statutory severance calculated above, and in practice the employee will ask for a premium in exchange for giving up any future claim. The procedure takes about five to six weeks from the first meeting to the earliest possible departure date, so start it early if the separation calendar matters to your business.

B. Face the labour court in Paris: the Macron scale, the twelve-month clock and the settlement alternative

If the employee considers the dismissal unfair, the case goes to the conseil de prud’hommes, the French labour court, in practice the Paris labour court where your employee works and where the company is registered. The procedure begins with a conciliation hearing where the judges try to settle the case, then moves to a full hearing if conciliation fails. For a foreign employer, two features of this litigation matter most: the statutory scale that caps the price of an unfair dismissal, and the short deadline for the employee to sue, which is also the deadline after which your file can finally be closed.

Since the 2017 ordinances, compensation for dismissal without real and serious cause follows a mandatory scale, the so-called Macron scale (bareme Macron). The statute provides that where reinstatement is refused by either side, “le juge octroie au salarié une indemnité à la charge de l’employeur, dont le montant est compris entre les montants minimaux et maximaux fixés dans le tableau ci-dessous.” (Article L1235-3 of the Labour Code). For a first employee with low seniority, the figures are modest but real: with one complete year of service, the award ranges from one to two months of gross salary; with two complete years, from three to three and a half months. The Court of Cassation polices this scale strictly. In a 2025 ruling, an appeal court had awarded 28,400 euros, above the scale maximum, by relying on the employee’s age, finances and lost benefits; the social chamber quashed that part of the ruling, holding that “il lui appartenait seulement d’apprécier la situation concrète du salarié pour déterminer le montant de l’indemnité due entre les montants minimaux et maximaux déterminés par l’article L. 1235-3 du code du travail” (Court of Cassation, social chamber, 9 April 2025, No. 24-13.958), and it set the award itself at 24,794 euros within the scale. For your budgeting, this means the worst case for an unfair dismissal of a short-seniority first hire is quantifiable in advance: a few months of salary, plus the severance and notice already owed, plus a partial reimbursement of unemployment benefits to France Travail ordered by the court.

Procedure defects have their own smaller price. In the Mango case cited in Part I, the appeal court had added compensation for a procedural irregularity “correspondant à un mois de salaire” to a global award of 37,100 euros for a void dismissal, and the Court of Cassation deducted that one month, fixing the award at 35,001.23 euros, because the five-day period had in fact been respected (Court of Cassation, social chamber, 6 September 2023, No. 22-11.661). An irregular procedure alone, without an unfair substantive cause, costs at most about one month’s salary, but it is always added on top of everything else. The lesson for a founder managing the file from abroad is simple: calendar discipline is the cheapest legal insurance available.

The employee does not have forever to challenge you. The statute provides that “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). Any claim concerning the termination of the employment contract is time-barred twelve months after notification of the rupture, which for a dismissal means twelve months after the employee receives the dismissal letter. Keep the LRAR acknowledgement and the postal records for at least that long, and ask your counsel to confirm in writing once the twelve months have expired without a claim. The same twelve-month logic applies to challenges against a negotiated termination, where the statute requires the court action to be brought within twelve months of the approval of the agreement, failing which it is inadmissible (Article L1237-14 of the Labour Code).

For a Paris-based first hire, add two local specifics to your file. First, the competent labour court is the conseil de prud’hommes of the place of work or of the company’s registered office, so a Paris employee means proceedings in Paris, in French, with documents and witness statements expected in French; budget for sworn translation of your English-language evidence and for a representative with authority to appear at the conciliation and hearing dates. Second, the DREETS of Ile-de-France handles the approval of negotiated terminations for Paris companies, and its fifteen-working-day review period runs from receipt of a complete file, so an incomplete form restarts the clock. If a settlement discussion opens during the conciliation phase, compare any proposal against the scale figures above: paying within or slightly above the scale to close the file immediately is often cheaper than funding a full hearing from another continent, and the conciliation agreement, once signed and approved, ends the dispute.

Conclusion

Dismissing your first French employee from abroad is entirely possible, but it rewards method and punishes improvisation. Send a proper invitation and respect the five working days, hold a genuine preliminary meeting even through a mandated representative, then notify the dismissal by registered letter stating precise, documented reasons that amount to a real and serious cause or to proven economic difficulties. Budget the statutory severance from eight months of service, the notice, the holidays and the payroll returns, and consider the negotiated termination where the employee might consent. If the case reaches the Paris labour court, the Macron scale makes the exposure quantifiable and the twelve-month limitation closes the file, provided your postal records prove each date. Run this sequence once, cleanly, and your French company keeps its Kbis, its bank account and its reputation intact for the next hire.