You hired your first employee in France with enthusiasm. The commercial court clerk (greffe) had issued your Kbis, the French company identity certificate that proves your SAS or SARL exists, the Single Desk (Guichet unique managed by the INPI, the National Industrial Property Institute) had processed the hiring declaration (DPAE, the pre-hiring declaration sent to URSSAF, the network of agencies that collect employer social contributions), and your Paris, Lyon or Bordeaux accountant set up the monthly social return (DSN, the nominative social declaration that reports payroll and contributions). Six or ten months later the picture has changed: missed deadlines, tense emails, clients complaining, and a salary that leaves your account on the last working day of every month while the work does not follow. You live in London, New York, Tel Aviv, Dubai or Singapore, you cannot attend a meeting in France next week, and you wonder whether you can simply stop the contract, what a dismissal letter must say, how much an agreed exit costs, and what happens if the employee goes to the labour court (conseil de prud’hommes, the elected court that hears employment disputes).<\/p>\n
This guide answers those questions for foreign founders and foreign groups doing business in France, entirely under French employment law. France does not allow dismissal at will: every termination of an open-ended contract (CDI, contrat \u00e0 dur\u00e9e ind\u00e9termin\u00e9e) needs a real and serious cause, a strict procedure, a notice period and final documents, and the employee has twelve months to challenge the dismissal before the labour court. Next to dismissal sits a widely used alternative, the agreed termination (rupture conventionnelle), a joint agreement that ends the contract with a negotiated payment and an administrative approval. Both routes can be run from abroad through clear letters, a local counsel and rigorous paperwork, and both have a predictable price if you prepare them properly. If you are still planning the hire itself, read our complete guide to setting up a company in France as a foreign founder<\/a> first, then come back here with your employment contract, your pay slips and your timeline in hand. Overtime and working-time disputes that often precede a separation are covered in our companion piece on overtime, the 35-hour week and proof before the labour court<\/a>, and the hidden health-and-safety duties that survive any exit are explained in our guide to hidden duties, medical follow-up and the single risk-assessment document<\/a>.<\/p>\n Dismissal for personal reasons (licenciement pour motif personnel) is the ordinary route when the work, the conduct or the results are the problem. Poor performance, repeated errors, refusal of reasonable instructions, loss of trust documented by concrete facts: all of these can support a dismissal, but only if the cause is real, serious and proven by the employer. Economic dismissal (licenciement pour motif \u00e9conomique) follows different rules with redeployment duties and is rarely suited to a one-employee company owned from abroad, so this article focuses on the personal dismissal and on the agreed exit below. The first discipline is procedural and it starts before any decision is taken. The Code states: “L’employeur qui envisage de licencier un salari\u00e9 le convoque, avant toute d\u00e9cision, \u00e0 un entretien pr\u00e9alable” (article L. 1232-2 of the Labour Code<\/a>). The invitation letter must state its purpose, it is sent by registered letter or handed over in person against receipt, and the meeting cannot take place less than five working days after presentation of the letter. From abroad, the practical setup is simple: your French counsel or your authorised manager in France signs and sends the invitation, the employee attends the meeting with a staff representative or an outside adviser if they wish, and you join by telephone or video where the employee accepts it, with a written record kept in the file. Skipping this meeting, holding it too early or sending a vague invitation letter are classic grounds for a procedural finding against the employer, even where the underlying reason was genuine.<\/p>\n The second discipline is the dismissal letter itself, and it carries the whole case. The Code provides: “Lorsque l’employeur d\u00e9cide de licencier un salari\u00e9, il lui notifie sa d\u00e9cision par lettre recommand\u00e9e avec avis de r\u00e9ception” (article L. 1232-6 of the Labour Code<\/a>). The letter must state the grounds relied upon, it cannot be sent less than two working days after the scheduled date of the preliminary meeting, and only the grounds written in that letter count before the court. The Cour de cassation, the supreme court for employment matters, applies this requirement with rigour but also with common sense: “si la lettre de licenciement doit \u00e9noncer des motifs pr\u00e9cis et mat\u00e9riellement v\u00e9rifiables, la datation des faits invoqu\u00e9s n’est pas n\u00e9cessaire et l’employeur est en droit, en cas de contestation, d’invoquer toutes les circonstances de fait qui permettent de justifier ces motifs” (Cass. soc., 6 May 2025, appeal no. 23-19.214<\/a>). In plain terms for a foreign employer: describe dated or datable facts, tasks, figures, warnings and incidents that can be checked and discussed, avoid general remarks about attitude or trust with no illustration, and keep every exhibit that backs each sentence, because the judge will compare the letter with the file. Government guidance on dismissal procedure confirms the same sequence of invitation, meeting, notification and notice on service-public.fr, dismissal of an employee on an open-ended contract<\/a>, and our firm drafts these letters in French originals from day one so that no translation dispute arises later.<\/p>\n Once the letter is sent, three financial and administrative consequences start immediately. First, the notice period (pr\u00e9avis): unless the dismissal is for serious misconduct (faute grave) that prevents the employee staying even during notice, the contract continues during notice and the salary remains due, with the length set by the employment contract, the applicable collective agreement (convention collective) or local custom. Many foreign founders discover at this stage that the sector agreement adds one to three months of salary after the letter; checking the agreement named on the first pay slip before signing the letter saves painful corrections later. Second, the severance floor (indemnit\u00e9 l\u00e9gale de licenciement): the Code provides that “Le salari\u00e9 titulaire d’un contrat de travail \u00e0 dur\u00e9e ind\u00e9termin\u00e9e, licenci\u00e9 alors qu’il compte 8 mois d’anciennet\u00e9 ininterrompus au service du m\u00eame employeur, a droit, sauf en cas de faute grave, \u00e0 une indemnit\u00e9 de licenciement” (article L. 1234-9 of the Labour Code<\/a>). The regulatory formula then sets the minimum: “L’indemnit\u00e9 de licenciement ne peut \u00eatre inf\u00e9rieure aux montants suivants : 1\u00b0 Un quart de mois de salaire par ann\u00e9e d’anciennet\u00e9 pour les ann\u00e9es jusqu’\u00e0 dix ans ;” (article R. 1234-2 of the Labour Code<\/a>), with one third of a month per year beyond ten years, calculated on the best average of the last three or twelve months including bonuses pro rata. With eleven months of service the legal minimum is therefore modest but it is due, it appears on the final payslip, and forgetting it guarantees a claim.<\/p>\n Third, the exit paperwork must be delivered at once and from abroad this is where files most often fail. The employer issues a work certificate, and the Code states: “A l’expiration du contrat de travail, l’employeur d\u00e9livre au salari\u00e9 un certificat dont le contenu est d\u00e9termin\u00e9 par voie r\u00e9glementaire” (article L. 1234-19 of the Labour Code<\/a>). Alongside it come the final payslip with the balance of any kind (solde de tout compte, the itemised receipt of all sums paid on exit), the certificate for unused paid leave compensation (indemnit\u00e9 compensatrice de cong\u00e9s pay\u00e9s), and above all the employment attestation for benefit rights: “L’employeur d\u00e9livre au salari\u00e9, au moment de l’expiration ou de la rupture du contrat de travail, les attestations et justifications qui lui permettent d’exercer ses droits aux prestations mentionn\u00e9es \u00e0 l’article L. 5421-2” (article R. 1234-9 of the Labour Code<\/a>). That attestation is transmitted without delay to France Travail (the public employment operator, formerly P\u00f4le emploi, that pays unemployment benefits) and handed to the employee, with electronic filing mandatory for employers of eleven or more staff. A foreign director who leaves this task to an unanswered mailbox at the registered office (si\u00e8ge social) exposes the company to daily penalties and to a presumption of bad faith; instruct your accountant to file the DSN exit codes the day the contract ends and to send the documents by tracked delivery plus email.<\/p>\n The agreed termination (rupture conventionnelle) ends an open-ended contract by joint agreement instead of a unilateral dismissal, and for a first hire managed from abroad it is very often the calmer and cheaper path. The Code defines it in one sentence: “L’employeur et le salari\u00e9 peuvent convenir en commun des conditions de la rupture du contrat de travail qui les lie” (article L. 1237-11 of the Labour Code<\/a>). Neither side can impose it, the agreement is signed by both parties, and the statute protects the consent of each side through a supervised timetable. In practice the parties hold at least one meeting, often two, to discuss the end date, the payment and the handover; the employee may be assisted exactly as in a dismissal meeting; the agreement must grant at least the legal severance amount described above, with most first-hire settlements adding a negotiated supplement (indemnit\u00e9 supra-l\u00e9gale) of one to three months to secure a clean and fast departure. Each side then has fifteen calendar days to withdraw (d\u00e9lai de r\u00e9tractation), and only after that period does the file go for approval (homologation) to the regional labour authority (DREETS, the regional directorate for employment, labour and solidarities), which has twenty-one working days to approve or refuse; silence means approval. The contract ends on the agreed date, never before the day after approval. The official English-language procedure is summarised on service-public.fr, agreed termination of an open-ended contract<\/a>.<\/p>\n From London or New York the agreed route has three concrete advantages. It removes the burden of proving a real and serious cause, because no cause needs to be stated or defended; it shortens the conflict window, because the employee signs the amount and the date instead of receiving them; and it produces an approval stamp from the administration that labour courts respect. The price is consent discipline: the agreement must be genuinely voluntary, the payment cannot sit below the legal floor, and the withdrawal and approval periods cannot be shortened by contract. The Cour de cassation has drawn the line clearly in a case where an employee sought annulment by invoking a difficult context: “en l’absence de vice du consentement, l’existence de faits de harc\u00e8lement moral n’affecte pas en elle-m\u00eame la validit\u00e9 de la convention de rupture intervenue en application de l’article L. 1237-11 du code du travail” (Cass. soc., 23 January 2019, appeal no. 17-21.550<\/a>). For a foreign employer the lesson is direct: never combine pressure, threats about a coming dismissal or a sudden bonus cut with an agreed-termination proposal, hold the meetings on separate days, let the employee take advice, document each step in writing, and file the online approval request with the exact payment computation attached. A refusal of approval, which happens when the payment is below the floor or the form is incomplete, simply sends the parties back to negotiation or to the dismissal track; it creates no dismissal by itself.<\/p>\n Foreign shareholders consistently underestimate the exit ticket because they convert a monthly salary into a handshake. French law counts in layers and each layer must appear in the file. The base layer is salary through the notice period, plus the cash value of accrued but untaken paid leave (France grants a minimum of two and a half working days per month, and the balance is paid on exit), plus any pro rata bonus, overtime recall or expense balance documented in the payroll. The second layer is the severance computed above from article L. 1234-9 and article R. 1234-2, increased by any higher contractual or collective-agreement formula, which many sector agreements provide. The third layer, specific to the agreed termination, is the negotiated supplement: it is taxable and subject to contributions under its own rules, it must be distinguished on the payslip from the legal minimum, and it buys what the dismissal cannot buy, namely a signed agreement on the principle of departure. The fourth layer, often forgotten by companies with no French office, is the handover and restitution record: computer, badge, keys, client files, confidentiality reminder and, where the contract contains one, the non-compete clause (clause de non-concurrence) with its monthly financial counterpart, which is due only if the employer maintains the clause in writing at exit instead of releasing it. Put these four layers into a one-page settlement table attached to the letter or the agreement, have the accountant validate the figures, and the departure discussion changes tone immediately.<\/p>\n Above these contractual layers sits the litigation risk that every foreign employer must price before choosing between dismissal and agreement: the compensation for dismissal without real and serious cause. The Code frames it as follows: “Si le licenciement d’un salari\u00e9 survient pour une cause qui n’est pas r\u00e9elle et s\u00e9rieuse, le juge peut proposer la r\u00e9int\u00e9gration du salari\u00e9 dans l’entreprise, avec maintien de ses avantages acquis” (article L. 1235-3 of the Labour Code<\/a>). Where either side refuses reinstatement, the judge awards compensation within a binding scale, the Macron scale (bar\u00e8me Macron), running from one month for zero full years of service up to twenty months beyond thirty years, with a reduced floor in companies that habitually employ fewer than eleven staff. For a first hire with under one year of service the ceiling is one to two months, which keeps the exposure of a small foreign-owned company measurable, but costs, reimbursement of unemployment benefits and management time sit on top. The Cour de cassation has closed the main doctrinal debate on this scale: “Il en r\u00e9sulte 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 pr\u00e9cit\u00e9e” (Cass. soc., 11 May 2022, appeal no. 21-14.490<\/a>), meaning the scale applies as written and judges do not set it aside case by case for ordinary unfair dismissal. The only cases that escape the scale are void dismissals listed by statute, such as violations of a fundamental liberty, moral or sexual harassment findings, discrimination or protected-status breaches, where the floor rises to six months. A separation memo that states the seniority, the headcount, the applicable scale bracket and the void-case check is the document that lets a shareholder in another country decide rationally between a dismissal with a one-month risk and an agreement with a two-month supplement.<\/p>\nI. End the contract of your first French employee lawfully while you live abroad<\/h2>\n
A. How do you dismiss your first employee without creating an unfair-dismissal case?<\/h3>\n
B. When is the agreed termination the safer deal for a foreign employer?<\/h3>\n
II. Price the exit correctly and survive a labour court claim filed from France<\/h2>\n
A. What does the exit really cost: notice, severance, leave and settlement?<\/h3>\n
B. How do you defend a labour court claim from abroad within the twelve-month deadline?<\/h3>\n