Reaching An Agreement With An Employee In France: What Are Your Options?

Published date02 June 2021
Subject MatterEmployment and HR, Litigation, Mediation & Arbitration, Contract of Employment, Employee Benefits & Compensation, Redundancy/Layoff, Employment Litigation/ Tribunals, Arbitration & Dispute Resolution
Law Firmlus Laboris
AuthorMr Gonzague Talvard (Capstan Avocats)

Settlement, conciliation and mediation are all options when settling a dispute with an employee in France, but what are the advantages of each method?

There are many considerations that may lead a company to look to conclude an agreement to end a dispute with an employee.

While agreeing on the key terms of the agreement is the most substantial phase of the negotiation process, formalising the agreed terms into a legal document is at least as important. There is no point in negotiating hard if the result of these negotiations is not faithfully recorded in a form guaranteeing both parties that mutually agreed commitments are fulfilled and ensuring the legal certainty expected, particularly by the employer, in return for the 'price' paid: that this agreement puts an end, once and for all, to all litigation.

Settlement: the most widely used model

Settlement is by far the most widely used framework for ending a dispute.

Article 2044 of the Civil Code defines it as:

'a contract [drawn up in writing] by which the parties, by mutual concessions, put an end to a dispute that has arisen, or prevent a dispute from arising'.

The scope of application of settlement is broad; it can relate to a dispute arising during the employment relationship, and therefore concerning the performance of the contract (harassment, discrimination, breach of the employer's safety obligations, etc.), as well as to a disagreement linked to the termination of the contract. a settlement may be concluded without the employee having first referred the matter to the courts; it is sufficient that a dispute exists and that it can be justified. It can also be concluded during the course of legal proceedings, at any stage of the procedure.

It was previously held that a settlement could only definitely resolve the points in dispute that justified its negotiation, but the Court of Cassation now accepts more widely that it may also entail the employee's definitive waiver of other elements relating to the contractual relationship, subject to appropriate drafting. The stakes for the employer are high, because having paid a settlement indemnity putting an end to a dispute over dismissal, it does not expect the employee to 'reappear' later, this time, for example, seeking to recover payment of overtime or variable remuneration or claiming compensation for a loss linked to allegedly faulty performance of the employment contract. However, only sufficiently precise wording is likely to provide this security...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT