France: Calculation of severance pay

Regions & Countries France
Areas of Law Employment
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Two decisions of the French Court of Cassation have considered the impact of variable remuneration when calculating legal severance pay.


According to two decisions of the French Court of Cassation variable remuneration must be taken into account when calculating the amount of  legal severance payment due on  dismissal if this is more favourable to the employee than standard severance payment calculated according to the employer's collective bargaining agreement.

In each case, the employers (both banks) had dismissed an employee (based on economic grounds in the one case, and on personal grounds in the other) and paid the standard severance payment. Both employees had requested the payment of a supplement based on the calculation of a legal severance payment  assessed to include variable remuneration (bonus in both cases).

The Court ruled in favour of the employees, holding that the calculation of legal severance pay  must take into account variable remuneration. The same calculation applies for damages in case of dismissal without real and serious cause.

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Philippe Danesi
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