When Xavier Bertrand took the floor during the Council of Ministers on March 26, 2008, to present the labor market modernization bill, the then Minister of Labor doubtless had no idea of the immense success that the contractual rupture, one of the key measures of the text. Fifteen years after its entry into force, it is clear that this device, which allows an employee and his employer to separate amicably, has fully found its audience. In 2022, more than 500,000 procedures of this type have been concluded in France. A record that should have been broken by the end of the year.
Except that its almost continuous growth since its beginnings – with the exception of 2013 and 2020 – could be thwarted by the entry into force, this Friday, September 1, of a new social system provided for by the pension reform. To sign a conventional termination, the employer must now pay a social package corresponding to 30% of the compensation paid to the employee leaving his company, against 20% previously. At the same time, that of retirement will drop from 50% to 30%. With this harmonization, the government hopes to encourage companies to keep their senior employees as long as possible.
A tool designed for its flexibility
Contractual terminations therefore cost more than before. “This measure goes against the grain. It would have been relevant in a period of mass unemployment, because making it more expensive to part ways with an employee helps to protect him. But today we are in the process of switching to the full employment”, says Benoît Serre, vice-president of the National Association of Human Resources Directors (ANDRH). The government is indeed aiming for an unemployment rate of 5% in 2027 – against 7.1% currently – which would be synonymous with full employment.
When it was created in 2008, the conventional break had however been thought of as a flexibility tool. “It has changed the functioning of the labor market. In addition, this device has considerably calmed the breaches of employment contracts and has helped to reduce litigation”, assures the economist Bertrand Martinot, at the Institut Montaigne, former adviser office of Nicolas Sarkozy in 2007-2008. “We did not expect such a success,” says Michèle Bauer, labor lawyer. The use of this mode of breach of contract has however been diverted over the years. “This allows some employers to avoid economic dismissal, which is more expensive, more administratively cumbersome and which is accompanied by notice. This also limits the risk of disputes”, she continues.
New conflicts to come?
If the increase in the social package should not penalize large groups wishing to part with an employee, nothing is less certain for small and medium-sized businesses. “We are going to create new conflicts, with a risk of overloading the labor courts, predicts Benoît Serre of ANDRH. In the phase we are currently experiencing, it is a fairly protective tool for SMEs. Those who will have need to adapt their human resources may not be able to bear this additional cost”.
This measure could also prove to be penalizing for employees who wish to leave their company. Especially since, since April 18, abandonment of post is considered a resignation and therefore does not entitle you to unemployment benefits. To benefit from it, conventional termination must be preferred. Companies still have to agree to this. “Not everyone is inclined to accept it. Given the difficult context of recruitment, the negotiation will be complicated by this financial constraint”, estimates Nadine Huron, founder of the firm specializing in human resources NHA.
And what about the real effect of this new rule on the employment of seniors? “Generally speaking, most contractual terminations do not concern them,” recalls economist Camille Signoretto. “We should not think that this will solve the structural problem of unemployment among seniors, supports Benoît Serre. It would be a shame if we stopped at that.” The scoop may miss its target.