OD FLASH | The specific end-of-contract compensation cannot be combined with the statutory or contractual severance pay.

Supreme Court, Civil Division, Social Chamber, April 2, 2025, No. 23-11.002

In this case, an employee brought a claim before the labor court seeking the reclassification of his fixed-term contract of use as a permanent contract and requested that his employer be ordered to pay various sums related to the performance and termination of the employment contract.

In this case, the company had entered into a collective agreement providing for a more favorable end-of-contract indemnity than that established by law. This indemnity was mainly based on the employee’s length of service and was payable, under certain seniority conditions (which were met in this instance), to employees hired under fixed-term contracts of use.

Challenging both the execution and termination of his employment contract, the employee requested the trial court to order the employer to pay him both a severance payment (as a financial consequence of reclassifying the terminated contract as a permanent employment contract) and the conventional end-of-collaboration indemnity negotiated within the company.

The Paris Court of Appeal, in a ruling dated November 24, 2022 (No. 20/02183), confirmed the first instance judgment on the reclassification of the employee’s contracts. On the other hand, the Court of Appeal, ruling that the severance pay and the contractual termination indemnity had the same cause, ordered the employee to reimburse the termination indemnity he had received for the termination of his fixed-term employment contract. The Paris Court of Appeal considered that these two payments, having the same cause, could not be combined. In reaching this conclusion, the Court of Appeal based its decision on the method of calculating the contractual severance pay, which was similar to that of the statutory severance pay.

The employee lodged an appeal against the ruling handed down by the Paris Court of Appeal. The employee claimed that the reason for the contractual severance pay, like the statutory severance pay provided for in the Labor Code in the event of termination of a fixed-term employment contract, is intended to compensate for the precariousness of the situation arising from the end of the fixed-term contract and that it does not have the same cause as severance pay, which is intended to compensate for the damage linked to the termination of the employment contract in the absence of fault on the part of the employee.

The French Supreme Court dismissed the appeal lodged by the employee. It first pointed out that, in the event of concurrent collective agreements, benefits having the same purpose or cause cannot, unless otherwise stipulated, be combined, and only the most favorable of them may be granted.

Furthermore, it emphasized that the end-of-employment compensation paid to the employee constituted, like severance pay, compensation for termination, the amount of which was calculated on the basis of seniority in the company. It concluded that, since they had the same cause, these two types of compensation could not be combined.

The Court of Cassation therefore ruled that the Paris Court of Appeal had correctly concluded that the employee must be ordered to reimburse his employer for the end-of-employment compensation he had received.