Employment termination in Reunion, as a French overseas department, is governed primarily by the French Labour Code, adapted with some local specificities. Employers must navigate a structured legal framework that dictates the grounds for dismissal, required procedures, notice periods, and potential severance entitlements. Compliance with these regulations is crucial to avoid legal challenges and potential penalties.
Understanding the nuances of these requirements is essential for employers operating in Reunion, whether they are terminating an employment contract for personal reasons related to the employee or for economic reasons impacting the business. Adhering to the correct process ensures fairness and legal validity in the termination process.
Notice Period Requirements
The required notice period for termination in Reunion depends on the employee's category and length of service with the company. These periods are generally defined by the Labour Code, collective bargaining agreements (CBAs), or the individual employment contract, with the most favorable term for the employee applying.
Minimum notice periods based on length of service for employees (excluding specific categories like senior managers or those covered by specific CBAs) are typically:
| Length of Service | Minimum Notice Period |
|---|---|
| Less than 6 months | Determined by law/CBA |
| 6 months to less than 2 years | 1 month |
| 2 years or more | 2 months |
Specific rules may apply to probationary periods, fixed-term contracts (CDD), and specific professional categories. During the notice period, the employee is generally entitled to time off to seek new employment.
Severance Pay Calculations and Entitlements
Employees in Reunion who are terminated (except for gross misconduct or serious misconduct, depending on the specific circumstances and CBA) are typically entitled to severance pay (indemnité de licenciement). This entitlement usually applies after a minimum length of service, commonly set at 8 months of uninterrupted service.
The calculation of severance pay is based on the employee's salary and length of service. The legal minimum severance pay is calculated as:
- 1/4 of a month's salary per year of service for the first 10 years.
- 1/3 of a month's salary per year of service for years beyond 10 years.
The reference salary for calculation is usually the higher of either:
- The average monthly salary over the last 12 months preceding the notification of termination.
- The average monthly salary over the last 3 months preceding the notification of termination (in this case, any bonuses or exceptional payments received during this period are prorated over the year).
Collective bargaining agreements often provide for more favorable severance pay calculations, which would supersede the legal minimum.
Grounds for Termination
Termination of an employment contract in Reunion must be based on a valid and real cause. Grounds for termination can be broadly categorized as:
-
Termination for Personal Reasons (Cause Réelle et Sérieuse): This relates to the employee's conduct or ability to perform their job.
- Misconduct (Faute): This can range from simple misconduct (faute simple), which is a valid ground for dismissal but does not necessarily preclude severance pay or notice, to serious misconduct (faute grave) or gross misconduct (faute lourde). Serious or gross misconduct typically justifies immediate dismissal without notice or severance pay, provided the correct procedure is followed. Examples include insubordination, repeated lateness, theft, or harassment.
- Insufficient Performance or Professional Inaptitude: The employee is unable to perform their duties correctly despite adequate training and support.
- Other Personal Reasons: Such as loss of driving license essential for the job, provided it is not due to a work-related accident.
-
Termination for Economic Reasons (Licenciement Économique): This is based on difficulties faced by the company, unrelated to the individual employee's conduct. Grounds include:
- Economic difficulties (e.g., significant decrease in turnover, operating losses).
- Technological changes.
- Cessation of the company's activity.
- Reorganization necessary to safeguard competitiveness.
Specific procedures and obligations apply to economic dismissals, particularly concerning collective redundancies.
Procedural Requirements for Lawful Termination
Strict procedural steps must be followed for a termination to be considered lawful in Reunion. Failure to adhere to these steps can result in the dismissal being deemed unfair, even if the grounds for termination were valid. The general procedure for termination for personal reasons includes:
- Convocation to a Preliminary Interview: The employer must send a registered letter with acknowledgment of receipt (or hand-deliver with a signed receipt) inviting the employee to a preliminary interview. This letter must state the purpose of the interview (considering potential termination), the date, time, and place of the interview, and inform the employee of their right to be assisted by a person of their choice (either a colleague or an external advisor listed by the authorities). A minimum timeframe must be respected between receiving the letter and the interview date (typically 5 working days).
- Preliminary Interview: During the interview, the employer must explain the reasons for considering termination and hear the employee's explanations. No decision should be announced during this meeting.
- Notification of Termination: If the employer decides to proceed with termination, they must send a registered letter with acknowledgment of receipt notifying the employee of the decision. This letter must clearly state the precise and objective reasons for the termination. A minimum timeframe must be respected between the preliminary interview and sending the notification letter (typically 2 working days).
- Execution of Notice Period: The employment contract ends after the notice period has been served, unless the employee is exempted from working it (in which case, notice pay is usually due).
- Issuance of Final Documents: Upon the employee's departure, the employer must provide several documents, including the work certificate (certificat de travail), the final pay slip (solde de tout compte), and the certificate for unemployment benefits (attestation Pôle emploi).
Common pitfalls include insufficient detail in the termination letter, failure to respect timelines, or not properly informing the employee of their right to assistance during the interview.
Employee Protections Against Wrongful Dismissal
Employees in Reunion are protected against wrongful or unfair dismissal. A dismissal can be deemed unfair if:
- It is based on grounds that are not real and serious.
- The correct legal procedure was not followed.
- It is discriminatory (e.g., based on origin, gender, age, union activity, health status).
- It is related to exercising a protected right (e.g., striking).
If an employee contests their dismissal, they can bring a case before the Labour Court (Conseil de Prud'hommes). If the court finds the dismissal to be without real and serious cause or procedurally unfair, it may order the employer to pay damages to the employee. The amount of damages depends on factors such as the employee's length of service, age, and difficulty in finding new employment. In certain cases, particularly for protected employees (like employee representatives), reinstatement may be ordered.
