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How can you negotiate your dismissal out of court and prepare to start your own business?

Also known as an amicable termination, the mutually agreed termination is a procedure that falls between resignation and dismissal. It involves negotiating a mutually agreed termination of a permanent contract (CDI - contrat à durée indéterminée) between the employee and their employer. If you wish to leave your job via a mutually agreed termination of your employment contract in order to create your own company, you need to prepare for your departure. SeDomicilier.fr explains the procedures you need to know for an amicable termination.
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Updated September 1, 2023
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How to request a mutual termination?

You can negotiate a mutual termination of your employment contract with your employer without having to give a specific reason. However, you can highlight the existence of your business creation project.

There are definitely advantages to being upfront with your employer to successfully negotiate your contract termination. Prepare strong arguments to tip the scales in your favor during your amicable dismissal. If you're an employee valued by the company staff and want to dedicate yourself to a project that seems close to your heart, your employer might be receptive to it.

Your employer and you can then meet for one or more interviews in order to find an agreement on the principle of an amicable dismissal against payment of a severance indemnity. Get assistance from another member of the company's staff or from an advisor if necessary to negotiate the terms of your departure.

Once you've agreed on your departure from the company, fill out a mutual termination agreement. The main thing to specify in this agreement is the amount of the severance pay. This amount must not be less than what you would have received if you had been made redundant in a standard layoff.
 

What business start-up assistance is available following an amicable dismissal?

As soon as the CDI termination agreement is concluded, you are officially unemployed and can benefit from the right to unemployment benefits. Amicable termination offers you some advantages, in particular that of benefiting from the payment of unemployment benefits under certain conditions. These benefits are called return-to-work allowances (ARE).

To take advantage of these benefits, you need to register with Pôle Emploi (the French job center). The length of compensation can vary depending on the periods of employment following the end of your employment contract.

You can also benefit from the Aid for Business Creation or Takeover (ACRE), which is a partial exemption from social security contributions. This exemption is valid for a maximum period of one year.

You can also apply for the New Support for Business Creation and Takeover (Nacre), which is a program that extends over a minimum period of three years. It is open to any employee who has chosen to proceed with a conventional termination of their employment contract. It offers assistance with setting up a business as well as financial assistance.

  • The amount of unemployment benefits is calculated based on the gross salary received by the employee during the 12 months prior to the termination of the employment contract.
  • The maximum duration of compensation is 24 months, but it may be reduced depending on the employee's age and length of affiliation to the unemployment insurance scheme.

 

How to properly prepare for your business creation?

Start by preparing your business creation file with a business plan tailored to your skills and experience. If you've never created or participated in the creation of a company before, your Pôle Emploi advisor may suggest training specifically for entrepreneurs. This training will teach you about the administrative and legal formalities, some basic accounting principles, and the procedure for paying your company's taxes.

Put together a good project team with people who have the skills needed to implement the company's project. When it comes to creating an SCI (société civile immobilière) or any other type of company, the success of this project depends on the team put together for it. You must also have a very well-established financing plan to see your business creation project come to fruition. When these different points are well prepared, you can move on to the concrete creation of the company.

Written by our expert Editorial staff
June 20, 2023

What restrictions might there be on starting a business before an amicable dismissal?

You can create your business before an amicable dismissal. However, your procedure must comply with certain provisions of the law and the employment contract.

  • The exclusivity clause

    1. The exclusivity clause

    The exclusivity clause refers to Article 1222-1 of the French Labour Code, which prohibits employees from engaging in any other professional activity. However, this doesn't apply to employees starting a business for a period of one year. At the end of this period, they must either terminate their business or initiate the conventional termination procedure of their employment contract.

  • The non-competition clause

    2. The non-compete clause

    When the employment contract includes a non-compete clause, the employee must not be at fault by creating a company that carries out a competing activity or by working for competitors. This clause is valid for a specified period and geographical area, even after the employee leaves their job.

  • The duty of loyalty

    3. The obligation of loyalty

    When an employee plans to start their own business, they must commit to being loyal to their employer. In practice, they must execute their employment contract in good faith and do nothing that could harm the company's business.

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Frequently asked questions

Starting a business: What other solutions are there?
Chevron
You can request leave from your employer to dedicate yourself to creating your business. With this solution, you can easily return to your job in the company if your project does not go well. You can also switch to part-time on your employment contract. You can both work on your business creation project and be an employee for your employer. Your salary will be proportional to the number of hours worked.
What to do if your employer is against a mutual termination of your employment contract?
Chevron
If, after the meeting with the employer, the negotiated termination has failed, the only solution left is resignation. Unfortunately, in most cases, this procedure does not entitle you to unemployment benefits. However, there are exceptions. You may even be eligible for unemployment benefits (ARE) under certain conditions. Resignation requires respecting a notice period that varies depending on your length of service in the company.