Since its introduction in 2008, the rupture conventionnelle individuelle (mutual termination agreement) has become one of the most commonly used methods for terminating indefinite term employment contracts in France. It offers a flexible and consensual alternative to resignation or dismissal, enabling both the employer and employee to agree on a departure while allowing the employee to access unemployment benefits, which would not generally be available to them following a resignation.

In 2024 more than 500,000 mutual termination agreements were signed, and these terminations accounted for 26% of the total cost of unemployment benefit and related public expenditure.

Recent legislative changes, however, signal a shift in the legal and financial framework governing mutual termination agreements. These reforms reflect the government’s aim of reducing public spending on unemployment benefits and limiting the perceived misuse of mutual termination agreements.

The first main change (affecting employers) is to increase the cost of this type of termination for the employer. As of 1^st January 2026, the specific employer’s social contribution on termination indemnities has increased from 30% to 40%.

The second major change (affecting employees) is to reduce unemployment benefits (law of 2^nd June 2026). This law which will be applicable from 1^st September 2026, introduces a specific unemployment insurance regime for employees leaving under the terms of a mutual termination...

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