If you are made redundant, your employer must give notice. However, he can exempt you from doing it but must, for this, pay you compensation in lieu of notice. Find out everything you need to know about this allowance.
1 Definition of compensation in lieu of notice
In the absence of a text, minimum periods of notice are set by law, according to seniority in the company, except in the event of dismissal for gross or serious misconduct. For example, for a seniority of between six months and two years, the duration is fixed at one month. For a seniority of more than two years, it amounts to two months. These periods are therefore applicable unless there are contractual provisions that are more favorable for the employee. The starting point of the notice is, in the dismissal procedure, the date of notification of the dismissal by the employer.
When notice is not given, this automatically gives rise to the right to compensation in lieu of notice. It must be paid by the person who is at the origin of the non-performance of the notice, namely:
- the employer: si the non-performance is linked to faulty behavior (wrongful dismissal for serious misconduct) or if it exempts the employee from giving notice.
- the employee: s‘he refuses to perform his work normally during the notice period, he receives nothing and himself becomes liable for a compensatory indemnity towards his company.
2 Beneficiaries of compensation
Any employee has the right to compensation in lieu of notice if the employer is exempted from complying with his notice, except:
- in the event of dismissal for serious or gross misconduct.
- in the event of a waiver of notice requested by the employee and granted by the employer.
- in the event of the employee's inability to give notice (due to illness, incapacity, imprisonment, etc.), unless the reason for this impossibility is attributable to the employer: in the event of accident at work or occupational disease.
3 Calculation of the amount of compensation in lieu of notice
The compensatory notice indemnity corresponds to all the salaries, bonuses and benefits that the employee would have received if he had worked during this period (article L1234-5 of the Labor Code). This is understood to mean benefits in kind, target bonuses, profit-sharing bonuses, etc. General salary increases and all bonuses (vacation bonus, 13th month, etc.) that would have been paid. during this notice period are also to be taken into account. No reduction in salary or benefits should take place during this period. The indemnity in lieu of notice is paid on the date of termination of the contract.
4 Tax and social regime of the indemnity
The indemnity in lieu of notice has the character of a salary. It is therefore subject to income tax and social contributions under the same conditions as wages.
5 Cumulation with other indemnities
The compensatory notice indemnity can be combined with the other indemnities provided for in the context of the dismissal procedure: the statutory dismissal indemnity and the compensatory indemnity for paid vacation.