How to Calculate the Special Dismissal Indemnity for Work-Related Unfitness in France
When an employee is dismissed for work-related unfitness (inaptitude d’origine professionnelle — following a workplace accident or occupational disease), they are entitled to enhanced compensation under Article L. 1226-14 of the French Labour Code. But calculation errors are frequent: doubling the wrong indemnity, forgetting to compare with the collective bargaining agreement, confusing the two sums due, and so on. Here is the complete method to calculate correctly.
Table of dismissal indemnities for unfitness
The amount depends on the origin of the unfitness. Here is an overview before going into detail:
| Item | Non-work-related unfitness | Work-related unfitness (accident/occupational disease) |
|---|---|---|
| Dismissal indemnity | Statutory indemnity (Art. L. 1234-9), or contractual (collective agreement) if more favourable | Special indemnity = double the statutory indemnity (Art. L. 1226-14); the collective agreement indemnity, however, is not doubled |
| Notice period | Not performed; no compensatory notice indemnity, but the notice period is taken into account for calculating the dismissal indemnity (Art. L. 1226-4) | Indemnity equal to the compensatory notice indemnity (Art. L. 1226-14, referring to L. 1234-5), due even if the notice period is not performed |
| Legal basis | Art. L. 1226-4 | Art. L. 1226-14 |
The remainder of this article details the calculation for work-related unfitness — the case most prone to errors.
What does Article L. 1226-14 of the French Labour Code provide?
Article L. 1226-14 provides that an employee dismissed for work-related unfitness is entitled to two distinct indemnities:
- A termination indemnity equal in amount to the compensatory notice indemnity (Article L. 1234-5).
- A special dismissal indemnity equal to double the statutory dismissal indemnity (Article L. 1234-9), unless more favourable provisions exist in the collective bargaining agreement.
Here is the exact wording: “Termination of the employment contract in the cases provided for in the second paragraph of Article L. 1226-12 gives the employee the right to a compensatory indemnity equal in amount to the compensatory notice indemnity provided for in Article L. 1234-5, as well as to a special dismissal indemnity which, unless more favourable provisions exist in the collective agreement, is equal to double the indemnity provided for in Article L. 1234-9.”
It is essential to clearly distinguish these two sums: they have different legal natures, different calculation bases and different social/tax regimes.
How to calculate the special dismissal indemnity?
Step 1: Calculate the statutory dismissal indemnity (L. 1234-9)
The statutory dismissal indemnity is calculated according to the following formula:
- 1/4 of a month’s salary per year of seniority for the first 10 years.
- 1/3 of a month’s salary per year of seniority beyond 10 years.
The reference salary is the more favourable of: the average of the last 12 months or one third of the last 3 months (including pro-rated bonuses and gratuities).
Step 2: Double the statutory indemnity
Special indemnity = 2 × statutory indemnity.
This is the core of Article L. 1226-14. Note: only the statutory indemnity is doubled. The indemnity provided for by the collective bargaining agreement is never doubled, unless the collective agreement expressly provides for it (Cass. soc., 25 March 2009, no. 07-41.708, Bull. V no. 83; 18 February 2015, no. 13-20.171; 20 November 2024, no. 23-14.949).
Step 3: Compare with the collective agreement indemnity
You must carry out a mandatory comparison:
- A = 2 × statutory indemnity (special indemnity under L. 1226-14).
- B = collective agreement dismissal indemnity (not doubled, calculated according to the scale of your collective agreement).
You pay the amount most favourable to the employee: max(A, B).
There is no accumulation or addition of the two: it is one or the other (Cass. soc., 10 May 2005, no. 03-44.313, Bull. V no. 153; 23 January 2013, no. 11-25.851).
Concrete calculation example
Situation: an employee with 15 years of seniority and a reference salary of €3,000 gross.
Calculation A — Special indemnity (double the statutory):
- Statutory indemnity = (1/4 × 3,000 × 10) + (1/3 × 3,000 × 5) = 7,500 + 5,000 = €12,500
- Special indemnity = 2 × 12,500 = €25,000 gross
Calculation B — Collective agreement indemnity (example CBA):
- Suppose the agreement provides for 1/3 of a month per year of seniority = 1/3 × 3,000 × 15 = €15,000
Comparison: A (€25,000) > B (€15,000) → payment of €25,000 gross (special indemnity).
If the agreement provided for an indemnity of €30,000: B (€30,000) > A (€25,000) → payment of €30,000 (collective agreement indemnity, not doubled).
How to calculate the indemnity “equal in amount to the notice period”?
This is the second sum provided for by L. 1226-14. Its amount is equal to that of the compensatory notice indemnity (Article L. 1234-5), but its legal nature is different. It is not a notice indemnity — it is a specific termination indemnity.
Calculation rules
- The amount is determined by reference to the statutory notice period, not the contractual notice period even if it is longer (Cass. soc., 12 July 1999, no. 97-43.641; 20 November 2024, no. 23-14.949).
- The doubling of the notice period for disabled workers does not apply to this indemnity (Cass. soc., 10 March 2009, no. 08-42.249; 4 September 2019, no. 18-13.779).
Social and tax regime
- Subject to social security contributions (Cass. soc., 11 January 2017, no. 15-19.959).
- Does not give rise to paid leave rights (Cass. soc., 4 December 2001, no. 99-44.677; 30 April 2014, no. 12-28.374; 7 February 2024, no. 22-15.988).
- Excluded from the basis of the compensatory paid leave indemnity (Cass. soc., 12 October 2011, no. 10-18.904).
- Does not push back the contract end date: the contract ends on the date the dismissal is notified (Cass. soc., 15 June 1999, no. 97-15.328).
- Cumulates with social security daily allowances (IJSS).
Example
A managerial employee (cadre) with a 2-month statutory notice period and a salary of €3,000 gross → indemnity = €6,000 gross.
What wording should be used in payroll?
Terminological rigour is essential to avoid any subsequent dispute:
On the payslip
- For the special indemnity: “Special dismissal indemnity – Art. L. 1226-14 (double the statutory – Art. L. 1234-9)” OR “Collective agreement dismissal indemnity (not doubled) – more favourable”.
- For the indemnity equivalent to the notice period: “Termination indemnity – Art. L. 1226-14 – amount equal to the compensatory notice indemnity (Art. L. 1234-5)”.
To be strictly avoided: any isolated use of “compensatory notice indemnity” as a heading. This terminological confusion can generate ancillary claims (claims for paid leave on the notice period, postponement of the contract end date, etc.).
In the dismissal letter
Explicitly cite Articles L. 1226-12 (2nd paragraph) and L. 1226-14 as the basis for the indemnities paid, distinguishing the two sums.
What are the most common errors to avoid?
- Doubling the collective agreement indemnity instead of the statutory one — a costly and legally unfounded error.
- Adding together the special indemnity and the collective agreement indemnity — it is one or the other (the more favourable).
- Omitting the A vs B comparison — mandatory in all cases.
- Confusing the “amount equal to the notice period” indemnity with a genuine notice indemnity.
- Calculating net instead of gross — the special indemnity is expressed in gross terms (Cass. soc., 7 May 2024, no. 22-21.479).
- Using the contractual notice period for the L. 1226-14 indemnity — only the statutory period counts.
What if seniority is insufficient for the statutory indemnity?
If the employee does not have the seniority required for the statutory indemnity, the calculation gives: A = 2 × 0 = 0. You then calculate B (collective agreement indemnity); if B > 0, you pay B. The special indemnity may therefore be nil if the collective agreement indemnity is also nil — but this is a rare case, since most collective agreements provide for lower seniority conditions.
Special case: fixed-term contract (CDD) terminated for work-related unfitness
For a fixed-term contract (CDD — contrat à durée déterminée), the termination indemnity cannot be less than double the statutory dismissal indemnity (Article L. 1226-20, paragraph 4), with no one-year seniority requirement (pro-rated if less than one year). To this is added the precariousness bonus (indemnité de précarité — 10%), which cumulates — since early termination for unfitness is not an exclusion case under Article L. 1243-10.
Calculation checklist — summary in 6 steps
- Fix the dates: unfitness examination, receipt of the medical opinion, notification of dismissal.
- Qualify the origin as at the termination date: work-related (accident/occupational disease) or not.
- Calculate A = 2 × statutory indemnity (L. 1234-9).
- Calculate B = collective agreement indemnity (not doubled).
- Pay max(A, B) + the L. 1226-14 indemnity “equal in amount to the notice period” (statutory duration).
- Word the payslip and letter correctly (references to articles, exact terminology).
FAQ — Special work-related unfitness indemnity
Is the special indemnity subject to income tax?
The special dismissal indemnity follows the tax regime of dismissal indemnities: it is exempt within the limits provided for by Article 80 duodecies of the French General Tax Code (CGI) (the higher of twice the gross annual remuneration or 50% of the indemnity paid, up to a limit of 6 times the annual social security ceiling — PASS).
Can the special indemnity be combined with damages?
Yes. If the dismissal is held to be without real and serious cause (for example, for failure to redeploy the employee), the employee may obtain damages in addition to the special indemnity. The minimum compensation floor is 6 months’ salary (Article L. 1226-15), without application of the “barème Macron” (statutory compensation scale).
Can the collective agreement indemnity be doubled?
No, unless the collective agreement expressly provides for it. In the absence of a doubling clause, only the statutory indemnity is doubled. The collective agreement indemnity serves solely as a point of comparison (Cass. soc., 25 March 2009, no. 07-41.708).
Need to verify your indemnity calculations? Contact the DAIRIA lawyers for an audit of your final settlement (solde de tout compte).
To go further: dismissal indemnity simulator | complete guide to dismissal
The procedure for recognising a workplace accident or occupational disease
Managing workplace accidents and occupational diseases (AT/MP) is a major issue for employers, both on a human and financial level. The legal framework is defined by Articles L.411-1 et seq. of the French Social Security Code.
Regarding workplace accidents, Article L.411-1 of the Social Security Code defines a workplace accident as any accident occurring by reason of or in connection with work, whatever its cause. The presumption of attribution benefits the employee: as soon as the accident occurs at the time and place of work, it is presumed to be work-related.
The employer must:
- Declare the accident within 48 hours (Article R.441-3 of the Social Security Code) via the DSN (nominative social declaration) or Cerfa form no. 14463*03
- Provide the employee with the accident sheet (form S6201) allowing them to benefit from 100% coverage of medical expenses
- Issue reasoned reservations where appropriate, within the accident declaration (DAT) itself, if the employer doubts the work-related nature
The CPAM (primary health insurance fund) has 30 clear days to rule on recognition of the work-related nature (90 days in the event of additional investigations). Consult our AT/MP guide to understand your rights and obligations.
The financial impact of AT/MP on employer contributions
The AT/MP contribution rate is directly linked to the company’s claims record. Three modes of pricing exist depending on workforce size:
- Collective pricing (companies with fewer than 20 employees): rate set by sector of activity
- Mixed pricing (20 to 149 employees): combination of the collective rate and the company’s own rate
- Individual pricing (150 employees and above): rate calculated on the establishment’s own claims record
The average cost of a workplace accident is categorised according to the duration of leave and the after-effects. A serious accident with permanent disability can impact the AT/MP rate for 3 consecutive years, representing a considerable additional contribution cost.
The Court of Cassation held in a ruling Cass. 2e civ., 11 January 2024, no. 22-11.789 that the employer can challenge the enforceability of the coverage decision even after the deadline for challenging the contribution rate, provided it invokes a substantial procedural defect.
It is therefore essential to set up active monitoring of your AT/MP rates and to challenge coverage decisions when the conditions of the presumption of attribution are not met. Our firm, via DAIRIA IA, can support you in the automated monitoring of your claims record.
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