How to Calculate the Special Severance Pay 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 illness), they are entitled to enhanced compensation under Article L.1226-14 of the French Labour Code. But calculation errors are common: doubling the wrong indemnity, forgetting to compare against the collective bargaining agreement, confusing the two sums due, and so on. Here is the complete method to calculate correctly.

Table of Severance Indemnities for Unfitness

The amount depends on the origin of the unfitness. Here is an overview before going into detail:

Item	Non-occupational unfitness	Occupational unfitness (workplace accident/occupational illness)
Severance indemnity	Statutory indemnity (Art. L.1234-9), or contractual/collective bargaining indemnity if more favourable	Special indemnity = double the statutory indemnity (Art. L.1226-14); the collective bargaining indemnity, however, is not doubled
Notice period	Not performed; no compensatory indemnity in lieu of notice, but the notice period is taken into account when calculating the severance indemnity (Art. L.1226-4)	Indemnity equal to the compensatory indemnity in lieu of notice (Art. L.1226-14, referring to L.1234-5), due even where notice is not performed
Legal basis	Art. L.1226-4	Art. L.1226-14

The remainder of this article details the calculation for occupational unfitness — the case that gives rise to the most 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:

1. A termination indemnity equal in amount to the compensatory indemnity in lieu of notice (Article L.1234-5).
2. A special severance indemnity equal to twice the statutory severance indemnity (Article L.1234-9), unless more favourable collective bargaining provisions apply.

Here is the exact wording: “Termination of the employment contract in the cases provided for in the second paragraph of Article L.1226-12 entitles the employee to a compensatory indemnity equal in amount to the compensatory indemnity in lieu of notice provided for in Article L.1234-5, as well as to a special severance indemnity which, unless more favourable collective bargaining provisions apply, is equal to twice 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-security/tax regimes.

How to Calculate the Special Severance Indemnity?

Step 1: Calculate the statutory severance indemnity (L.1234-9)

The statutory severance indemnity is calculated as follows:

• 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 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 premiums).

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 in the collective bargaining agreement is never doubled, unless the collective bargaining 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 bargaining indemnity

You must carry out a mandatory comparison:

• A = 2 × statutory indemnity (special indemnity under L.1226-14).
• B = collective bargaining severance indemnity (not doubled, calculated according to the scale in your collective bargaining agreement).

You pay the more favourable amount to the employee: max(A, B).

The two are neither combined nor added together: 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: employee with 15 years of service, 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 bargaining indemnity (sample agreement):

• Suppose the agreement provides for 1/3 of a month per year of service = 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 bargaining 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 indemnity in lieu of notice (Article L.1234-5), but its legal nature is different. It is not a notice-period indemnity — it is a specific termination indemnity.

Calculation Rules

• The quantum is determined by reference to the statutory notice period, not the contractual/collective notice period even if the latter 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-Security and Tax Regime

• Subject to social-security contributions (Cass. soc., 11 January 2017, no. 15-19.959).
• Does not give rise to paid-leave entitlement (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 for the compensatory indemnity for paid leave (Cass. soc., 12 October 2011, no. 10-18.904).
• Does not postpone the contract end date: the contract ends on the date the dismissal is notified (Cass. soc., 15 June 1999, no. 97-15.328).
• Can be combined with daily social-security benefits (IJSS).

Example

Managerial employee (cadre) with a 2-month statutory notice period, salary of €3,000 gross → indemnity = €6,000 gross.

Which Wording Should Be Used on the Payslip?

Terminological precision is essential to avoid any subsequent dispute:

On the Payslip

• For the special indemnity: “Special severance indemnity – Art. L.1226-14 (double the statutory – Art. L.1234-9)” OR “Collective bargaining severance indemnity (not doubled) – more favourable”.
• For the notice-equivalent indemnity: “Termination indemnity – Art. L.1226-14 – amount equal to the compensatory indemnity in lieu of notice (Art. L.1234-5)”.

To be strictly avoided: any standalone use of “compensatory indemnity in lieu of notice” 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 Mistakes to Avoid?

1. Doubling the collective bargaining indemnity instead of the statutory one — a costly and legally unfounded error.
2. Adding together the special indemnity and the collective bargaining indemnity — it is one or the other (the more favourable).
3. Omitting the A vs B comparison — mandatory in all cases.
4. Confusing the “amount equal to notice” indemnity with a genuine notice-period indemnity.
5. Calculating in net terms instead of gross — the special indemnity is calculated in gross terms (Cass. soc., 7 May 2024, no. 22-21.479).
6. Using the contractual notice period for the L.1226-14 indemnity — only the statutory period counts.

What If the Length of Service Is Insufficient for the Statutory Indemnity?

If the employee does not have the length of service required for the statutory indemnity, the calculation gives: A = 2 × 0 = 0. You then calculate B (the collective bargaining indemnity); if B > 0, you pay B. The special indemnity may therefore be nil if the collective bargaining indemnity is also nil — but this is a rare case, since most collective bargaining agreements provide for lower length-of-service conditions.

Special Case: Fixed-Term Contract Terminated for Work-Related Unfitness

For a fixed-term contract (CDD), the termination indemnity cannot be less than twice the statutory severance indemnity (Article L.1226-20, paragraph 4), with no one-year length-of-service requirement (pro-rated if less than one year). To this is added the precarity/end-of-contract indemnity (10%), which is cumulative — early termination for unfitness not being one of the exclusion cases under Article L.1243-10.

Calculation Checklist — 6-Step Summary

1. Fix the dates: unfitness examination, receipt of the opinion, notification of dismissal.
2. Qualify the origin as of the termination date: occupational (workplace accident/occupational illness) or not.
3. Calculate A = 2 × statutory indemnity (L.1234-9).
4. Calculate B = collective bargaining indemnity (not doubled).
5. Pay max(A, B) + the L.1226-14 “amount equal to notice” indemnity (statutory duration).
6. Word the payslip and letter correctly (article references, exact terminology).

FAQ — Special Indemnity for Work-Related Unfitness

Is the special indemnity subject to income tax?

The special severance indemnity follows the tax regime of severance indemnities: it is exempt within the limits provided for in Article 80 duodecies of the French General Tax Code (the greater 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 genuine and serious cause (for example, due to a failure to redeploy the employee), the employee may obtain damages in addition to the special indemnity. The minimum award is 6 months’ salary (Article L.1226-15), without application of the “Macron scale” (barème Macron).

Can the collective bargaining indemnity be doubled?

No, unless the collective bargaining agreement expressly provides for it. In the absence of a doubling clause, only the statutory indemnity is doubled. The collective bargaining indemnity serves solely as a comparison (Cass. soc., 25 March 2009, no. 07-41.708).

Need to verify your indemnity calculations? Contact the lawyers at DAIRIA for an audit of your final settlement (solde de tout compte).

Further reading: severance indemnity simulator | complete dismissal guide

The Recognition Procedure for a Workplace Accident or Occupational Illness

Managing workplace accidents and occupational illnesses (AT/MP) is a major challenge for employers, both in human and financial terms. The legal framework is set out in 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 the cause. The presumption of imputability benefits the employee: as soon as the accident occurs at the time and place of work, it is presumed to be occupational.

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 the Cerfa form no. 14463*03
• Provide the employee with the accident form (form S6201) enabling them to benefit from 100% coverage of medical costs
• Issue reasoned reservations where applicable, within the accident declaration itself, if the employer doubts the occupational nature of the accident

The CPAM (local health insurance fund) has a period of 30 clear days to rule on recognition of the occupational nature (90 days in the event of further investigation). See our AT/MP guide to learn about your rights and obligations.

The Financial Impact of Workplace Accidents/Occupational Illnesses on Employer Contributions

The AT/MP contribution rate is directly linked to the company’s claims record. Three modes of rate-setting exist depending on headcount:

• Collective rate-setting (companies with fewer than 20 employees): rate set by sector of activity
• Mixed rate-setting (20 to 149 employees): a combination of the collective rate and the company’s own rate
• Individual rate-setting (150 employees and more): rate calculated on the establishment’s own claims record

The average cost of a workplace accident is categorised according to the duration of the absence and the after-effects. A serious accident with permanent incapacity can affect the AT/MP rate for 3 consecutive years, representing a considerable additional contribution cost.

The Court of Cassation held, in a judgment dated Cass. 2e civ., 16 November 2023, no. 22-11.789, that the employer may challenge the enforceability of the coverage decision even after the time limit for challenging the contribution rate, provided it invokes a substantial procedural defect.

It is therefore essential to actively monitor your AT/MP rates and to challenge coverage decisions where the conditions for the presumption of imputability are not met. Our firm, through DAIRIA IA, can support you in the automated monitoring of your claims record.

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