Restricting the use of contractual terminations: a solution to reduce unemployment?

Philippe Folgado (interview by Margaux Fodéré) // Photo credit: Tobias SCHWARZ / AFP 20:30 p.m., November 27, 2023

The government is thinking of reforming the contractual termination, a system that allows you to leave your company while receiving compensation. According to the executive, this reform would reduce unemployment. But is this a solution that would really be effective? This is not the opinion of Bertrand Martinot, an expert on the labour market.

"It would be shooting yourself in the foot"

Before, the labour market was very different from what it is today: "We had a labour market that was very rigid on the employment contract. It was resignation or dismissal, and in both cases, it was quite complicated." The contractual termination was introduced in 2008 and has created "a new method of termination by mutual consent and in a legally secure manner". And the advantage is that this system benefits both the employer and the employee: "For the employer, the advantage is legal security. For the employee, he will be able to benefit from unemployment insurance."

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According to Bertrand Martinot, the scheme has promoted "the dynamism of the labour market, which also benefits seniors". According to him, reforming the contractual termination: "It would be shooting oneself in the foot to restrict this system, except perhaps a few months or quarters before retirement. Because, indeed, there is certainly an abuse of the use of this contractual termination to send seniors to unemployment insurance, a few months before retirement."