Employment Contracts in France: CDI vs CDD, Social Charges & Severance

Whether you’re signing your first hire in Paris or setting up a Dubai entity to employ a regional team, understanding employment contracts in France is the starting point for getting hiring, payroll and severance right. This guide covers the French framework end-to-end — CDI and CDD contracts, the written-form rules, mandatory terms, probation, social charges, the 35-hour week, and termination and severance — then bridges into UAE hiring, where payroll, WPS and GPSSA compliance replace the French rulebook entirely.

What is an employment contract in France?

An employment contract in France (contrat de travail) is the agreement governing the working relationship, set within the Labour Code (Code du travail) and, crucially, the applicable collective bargaining agreement (convention collective) for the sector. French labour law is strongly protective of employees, and many terms are fixed by law or by the sector agreement rather than left to the parties.

The defining feature is that the CDI — the permanent, open-ended contract — is the default. Any other form (fixed-term, temporary, part-time) is an exception that is only lawful in defined circumstances and usually must be in writing. On top of the contract, the employer must register the employee, run payroll with heavy social contributions, and comply with working-time, health-and-safety and collective-agreement rules.

Because so much is set by the Code and the convention collective, the room for bespoke drafting is limited and the cost of employing is high. This is a very different world from at-will systems — and closer, in its use of a mandatory framework, to the UAE. The key contrast is that the UAE contract is standardised and government-registered, with one clean set of federal entitlements rather than France’s dense layering of code, sector agreement and social charges.

CDI vs CDD: what’s the difference?

The core choice in French hiring is CDI versus CDD. The CDI (contrat à durée indéterminée) is permanent and the default; the CDD (contrat à durée déterminée) is fixed-term and tightly restricted.

A CDD cannot be used to fill a role that is a permanent part of the business, must state a valid reason, and if it is used unlawfully — wrong reason, missing writing, too many renewals — it is reclassified as a CDI, with back pay and penalties. At the end of a lawful CDD, the employee usually receives a precarity premium of around 10% of total gross pay [VERIFY current rate]. The UAE, by contrast, uses renewable fixed-term contracts under Federal Decree-Law No. 33 of 2021 as the standard form, without France’s restrictions on when a fixed term may be used or a precarity premium.

Does a French employment contract have to be in writing?

Not always — but usually. A permanent, full-time CDI is not strictly required to be in writing under national law, yet a written contract is standard practice and strongly advised, and the sector’s collective agreement often requires one.

Even where a written CDI is not legally compulsory, the employer must still give the employee written information on the essential terms of the relationship, and the convention collective applies automatically and adds mandatory terms on pay scales, notice, leave and more [VERIFY current information-obligation rules]. In practice, every serious employer papers the contract. This is the same discipline the UAE enforces — there the registered contract must be in place before the work permit and WPS payroll can operate.

What must a French employment contract include?

A French employment contract should set out the commercial terms while respecting the Labour Code and the sector agreement. Typical and often-required content includes:

Salary must respect both the national minimum wage (SMIC) and any higher minimum in the collective agreement, and pay classifications follow the sector grid [VERIFY current SMIC]. Because the convention collective can override the contract in the employee’s favour, drafting has to account for the sector rules from the start — a complexity that leads many international groups to consolidate a regional team in a simpler jurisdiction such as the UAE and let a local partner run payroll, accounting and tax under one clear statute.

How do probation periods work in France?

Probation in France (période d’essai) must be written into the contract and is capped by law according to the employee’s category. It is not an at-will window, and there are notice requirements even during the trial.

These periods can sometimes be renewed once if the contract and the collective agreement allow, up to statutory maximums, and a minimum notice period applies before ending the trial [VERIFY current rules]. The probation must be genuine and cannot be used to disguise an unlawful dismissal. This disciplined approach mirrors the UAE, where probation can run up to six months under the Labour Law but termination still follows a defined process rather than free dismissal.

What are social charges in France and how high are they?

France’s social charges (cotisations sociales) are among the highest anywhere and are the single biggest surprise for foreign employers. Both employer and employee contribute, but the employer share is large — commonly around 40–45% on top of gross salary, so total employment cost sits well above the headline wage.

The exact employer and employee percentages vary by salary band, company size and sector, and reliefs apply at lower salary levels [VERIFY current rates and reliefs]. The practical effect is that an employee costing, say, a gross salary also costs the employer a substantial additional percentage in charges — and the employee’s net take-home is well below gross after their own contributions and income tax withheld at source. In the UAE there are no such payroll charges on salaries: wages are simply transferred through the Wage Protection System, with pension contributions (via GPSSA) only for UAE and GCC nationals.

How does the 35-hour week and overtime work in France?

The statutory working week in France is 35 hours. Time worked beyond that is overtime, paid at a premium or compensated with rest, within legal and collective-agreement limits.

Key points employers must manage:

• Overtime premium on hours above 35, at rates set by law or the sector agreement [VERIFY current rates].
• Maximum limits on daily and weekly hours and mandatory daily and weekly rest.
• Forfait-jours for many managers (cadres), who are measured in working days per year rather than weekly hours, subject to a written agreement and workload safeguards.
• Paid leave of five weeks per year is standard, plus public holidays and, often, additional RTT days [VERIFY].

Working-time rules are strictly enforced and are a common source of disputes and back-pay claims. None of this maps onto the UAE, where working hours follow Federal Decree-Law No. 33 of 2021, there is no 35-hour reference, and overtime is calculated under the Labour Law rather than a sector convention.

How does termination and severance work in France?

Dismissing an employee in France is procedurally demanding and cannot be done at will. Any dismissal needs a real and serious cause (cause réelle et sérieuse) — whether personal (conduct, performance) or economic — and must follow a strict procedure, including a preliminary meeting and formal notification.

Where the dismissal is valid but without gross misconduct, the employee is generally entitled to:

Statutory severance is based on length of service and salary, with the sector agreement sometimes providing more, and an unfair dismissal (no real and serious cause, or procedural failure) can lead to additional damages within a legally scaled band [VERIFY current scale]. A negotiated rupture conventionnelle (mutually agreed termination) is a common alternative that still carries an indemnity. Contrast this with the UAE, where termination follows Federal Decree-Law No. 33 of 2021 and the payout is end-of-service gratuity based on basic salary and tenure — a cleaner, more predictable calculation than France’s procedure-heavy regime with unfair-dismissal exposure.

Are non-compete and confidentiality clauses enforceable in France?

Confidentiality clauses are enforceable in France. Non-compete clauses are enforceable too — but only if the employer pays financial compensation to the former employee, which is unusual by global standards.

A French non-compete is only valid if it protects a legitimate business interest, is limited in time, geographic scope and type of activity, and provides financial compensation paid to the employee during the restricted period [VERIFY current requirements]. Without the compensation, the clause is void. As with every country in this series, restrictive covenants are jurisdiction-specific and cannot be lifted from a US, offshore or other template — and the same is true when drafting UAE contracts.

France vs UAE: how does hiring compare?

France and the UAE both use mandatory written frameworks and reject at-will dismissal, but France layers on very high social charges, the 35-hour week, sector collective agreements and a strict dismissal procedure. The UAE is registered-contract, WPS-driven and free of personal income tax.

Hiring in the UAE: WPS, GPSSA and contracts explained

When you hire in the UAE, the framework is far lighter than France’s: a mandatory registered employment contract, salary payment through WPS, and GPSSA pension contributions for UAE and GCC nationals only. There is no personal income tax, so the employee’s gross salary is what they keep, subject only to any agreed deductions.

Private-sector employment is governed by Federal Decree-Law No. 33 of 2021 and its executive regulations. Contracts are fixed-term (renewable), probation can run up to six months, and on termination employees are entitled to end-of-service gratuity calculated on basic salary and length of service [VERIFY exact accrual bands]. There are no 40%+ social charges, no 35-hour framework and no sector-wide collective agreement to layer on top.

The Wage Protection System (WPS), monitored by MoHRE, requires employers to pay staff electronically through approved channels so wages are traceable and timely. Late or non-payment can trigger fines and suspension of new work permits [VERIFY current penalties]. For UAE and GCC nationals, employers must also register with the General Pension and Social Security Authority (GPSSA) and remit pension contributions — expat staff are outside GPSSA. Getting these moving parts right from the first payroll run is exactly what Fastlane’s payroll and WPS service is built for.

What does compliant UAE payroll cost?

Running compliant UAE payroll has two cost layers: the employee cost (salary, gratuity accrual, and GPSSA for nationals) and the compliance cost (payroll processing, WPS, and the tax registrations your new entity needs). Unlike France, there are no 40%+ employer social charges and no income tax to withhold on salaries.

Here’s a simple worked example for one expat employee on a mainland setup:

On the compliance side, Fastlane sets up and runs payroll and WPS as a managed service, and handles the tax registrations that come with employing people through a UAE entity:

For context, a UAE entity only enters Corporate Tax at 9% on profits above AED 375,000, and registers for VAT once taxable supplies pass AED 375,000 (mandatory) or AED 187,500 (voluntary). Salaries themselves are never taxed — the cost of employing in the UAE is genuinely the salary plus gratuity plus light compliance, which is what makes it attractive for regional headcount versus a high-charge jurisdiction like France.

Common cross-border hiring mistakes to avoid

Companies moving between France and the UAE make the same avoidable errors. Most come from assuming one country’s rules travel with the employee. The costly ones:

1. Copy-pasting a French contract into the UAE. CDI/CDD, social-charge and convention-collective clauses have no meaning under UAE law; the contract must follow Federal Decree-Law No. 33 of 2021 and be registered.
2. Paying UAE salaries outside WPS. Even one off-system payment can breach WPS and put future work permits at risk.
3. Missing GPSSA for national hires. Employers must register and contribute for UAE/GCC nationals — a step France-based teams routinely overlook.
4. Ignoring end-of-service gratuity. UAE gratuity accrues from day one and must be funded — it is not the same as a French indemnité de licenciement.
5. Assuming a 35-hour or overtime rule applies. UAE working time follows its own Labour Law, not the French framework.
6. Forgetting the entity’s own tax duties. Employing through a UAE company brings Corporate Tax and possibly VAT obligations that must be registered on time.

The clean way to avoid all six is to let a local, FTA-registered team stand up your UAE employment, payroll and tax framework from the outset. That’s precisely the remit of Fastlane’s payroll services and company incorporation support.

Key terms glossary