Settlement agreements: is the government cracking down?

Too many abuses, too expensive… Settlement agreements are in the Bayrou government's sights.

But in trying to restrict them, do we risk undermining a key tool for parting company amicably?

Settlement agreements: the government wants to crack down — but watch out for the boomerang

Based on analysis published by Captain Contrat, employment law specialists.

What are these “abuses” everyone's talking about?

A settlement agreement is a win-win: the employer avoids a dispute, the employee gets a payout plus unemployment benefit. But not everyone plays fair…

🔹 According to Captain Contrat, the problem lies in “accommodating” agreements: employees resigning under another name so they can claim unemployment benefit.

That's what the Ministry of Labour is targeting: departures that look like resignations, but are funded by unemployment insurance.

The hidden cost: a real problem, or a witch hunt?

The government talks about excessive cost. But no clear figure is put forward. Out of more than 515,000 agreements in 2024, how many are genuinely abusive?

Nobody knows, which makes assessing the cost to the public purse difficult.

Tightening the rules: a crash waiting to happen?

By tightening access to settlement agreements (taxes, restricted benefits…), we risk one thing: more contested dismissals.

The settlement agreement is a peacemaker. Restricting it risks an explosion of cases before employment tribunals.

Savings versus employee protection: the big dilemma

The government wants to save money. Fine. But what about protecting the employees who use the scheme properly?

The problem is well known, but no miracle solution has yet been found to stop the abuses without breaking the tool.

Alternatives to salvage the situation?

Solutions already exist for employees who want to resign in order to retrain or start a business: the schemes run by France Travail, the national employment agency. They allow you to claim benefits if your plan is solid.

The challenge: inform and guide employees better, so they don't end up going around the settlement agreement route.

A longer waiting period: a double punishment?

Lengthening the wait before benefits kick in? The people who would suffer most are the most vulnerable.

By hitting everyone, you mainly punish the very people the system is supposed to help. Absurd?

So what do you think?

Reform, yes. But how do you stop the abuses without penalising those who need a safe way out? The debate is open.

Sources: DARES – Settlement agreements in 2023 and early 2024 Le Monde – The reform that angers Captain Contrat – Settlement agreement reform France Travail – Resignation and retraining BFMTV – Towards a longer waiting period