The fixed-term contract (CDD) for defined purpose

Social Law - Payroll

2020 / MARCH 01

As the use of a fixed-term contract (CDD) is strictly governed by law (temporary increase in activity, replacement of an employee, execution of temporary work by nature, etc.), the fixed-term contract for defined purpose was fathered in 2014 to allow companies a temporary hiring within the framework of a specific project.

Implementation conditions:

Fixed-term contracts for defined purpose must nevertheless meet several conditions for implementation:

  • They only apply to executives and engineers;
  • They can only be set up if there is an extended branch agreement, or failing this, a company agreement meeting legal requirements.

Contract length:

The fixed-term contract for defined purpose ends at the end of the project, but if there is no precise end date, the contract cannot have a duration of less than 18 months, and exceed 36 months and it is not renewable.

Mandatory mentions in the contract:

Beyond the compulsory clauses for classic fixed-term contracts, defined-purpose contracts must be adapted, in particular by the explicit indication that it is a defined-purpose contract, the precise description of the project for which it is being put in place as well as its foreseeable duration.
The contract also specifies the notice period upon arrival of the end of the contract or the continuation in permanent contract (CDI), the possibilities of breach of contract and finally the right to the payment of compensation equal to 10% of the total gross remuneration, in case of breach of contract on the initiative of the employer.

End of contract:

When the project is finalised, the employer must respect a notice period of two months minimum before the effective end of contract.
The fixed-term contract can be terminated on the initiative of the employer or the employee for real and serious reason, however, it can only be terminated 18 months after its conclusion, or each year on the anniversary date of the contract’s signature.
At the end of the contract, the employee is entitled to a compensation which amounts to 10% of the total gross remuneration, unless the fixed-term contract is followed by a permanent contract or the contract has been terminated on the initiative of the employee.

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