Replacement contracts are an essential legal tool for ensuring the continuity of a company’s activity during the temporary absence of an employee. This particular form of fixed-term contract (CDD) is governed by strict rules set out in the French Labor Code. Understanding its specific features can help you avoid the risks of requalification as a permanent contract (CDI) and the associated financial penalties. When it comes to personnel management, mastering this system is essential for any employer.

What is a Replacement Contract?

A replacement contract is a fixed-term contract concluded to replace an employee whose employment contract has been temporarily suspended due to his or her absence. The aim is to replace an absent person, not to fill a vacant post. This absence can result from a variety of situations: sick leave, maternity leave, parental leave, vocational training or any other suspension of the employment contract. Article L1242-2 of the French Labor Code expressly authorizes this type of contract.

For example, if your assistant goes on maternity leave for 4 months, you can recruit a replacement on a fixed-term contract for that specific period. This arrangement can also be used to replace an employee who has temporarily gone part-time (such as part-time parental leave), to cover the hours not worked. The main aim is to maintain the level of activity without creating a permanent position. The duration of the contract generally corresponds to that of the replaced employee’s absence.

Authorized Replacement Cases

The legislator has precisely defined the situations justifying a replacement contract. You can recruit a replacement for an employee on maternity, paternity or adoption leave. Absences due to illness, whether short or long term, are also valid reasons.

Leave for professional training, sabbatical leave and leave to set up a business also authorize the use of replacements. Even an employee on unpaid leave can be temporarily replaced. Social and payroll management must take these different situations into account to ensure legal compliance.

Legal Requirements and Mandatory Information

Replacement contracts must be drawn up in writing. This formal requirement protects both employer and employee. The document must include mandatory information specific to this type of fixed-term contract.

You must specify the precise reason for the replacement and the identity of the employee being replaced. The contract must specify the replacement’s professional qualifications and remuneration. The minimum duration of the contract, even if it remains unspecified, must be specified. Failure to do so may result in the contract being reclassified as a permanent contract.

Contract duration and renewal

A special feature of the replacement contract is that its duration can be indefinite. In this case, the contract ends when the absent employee actually returns. You can also set a precise term if the return date is known in advance, which facilitates administrative management.

Under article L1242-8 of the French Labor Code, the contract may be renewed a maximum of two times. The total duration of the contract, including the initial contract and all successive renewals, must generally not exceed 18 months. However, this limit may be exceeded if the replaced employee’s absence is prolonged for reasons beyond the employer’s control. Extended sick leave, pathological maternity leave or long-term sick leave are legitimate reasons for exceeding this maximum duration, in which case the contract may continue until the employee’s return.

Rights and Remuneration of the Replacement Employee

Employees on replacement contracts enjoy the same rights as other company employees. The principle of equal treatment applies in full. Their remuneration may not be lower than that of the replaced employee for equivalent work, and must comply with the minimum collective bargaining agreement and the legal minimum wage in force.

You must comply with the provisions of the applicable collective bargaining agreement. For example, the collective bargaining agreement for chartered accountants – notice of resignation – lays down specific rules for this sector. At the end of the contract, the replacement employee receives an indemnity equal to 10% of the total gross remuneration paid, unless the contract is converted into a permanent contract or the employee refuses an offer of a permanent contract for the same or a similar job. This indemnity is also not payable under seasonal or customary contracts. In the case of a standard replacement contract, the indemnity generally remains payable, unless the contract is converted to a permanent contract. The employee also benefits from a 10% vacation pay indemnity, if this is more favorable.

Trial period and early termination

Replacement contracts may include a trial period, but this is not mandatory. If the employer wishes to apply it, it must be mentioned in the written contract. For contracts of less than 6 months, the trial period may not exceed one day per week of the contract’s duration, up to a maximum of two weeks. For contracts of 6 months or more, it may not exceed one month. The extension of the absence-of-calendar-day trial period is governed by specific rules.

During the trial period, either party is free to terminate the contract, subject to a notice period. This notice period is 24 hours for less than 8 days’ employment, 48 hours for between 8 days and one month’s employment, and two weeks after one month’s employment. No compensation is due in the event of termination during this period.

Early termination of the contract after the trial period remains exceptional. It is only authorized in cases of serious misconduct, force majeure or agreement between the parties. The employee may also terminate the contract if he/she can prove that he/she has been hired on a permanent basis. In the event of improper termination, the employer is liable for damages corresponding to the remuneration the employee would have received up to the end of the contract. This compensation is in addition to acquired rights (paid leave, precariousness indemnity where applicable).

Contract termination and administrative formalities

The replacement contract ends on the return of the absent employee or on the date stipulated in the contract. At the normal end of the term, no notice is required. However, in the event of early termination of a contract with a fixed term of more than 6 months, notice must be given: one day’s notice per week worked, up to a maximum of two weeks (article L1243-2 of the French Labor Code).

At the end of the contract, you must provide the employee with a number of compulsory documents on the last day of actual work, or send them within a reasonable period of time if hand delivery is not possible. The most important documents are the employment certificate, the Pôle emploi certificate and the final statement of account. Payment of the precariousness indemnity and untaken paid leave must be made on the last pay slip. You must also inform the employee of his or her rights to professional training, in particular concerning his or her personal training account (CPF).

Conversion to open-ended contract

In certain cases, the replacement contract can be converted into a permanent contract. This conversion takes place automatically if you continue the employment relationship after the end of the contract without interruption. The employee’s seniority is then calculated from the first day of the fixed-term contract, which confers all the rights associated with this seniority, notably in terms of paid leave and training entitlements.

You can also offer the replacement a permanent contract if a vacancy arises within the company. This common practice enables you to retain an employee who is already trained, operational and familiar with the work environment. The letter confirming the resignation of the employee being replaced can sometimes create a permanent hiring opportunity for the replacement. This voluntary transformation has the advantage of avoiding recruitment costs and the adaptation period usually required for a new employee.

Legal Risks and Sanctions

Failure to comply with the rules governing the replacement contract exposes the employer to significant penalties. The main risk is requalification as a permanent contract. The employee can request this requalification before the industrial tribunal (Conseil de prud’hommes) throughout the duration of the contract and up to 2 years after its end. The Conseil de prud’hommes will declare the contract requalified if it fails to meet the legal requirements.

This requalification entails the payment of a minimum indemnity equivalent to one month’s gross salary, in accordance with article L1245-2 of the French Labor Code. The employee may also claim damages for the harm suffered. The employer must regularize the employee’s situation and offer him or her a permanent contract. Social security contributions may be adjusted by URSSAF. The labor inspectorate may also impose an administrative fine of up to 3,750 euros per employee concerned, rising to 7,500 euros in the event of a repeat offence, for abusive use of fixed-term contracts, in accordance with article L1248-9 of the French Labor Code.

Controls and Vigilance

The labor inspectorate regularly checks the conformity of replacement contracts. Inspectors check that the reason for the replacement contract is genuine, and that the compulsory information has been included. They also check compliance with maximum durations and renewal conditions.

You must keep all supporting documents proving the absence of the replaced employee. Medical certificates, leave certificates and administrative documents are essential proof. Rigorous documentation protects the company in the event of litigation, and facilitates relations with the authorities.