Calculate redundancy benefits in the construction industry

Understanding the rules of severance pay is necessary to meet your legal and contractual obligations. Here are the elements to calculate the compensation of workers, ETAM or managers, with concrete examples and easy-to-use formulas.

Who can get redundancy compensation?

In the event of dismissal, the law requires the employer to pay severance pay To Any Employee on a Permanent Contract with at Least 8 Months of Seniority (excluding sickness, and excluding part of parental education leave).

The compensation may be:

• Legal: provided for by the Labor Code.
• Conventional: Defined by a collective agreement or an applicable collective agreement.
• Contractual: Specified in the employment contract.

Legal compensation or compensation according to the collective agreement?

When you have to dismiss an employee on a permanent contract, it is necessary to know the various redundancy benefits. The legal compensation is The Minimum Provided for in the Labor Code and is not due in case of serious or serious misconduct, unless otherwise provided in the collective agreement.

The applicable collective agreement Can provide for more favorable conditions In terms of seniority or amount. You must therefore calculate and compare the legal and conventional compensation and pay the most expensive compensation for the employee.

To determine the applicable collective agreement, Consult the employment contract or pay slips Of the employee.

The calculation of the severance pay depends on three criteria

Three main criteria must be taken into account when calculating the severance pay.

The status of the employee

The calculation of the severance pay varies depending on whether the employee is a worker, an ETAM (Employees, Technicians and Control Agents) or an executive in the construction sector. Each category has specific rules Defined by the national collective agreement, which are often more favourable than legal provisions.

Seniority

The length of service of the employee plays an important role In calculating the severance pay. The law requires a minimum of 8 months of continuous seniority to be eligible.

The reference salary

To calculate the amount of your employee's Severance Pay, you must first Determine your salary reference. It includes not only the base salary, but also bonuses, exceptional or annual bonuses, paid vacation allowances, commissions, etc. The salary reference will serve as a Basis for calculating the amount of compensation Dismissal to be paid.

Method for calculating redundancy benefits

The calculation of redundancy benefits is based on two elements: the length of service of the employee and the employee's reference salary.

Determining seniority

The length of service of an employee is calculated taking into account the Time of Work Done on a Continuous Basis with the same employer, unless more favourable contractual provisions apply. This length of service is indicated on the employee's pay slip.

Some periods of suspension of the contract are fully or partially recorded, while others are excluded for the calculation of seniority.

Determining the reference salary

The reference salary is used to calculate the severance pay. He is Determined in the Most Consistently Manner For the employee:

• By taking the Monthly Average for the Last 12 Months Prior to the dismissal.
• Or by taking the Monthly Average for the Last 3 Months. In this case, exceptional or annual bonuses and bonuses are included in proportion to the working time. If an annual bonus has been received, 1/12th of its amount is added to each of the last 3 reference months.

Calculate the compensation according to the status of the employee

The severance pay varies according to the status and length of service of the employee. The Rules Differ Between Legal Provisions and Conventional Agreements.

Legal compensation

This allowance is defined by the Labor Code and applies unless a more favorable conventional compensation exists. It is based on the length of service of the employee.

<table><thead>
  <tr>
    <th>Ancienneté</th>
    <th>Formule de calcul de l'indemnité</th>
    <th>Exemple de calcul</th>
  </tr></thead>
<tbody>
  <tr>
    <td>8 mois à moins de 10 ans</td>
    <td>1/4 de mois de salaire par année d'ancienneté</td>
    <td>Ancienneté de 3 ans, salaire de référence 2 000 € : (2 000 € x 1/4 x 3) = 1 500 €</td>
  </tr>
  <tr>
    <td>10 ans et plus</td>
    <td>1/4 de mois de salaire par année jusqu'à 10 ans + 1/3 après 10 ans</td>
    <td>Ancienneté de 13 ans, salaire de référence 2 000 € : [(2 000 € x 1/4 x 10) + (2 000 € x 1/3 x 3)] = 6 000 €</td>
  </tr>
</tbody>
</table>

‍

For more detailed calculations, especially in the event of a change in working hours, you can consult the public service website Hather.

Conventional compensation

Conventional benefits, specific to each professional category according to their collective agreement, take precedence. When more favourable than the legal compensation.

The Calculation of the Dismissal Pay for a Worker

Conventional benefits (table below) for workers are specified in their collective agreement.

<table><thead>
  <tr>
    <th>Catégorie</th>
    <th>Ancienneté</th>
    <th>Indemnité conventionnelle</th>
    <th>Majoration (plus de 55 ans)</th>
  </tr></thead>
<tbody>
  <tr>
    <td>Ouvriers</td>
    <td>Moins de 2 ans</td>
    <td>Pas d'indemnité</td>
    <td>-</td>
  </tr>
  <tr>
    <td>Ouvriers</td>
    <td>2-5 ans</td>
    <td>1/10ème par mois par année</td>
    <td>10% du total</td>
  </tr>
  <tr>
    <td>Ouvriers</td>
    <td>Plus de 5 ans</td>
    <td>3/20ème par mois par année</td>
    <td>10% du total</td>
  </tr>
  <tr>
    <td>Ouvriers</td>
    <td>Plus de 15 ans</td>
    <td>3/20ème par mois par année jusqu’à 15 ans, puis 4/20ème pour les années au-delà</td>
    <td>10% du total</td>
  </tr>
</tbody>
</table>

‍

Example for a worker over 55 years of age with 6 years of seniority and a monthly salary of €1,800:

• Calculation of legal compensation: 1/4 × 1,800€ × 6 = 2,700€
• Calculation of conventional compensation: 3/20 × 1,800€ × 6 = 1620€

With an increase of 10% for over 55 years: €1,620 × €1.10 = €1,782.

In this case, The legal compensation is more favorable for the worker because it amounts to €2,700, compared to €1,782 (after increase) for the conventional compensation.

The calculation of the severance pay for an ETAM

Allowances for eTeams are also calculated on a basis proportional to seniority, with a possible increase for employees over 55 years of age.

<table><thead>
  <tr>
    <th>Catégorie</th>
    <th>Ancienneté</th>
    <th>Indemnité conventionnelle</th>
    <th>Majoration (plus de 55 ans)</th>
  </tr></thead>
<tbody>
  <tr>
    <td>ETAM</td>
    <td>Moins de 2 ans</td>
    <td>Pas d'indemnité</td>
    <td>-</td>
  </tr>
  <tr>
    <td>ETAM</td>
    <td>2-15 ans</td>
    <td>2.5/10ème par mois par année</td>
    <td>10% du total</td>
  </tr>
  <tr>
    <td>ETAM</td>
    <td>Plus de 15 ans</td>
    <td>2.5/10ème par mois par année jusqu’à 15 ans, puis 3.5/10ème pour les années au-delà</td>
    <td>10% du total</td>
  </tr>
</tbody>
</table>

‍

Example for an ETAM over 55 years old with 14 years of experience and a monthly salary of 2,500€:

• Calculation of legal compensation: (1/4 × €2,500 × 10) + (1/3 × €2,500 × 4) = €9,583.33
• Calculation according to the collective agreement: 2.5/10 × €2,500 × €2,500 × 14 = €8,750

With a 10% increase for over 55 years: €8,750 × €1.10 = €9,625.

Conventional compensation is more favorable In that case.

The Calculation of the Severance Pay for an Executive

Managers receive benefits that increase significantly after 10 years of service, with an increase for those over 55.

<table><thead>
  <tr>
    <th>Catégorie</th>
    <th>Ancienneté</th>
    <th>Indemnité conventionnelle</th>
    <th>Majoration (plus de 55 ans)</th>
  </tr></thead>
<tbody>
  <tr>
    <td>Cadres</td>
    <td>Moins de 2 ans</td>
    <td>Pas d'indemnité</td>
    <td>-</td>
  </tr>
  <tr>
    <td>Cadres</td>
    <td>2-10 ans</td>
    <td>3/10ème par mois par année</td>
    <td>10% du total</td>
  </tr>
  <tr>
    <td>Cadres</td>
    <td>Plus de 10 ans</td>
    <td>3/10ème par mois par année jusqu’à 15 ans, puis 6/10ème pour les années au-delà</td>
    <td>10% du total</td>
  </tr>
</tbody>
</table>

‍

Example for an executive over 55 years of age with 17 years of seniority and a monthly salary of €4,000:

• Calculation of legal compensation: (1/4 × 4,000€ × 10) + (1/3 × 4,000€ × 7) = 19,333.33€
• Calculation according to the collective agreement: 3/10 × 4000€ × 4000€ × 4000 × 15 + 6/10 × 4000€ × 2 = 22,800€

With an increase of 10% for over 55 years: 22,800€ × 1.10 = 25,080€.

For this framework, The Conventional Compensation Is Again More Favorable.