In Monaco, the Labour Code outlines the minimum notice periods required for employment termination, which vary based on the employee's length of service with the same employer.

Notice Period Based on Seniority

For those who have been with the same employer for less than six months, no notice period is required for either party. If the employment duration is between six months and two years, a one-month notice period applies to both the employer and the employee. For those who have been with the same employer for more than two years, a two-month notice period is required.

It's important to note that collective bargaining agreements or established company practices may mandate a longer notice period, superseding these minimum notice periods.

Exceptions to Notice Periods

In cases of serious misconduct by the employee, the employer can initiate a summary dismissal. This allows for the immediate termination of employment without a notice period. However, such dismissals must adhere to specific legal guidelines and may require justification.

Severance pay, or indemnité de licenciement as it's known in French, is a financial compensation that an employer in Monaco may be obligated to provide an employee upon the termination of their employment contract. This entitlement is regulated by Articles 6 and 7 of Law No. 729 of 16 March 1963 on Employment Contract Termination.

Eligibility Criteria

Employees are entitled to severance pay if they have been continuously employed with the same employer for at least two years. However, severance pay is generally not required if the termination is due to the employee's serious misconduct.

Calculating Severance Pay

The calculation of severance pay in Monaco is based on two factors: the length of employment and the average gross monthly salary. The length of employment is calculated as 1/4 of the monthly salary for each year of service for the first 10 years, and 1/3 of the monthly salary for each year of service beyond the first 10 years. The average gross monthly salary is usually based on the salary received during the last 12 months of employment.

Important Considerations

Some collective agreements may have clauses providing for more favorable severance terms compared to the statutory minimum. Additionally, under specific circumstances, additional severance pay may be awarded to dismissed employees who are over the age of 50 or have been with the employer for more than ten years.

The termination of an employment contract in Monaco can be initiated by either the employer or the employee. Regardless of who initiates the termination, specific legal processes must be followed, as stipulated in Monaco's Labour Code.

Termination by the Employer

An employer must have a valid reason for terminating an employee's contract. This could be due to factors such as the employee's performance, misconduct, or economic reasons affecting the company. Before terminating the employment, the employer must provide a written dismissal letter (lettre de licenciement) to the employee. The letter must explicitly state the reason for dismissal.

For most dismissals, the employer must hold a dismissal interview with the employee before the termination takes effect. This provides the employee with an opportunity to respond to the employer's justification for dismissal.

Termination by the Employee (Resignation)

An employee wishing to terminate their contract must submit a resignation letter to their employer.

Special Cases

Under exceptional circumstances, mainly related to the employee’s severe misconduct, an employer may terminate the contract without notice. Employers and employees may mutually agree to terminate the contract through a process known as a "rupture conventionnelle". This process must be officially approved by the Labor Inspectorate of Monaco (Inspection du Travail).