In a ruling dated 24 September 2025 (French Supreme Court, 24 September 2025, No. 24-15.812), the French Supreme Court confirmed that the end-of-contract allowance (“indemnité de précarité”) paid uat the end of a fixed-term contract (CDD) is owed to the employee, including where the contract is subsequently reclassified as an open-ended contract (CDI).
Subsequent reclassification does not erase the precariouness of employment
In this case, the employee had received the end-of-contract allowance provided for under Article L. 1243-8 of the French Labour Code, corresponding to 10% of total gross remuneration. Following the reclassification of the CDD as a CDI, the employer sought reimbursement of the allowance, arguing that it had been unduly paid. The Court of Appeal upheld this request, holding that the reclassification retroactively deprived the employee of the right to this allowance.
The Supreme Court confirms that the iallowance is definitively acquired
The Supreme Court overturned this analysis: the purpose of the end-of-contract allowance is to compensate for the precarious situation in which the employee was placed as a result of the use of a fixed-term contract.
Once the indemnity has been paid at the end of the contract, it cannot be called into question by a subsequent reclassification.
A consistent solution based on the reason for the payment of such allowance
This position is in line with earlier case law (see, for instance, French Supreme Court, 9 May 2001, No. 98-46.205; French Supreme Court, 13 April 2005, No. 03-41.967).
It reiterates that reclassification does not erase the fixed-term contract that was performed, nor the precarious situation experienced by the employee during its term.