Is this the end of mutually agreed terminations in the workplace?

Mutually agreed terminations will cost employers more starting September 1, 2023.

Mutually agreed termination is a method of terminating an employment contract that has been widely used since the end of the COVID-19 pandemic, with more than 500,000 cases recorded in 2022. However, this method may be used less frequently in the coming months, as the pension reform set to take effect on September 1, 2023, will introduce several changes for employers. The implementation of the pension reform will standardize and increase the social security contribution that employers must pay. From now on, there will no longer be any advantage to opting for this method of terminating an employment contract over retirement. 
 

In fact, the social security contribution that the employer will be required to pay will amount to 30 percent—rather than 20 percent—of the amounts paid to the employee, up to twice the annual Social Security ceiling (Pass). This doubled ceiling amounts to approximately 88,000 euros. 
 

Previously, below this threshold, a distinction was also made between employees who had reached the legal retirement age or older and other employees. For the former, the amounts received were subject to social security contributions, while for the latter, they were exempt from these contributions. With the reform, all employees will be treated the same. 
Employers will therefore no longer have any incentive to favor a voluntary termination over retirement, since, at the same time, the flat-rate social contribution applicable to retirement will be reduced from 50% to 30% of the amounts paid to the employee. However, the impact of these changes on the number of voluntary terminations remains difficult to estimate.