Summary
The definition of the precariousness bonus
The Labor Code indicates that at the end of a fixed-term contract, if the relationship does not continue, the employer must pay an end-of-contract indemnity.
This end-of-contract indemnity is intended to compensate for the precariousness of the situation.
This indemnity is set at a rate of 10%.
The calculation of the precariousness premium
This bonus is calculated on all the gross wages paid to the employee.
Example : An employee receives €1,500 in gross salary from March 1, 2012 to April 30, 2012. The cumulative salary is therefore €1,500 + €1,500 = €3,000.
The insecurity premium will then be €3,000 x 10% = €300.
The insecurity premium is always calculated before the compensatory indemnity for paid leave.
To remember this, a mnemonic device: precariousness as “first”!
Insecurity premium: some particularities
Here are some specifics to know about the precariousness bonus in the context of a fixed-term contract:
- the precariousness bonus must never include in the accumulation of wages any compensatory allowances for paid leave paid during the contract;
- the precariousness premium must not be calculated on travel allowances;
- it must not be calculated on the IJSS (Daily Social Security Indemnities) paid during sick leave, as indicated by a circular from the DGT of August 29, 1992;
- in the event of an industrial accident or occupational disease occurring during the CDD employment contract, the calculation of the precariousness premium must be made on the value of the wages which should have been paid (Court of Cassation of 09 October 1990);
- in the event of unjustified early termination on the part of the employer, the insecurity premium is calculated on the total wages that were to be paid.
The precariousness bonus is not due in a certain number of cases
There are 9 cases for which payment is not provided:
- For a seasonal fixed-term contract or for a fixed-term contract carried out in a sector where it is customary to use fixed-term contracts;
- For a CDD carried out within the framework of the policy of safeguarding employment (assisted contract);
- When a fixed-term contract is terminated by the employer for serious or gross negligence on the part of the employee;
- In the event of early termination of the CDD at the request of the employee;
- If at the end of the CDD contract the employee refuses a CDI (unless the proposed CDI is less favorable for the employee, for example a lower salary);
- In the event of the employee’s refusal to extend the fixed-term contract (the statement indicating automatic renewal must be present on the fixed-term contract of employment);
- If the CDD contract turns into a CDI, because the precarious nature of the contract no longer exists;
- If the rupture occurs during the trial period;
- If the CDD is carried out with a young person during his school holidays (whatever the reason for the CDD), according to the circular of the DRT of August 29, 1992.
Content updated on 02/07/2012