Bill No. 1108 on the mutual termination agreement of employment contracts
Bill No. 1108, which originally originated as a bill in the Monegasque Parliament, was returned to Parliament by the Government on Wednesday 30 April 2025.
Although the bill makes significant amendments to Law No. 729 of 16 March 1963 on employment contracts and to Law No. 677 of 2 December 1959 on working hours, it is primarily the introduction of mutual termination by agreement into Monegasque law that has made this bill so eagerly awaited. The bill provides a strict legal framework for a form of termination of employment contracts that already exists in Monegasque law but is rarely used because the mutual agreement that can currently be reached does not entitle the employee to unemployment insurance provided by France Travail.
However, if the Monaco Parliament manages to vote the bill during the current spring session or, more likely, during the upcoming fall session, the text contains transitional provisions making the entry into force of the new mutual termination agreement, subject to the conclusion by the Principality of an agreement with France allowing employees to benefit from unemployment insurance in this situation. It appears that since 27 May 2024, when the Government decided to transform the Parliament’s draft into a bill, discussions with the French counterpart have not led to an agreement on this point...
It is hoped that mutual termination agreements will help to resolve situations that are currently deadlocked, particularly in certain sectors where employers have more limited freedom to terminate employment contracts. The text provides for a demanding formal procedure, subject to review by the Labor Inspectorate, leading to a request for approval of the termination. In addition, failure to comply with certain provisions may subsequently lead to the nullity of the contractual termination. It will therefore be necessary to be meticulous, from the negotiation of the termination to the filing of the request for approval.
