Employment Contracts in France: CDI vs CDD Explained

The CDI: France’s Default Employment Contract

In France, the Contrat à Durée Indéterminée (CDI — permanent employment contract) is the norm. Article L.1221-2 du Code du travail (The employment contract of indefinite duration is the normal and general form of the employment relationship) makes this clear. Any employment relationship that does not fall within a legally recognized exception is presumed to be a CDI.

For foreign employers, this means that the default assumption under French law is diametrically opposed to systems like U.S. at-will employment. The CDI offers the employee open-ended employment with strong termination protections, making it the most secure form of contract from the employee’s perspective.

Key Features of the CDI

The CDI has no end date and continues until one party decides to terminate it — through resignation, dismissal, mutual agreement (rupture conventionnelle), or retirement. While not legally required to be in writing (unless the applicable collective agreement says otherwise), a written CDI is standard practice and highly recommended.

The CDD: A Strictly Regulated Exception

The Contrat à Durée Déterminée (CDD — fixed-term contract) can only be used in circumstances limitatively listed by law. Article L.1242-1 du Code du travail (A fixed-term contract, whatever its reason, may not have the purpose or effect of filling a position permanently linked to the normal and permanent activity of the company) prohibits using CDDs to fill permanent positions.

Permitted Grounds for a CDD

The main authorized reasons for using a CDD include:

1. Replacement of an absent employee — maternity leave, sick leave, etc.
2. Temporary increase in activity — seasonal spikes, one-off projects
3. Seasonal work — agriculture, tourism, etc.
4. Specific usage contracts — certain sectors allow CDDs by custom (CDD d’usage)
5. Waiting for a recruited CDI employee to start

Duration and Renewal Limits

A standard CDD is limited to a maximum of 18 months, including renewals (which are limited to two). Article L.1242-8 du Code du travail (The total duration of a fixed-term contract may not exceed eighteen months) sets this ceiling, though certain exceptions apply (e.g., contracts performed abroad or pending the arrival of a CDI hire).

Formal Requirements for the CDD

Unlike the CDI, the CDD must be in writing and must be signed by the employee. Article L.1242-12 du Code du travail (The fixed-term contract is drawn up in writing and includes the precise definition of its purpose) lists mandatory mentions including:

The CDD must be transmitted to the employee within two business days of hiring. Late transmission is treated as an absence of written contract.

Consequences of CDD Misuse: Reclassification as CDI

This is where foreign employers most frequently run into trouble. If a CDD is used outside the permitted grounds, exceeds the maximum duration, is not put in writing, or lacks mandatory clauses, the employee can request requalification en CDI (reclassification as a permanent contract) before the labor court (Conseil de Prud’hommes).

Article L.1245-1 du Code du travail (A fixed-term contract concluded in violation of the provisions shall be deemed to be a permanent contract) provides for automatic reclassification. The consequences include:

The Indemnité de Précarité: CDD End-of-Contract Premium

When a CDD ends at its term and is not converted to a CDI, the employee is entitled to an indemnité de précarité (precariousness premium) equal to 10% of total gross remuneration earned during the contract, pursuant to Article L.1243-8 du Code du travail. This additional cost is specific to France and must be factored into workforce planning budgets.

Certain exceptions apply: the premium is not owed when the employee refuses a CDI offer for an equivalent position, during seasonal contracts, or for CDD d’usage in certain sectors.

Practical Recommendations for Foreign Employers

When deciding between a CDI and a CDD, foreign employers should adopt the following approach:

First, default to the CDI unless there is a clear, legally valid reason for a CDD. Second, if using a CDD, ensure the contract is meticulously drafted with all mandatory clauses and a clearly stated reason. Third, track renewal dates carefully — exceeding the maximum duration or number of renewals triggers automatic reclassification. Finally, consider the rupture conventionnelle (mutual termination agreement) as a flexible exit strategy from a CDI, rather than trying to achieve flexibility through CDD misuse.

Need help navigating French employment law? DAIRIA Avocats specializes in advising foreign employers operating in France. Contact us at s.coly@dairia-avocats.com or try DAIRIA IA, our AI-powered legal assistant at dairia.ai