Ending an Employment Contract in Monaco: Notice, Indemnities and Rupture Conventionnelle

Four ways a Monegasque contract ends

A fixed-term contract simply runs out on its date or on the event it names. An open-ended contract — the CDI — can end in one of four ways, and until 2026 there were only three:

1. Dismissal by the employer, with or without a stated reason
2. Resignation by the employee
3. Rupture conventionnelle, by written agreement approved by the Labour Inspectorate — available since 2026
4. Retirement, or termination for serious misconduct, which follow their own rules

The governing text is loi n° 729 of 16 March 1963 on the employment contract, substantially amended by loi n° 1.583 of 2 December 2025. Severance is governed separately by loi n° 845 of 27 June 1968. Monaco has no labour code, so the two have to be read together — see Employment law in Monaco for the wider framework.

Dismissal: the reason is optional, the price is not

This is where Monegasque law parts company with French law most sharply, and where advice written for France does the most damage.

A Monegasque employer may terminate a CDI without stating a motive. There is no entretien préalable, no obligation to set out a cause in the letter, and no requirement that the cause be "real and serious". What the law does instead is put a price on the absence of a valid reason.

• If the dismissal is justified by a valid reason, the employer serves notice and pays the ordinary severance.
• If it is not, article 2 of loi n° 845 adds an indemnité de licenciement equal to one day's salary for every month of service, calculated on the previous month's pay, benefits in kind included, and capped at six months' salary. It is not owed to an employee who has reached retirement age.

What remains unlawful is dismissal that is abusive — motivated by discrimination, by union activity, by the exercise of a legal right, or carried out in humiliating circumstances. That is a separate head of liability and the Tribunal du Travail awards damages for it on top of the statutory indemnities.

Notice — the délai-congé

Article 7 of loi n° 729, as amended in 2025, sets the notice the employee is owed:

Notice is dispensed with in case of faute grave. It must be delivered by registered letter with acknowledgement of receipt or by hand, and the clock starts on the date the letter is presented or the date it is handed over — not the date it was written. A collective agreement may provide longer notice, and often does.

The two indemnities, and why the names mislead

Loi n° 845 creates two indemnities whose names are, from a French perspective, inverted. Getting them the wrong way round is the most common error in guidance about Monaco.

Article 3 settles the relationship between them: they cannot be cumulated. The congédiement indemnity falls due when the dismissal takes effect and is then set off against any licenciement indemnity owed. In practice an employee dismissed without a valid reason receives the higher of the two, not the sum.

Serious misconduct

Faute grave ends the contract immediately, with no notice and no severance. Because Monaco does not otherwise require the employer to justify a dismissal, invoking faute grave is a deliberate choice to avoid paying — and one the Tribunal du Travail scrutinises closely, since the burden of proving it falls on the employer.

Rupture conventionnelle: what changed in 2026

Loi n° 1.583 of 2 December 2025 introduced the mutually agreed termination into Monegasque law. It applies to private-sector employees on an open-ended contract, and it is the first route out of a CDI that is neither a dismissal nor a resignation.

How it works

1. Meetings. One or more preliminary meetings are held. The employee may be assisted at them.
2. The agreement. Both parties sign a written convention setting out the terms of the termination, drawn up on the template annexed to arrêté ministériel n° 2025-715 of 24 December 2025.
3. Withdrawal. Either party may pull out within seven calendar days of signature, by registered letter. The parties may agree a longer period, but not a shorter one.
4. Approval. Once the withdrawal period has run, the agreement is filed with the Service de l'Inspection du Travail — online, or in duplicate by hand or registered post. The inspector has 15 working days from receipt to check that the law has been complied with and grants approval by visa.
5. Silence. No answer within 15 working days counts as tacit approval — except for protected employees such as staff representatives, where silence means refusal.

What must be paid

The agreement cannot leave the employee worse off than a dismissal would. A statutory minimum applies:

• Under two years' service — at least a quarter of a month's salary per year of seniority
• Two years and over — at least the amount that loi n° 845 would produce

The sum is payable within one month of the termination taking effect.

Because the mechanism is new, collective agreements and case law have not yet settled around it. Anyone signing one in 2026 should have the figure checked against what a dismissal would have produced, and should keep the dated copy of the signed convention — the withdrawal period runs from that date.

Resignation

An employee may resign at any time. The resignation must be unequivocal, and the employee owes the employer notice on the terms set by the contract or the applicable collective agreement. Resignation carries no severance entitlement.

What happens to the work permit

For a foreign national, the permis de travail is tied to the employer and the post, not to the person. When the contract ends the permit ends with it — loi n° 1.583 clarified this point expressly. Moving to a new employer means a fresh authorisation applied for by that employer, and residents should read the consequences for their carte de séjour alongside it: see Work permits in Monaco and The carte de séjour.

Taking a dispute to the Tribunal du Travail

Monaco's labour court is the Tribunal du Travail, created by loi n° 473 of 4 March 1948. It hears individual disputes arising from the employment contract. It is not a conseil de prud'hommes: that is a French court and it has no jurisdiction over work performed in the Principality.

The procedure

1. File a requête introductive d'instance. The form is downloaded from or collected at the Tribunal, and states the parties, their occupations, the subject of the dispute and the sum claimed.
2. Conciliation. The parties are summoned to a conciliation hearing. Attendance is expected, and each side may be assisted by a lawyer; a lawyer from a foreign bar must be accompanied by a mandated local representative at this stage.
3. Summons to judgment. If conciliation fails, a recorded-delivery letter summons the parties before the judgment panel at the Palais de Justice, 5 rue Bellando de Castro, 98000 Monaco.
4. Hearing. Each side files its case and its documents, and the other replies within the deadline set.

Tribunal du Travail — telephone (+377) 98 98 88 23, fax (+377) 98 98 81 54 Open 8.30 am–12 pm and 1 pm–5 pm on Monday and Thursday, 8.30 am–4.30 pm Tuesday to Friday

Before litigating, the Inspection du Travail at 17 rue Princesse Florestine — (+377) 98 98 87 26, inspectiondutravail@gouv.mc — will hear a complaint about unpaid wages, working time or safety, and is often the faster route. The Labour Inspectorate explains what it can and cannot do.

Related reading

• Employment law in Monaco — the statutes, hours, pay and leave
• Work permits in Monaco — hiring priority and the employer's application
• Types of employment contract — CDI, CDD and the rest
• Workplace rights in Monaco
• Cross-border workers — what termination means if you commute