A receipt in full and final settlement is a non-compulsory certificate, issued upon the termination or expiry of an employment contract, in which the employee acknowledges that they have received all salaries, wages or allowances provided for for the final settlement of account.

Who is concerned

Any employee may issue a receipt in full and final settlement to their employer upon terminating the working relationship with the latter, regardless of the type of employment contract they have. In issuing a receipt in full and final settlement, the employee acknowledges that they have received all amounts due to them at the time their contract is terminated.

Deadlines

A receipt in full and final settlement may be issued by the employee to their employer upon the termination or expiry of their employment contract. It can be cancelled by registered letter within 3 months from the date it is signed by the employee.

How to proceed

Form of a receipt in full and final settlement

A receipt in full and final settlement is a document delivered personally or sent by post to the employer by the employee. It must be drawn up in 2 original copies, one of which is to be given to the employee.

In addition to a statement of the amounts paid to the employee, a receipt in full and final settlement must contain certain information to be valid. As such, it must:

• include the words "pour solde de tout compte" (in full and final settlement) handwritten by the employee;
• be signed by employee;
• state in legible characters that it can be cancelled within 3 months of the signing of the receipt;
• state that it was drawn up in 2 copies;
• contain details on the items of compensation and any other allowances for which it is being issued.

A receipt in full and final settlement constitutes a discharge from payment for the employer only: it is a guarantee to the employer that any salary, wage or allowance payments that were provided for in the final settlement of account were indeed made, and consequently discharges them from such payment.

If the document is incomplete it loses its power as a discharge of payment. It may, however, serve as a simple receipt for the sums referred to therein.

Contents of a receipt in full and final settlement

A receipt in full and final settlement is prepared based on the statement of salary issued by the employer at the end of each month. Upon the termination or expiry of the employment contract, the statement of account must be given to the employee, and any outstanding salary or wages paid within 5 days.

The statement, which should indicate how the salary is calculated, must contain the following information:

• the period of work;
• the total number of working hours corresponding to the compensation paid;
• the rate of compensation for the hours worked, and any other benefits in cash or in kind.

The payment of overtime and hours worked by the employee on Sundays or a statutory public holiday must be included in the statement.

In addition, the employer must specify any legal compensatory payments to which the employee may be entitled upon termination or expiry of their employment contract, such as:

• severance pay (in the case of dismissal with notice);
• compensatory allowances for leave not taken, etc.

Cancellation of the receipt

If after having signed the receipt the employee becomes aware of an error in the calculation of the amounts received or the omission of certain amounts due to them, the receipt in full and final settlement can be cancelled by registered letter within 3 months of being signed.

Reasons must be given for the cancellation, and the rights being invoked must be stated. The cancellation divests the receipt of its power as a discharge only with respect to the rights invoked.

A duly cancelled receipt has the value of a simple receipt for the sums contained therein.

Settlement agreement

The parties may find common ground at a trial or before the occurrence of any disputes through a settlement agreement with reciprocal concessions that will permanently terminate the dispute that has arisen or will arise.

The settlement agreement is a valid contract between the employer and the employee through which the parties, through reciprocal concessions, terminate a dispute that has arisen or will arise.

A settlement agreement that has definitively ended a dispute has the force of res judicata.

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