Fixed-term contracts 2026: valid grounds, duration, end-of-contract pay and reclassification

Quick answer. A fixed-term contract is allowed only for a specific lawful ground (replacement, temporary increase in activity, seasonal work, customary-use contract). Its maximum duration is generally 18 months, renewals included, with up to 2 renewals. At its end, a 10% end-of-contract premium on gross pay is due, with exceptions. A missing written contract, an unlawful ground or an overrun of the duration trigger reclassification into a permanent contract.

The fixed-term contract is an exception to the principle that employment is open-ended. The Labour Code regulates it strictly: a fixed-term contract may "neither have the object nor the effect of permanently filling a role linked to the company's normal and permanent activity" (article L1242-1). Every year we see employers face reclassification for failing one condition of form or substance. The cost is heavy: reclassification into a permanent contract, a reclassification indemnity of at least one month's salary, and adjustment of the social consequences.

Article L1242-2 of the Labour Code lists the authorised cases exhaustively. Outside this list, using a fixed-term contract is unlawful.

1. Replacing an absent employee (illness, maternity leave, paid leave, temporary part-time) or one whose contract is suspended, and replacing an employee who left before their role is abolished.
2. Temporary increase in activity: a one-off surge, an exceptional export order, an occasional non-lasting task.
3. Seasonal jobs, whose tasks recur each year with the seasons.
4. Customary-use contracts, in sectors where it is constant practice not to use permanent contracts (entertainment, hospitality, removals…).
5. Replacing a company head, a farm manager or a non-salaried partner.

The contract must state its ground precisely. A vague or inaccurate ground amounts to no ground, and opens the way to reclassification.

Some situations formally exclude a fixed-term contract (articles L1242-5 and L1242-6):

The last prohibition is often overlooked: after a redundancy, the employer may not hire on a fixed-term "increase in activity" contract for the same role for six months.

The general maximum duration of a fixed-term contract is 18 months, renewals included. Some situations follow a different duration:

The contract may have a precise term (fixed date) or an imprecise term (for example "until the replaced employee returns"), in which case it carries a minimum duration. It may be renewed twice at most (article L1243-13), provided it does not exceed the applicable maximum duration and the renewal is set out in the contract or in an amendment signed before the term.

At the end of a fixed-term contract, the employee receives an end-of-contract indemnity (precariousness premium) equal to 10% of total gross pay during the contract, renewals included (article L1243-8). A collective agreement may reduce this rate to 6% provided it offers compensation, in particular privileged access to professional training.

The premium is not due in several cases (article L1243-10):

• Conclusion of a permanent contract at the end of the term;
• The employee refusing a permanent contract for the same or a similar role, with at least equivalent pay;
• Early termination by the employee, serious misconduct or force majeure;
• Seasonal or customary-use contracts;
• Contracts with a young person during their school or university holidays;
• Subsidised contracts (apprenticeship, professional training, etc.).

When a fixed-term contract ends, the employer cannot, in principle, immediately conclude a new one on the same role: a waiting period must be observed (article L1244-3). It is calculated from the duration of the previous contract, renewal included:

• one third of the contract's duration if that duration, renewal included, is at least 14 days;
• half the contract's duration if it is under 14 days.

The period is counted in the company's working days. Some situations exempt it (a fresh absence of the replaced employee, seasonal work, customary-use contracts, early termination at the employee's initiative).

Reclassification of a fixed-term contract into a permanent one is ordered by the labour tribunal when an essential condition is missing. The most frequent causes:

• No written contract or no delivery to the employee within 2 working days of hiring;
• A missing, vague or unlawful ground;
• Overrun of the maximum duration or continuation of the relationship after the term;
• Abusive succession of fixed-term contracts to fill a permanent role;
• Failure to observe the waiting period.

Reclassification has knock-on effects: the employee is deemed permanent from day one, receives a reclassification indemnity of at least one month's salary and, on termination, dismissal compensation. Probation, in turn, follows distinct rules that we detail in our article on the probationary period in 2026.

1. Draft and deliver the contract within 2 working days: a delay alone can ground reclassification.
2. State a precise and accurate ground; for a replacement, name the replaced employee.
3. Watch the applicable maximum duration and the number of renewals (2 at most).
4. Calculate the waiting period before rehiring on the same role.
5. Provision the end-of-contract premium from signing: 10% of gross pay weighs on the real cost of the contract.
6. Check the mandatory clauses: role, ground, term or minimum duration, collective agreement, pay, supplementary pension fund.

We supported a retailer who chained "increase in activity" fixed-term contracts with the same employee, contract after contract, for nearly two years. The real purpose was to fill a permanent role without committing. The employee obtained reclassification: a retroactive permanent contract, a reclassification indemnity, various back payments. The supposed saving of the fixed-term contract turned into a lasting extra cost.

Our view: the fixed-term contract is a legitimate tool for genuinely temporary needs, but it must never be used to postpone a lasting hiring decision. As soon as one employee permanently occupies a role, the legal risk outweighs the flexibility benefit. It is then better to switch to a permanent contract — using a well-calibrated probationary period. On the accounting side, remember that the precariousness premium and any reclassification indemnities must be anticipated in labour cost.

Hayot Expertise advice. Before each fixed-term contract, ask a single question: is the need genuinely temporary and attached to one of the five lawful grounds? If yes, draft a written, dated, justified contract, delivered within two days, and provision the 10% premium. If no, the role calls for a permanent contract. For successive contracts, keep a table of dates and waiting periods: it is what protects you from reclassification.