On 13 September 2023, The French Court of Cassation issued two rulings (Cass.soc.13 September 2023 no. 22-17340 and 22-17638) in order to comply with European law. These rulings are introducing significant modifications to the way employees accrue paid leave entitlement while they are not working.
An employee on work stoppage now accrues paid leave entitlement:
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Before on 13 September 2023:
Employees used to accrue 2.5 days of holiday per month of effective work over the reference period from 1 June of the current year to 31 May of the following year.
The Labour Code did not treat non-occupational illness as actual working time. The employee was therefore not entitled to paid leave. However, where an employment contract was suspended for up to one year due to occupational illness or a work-related accident, this time was considered to be effective time at work and employees accrued paid leave.
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From 13 September 2023:
Employees who are absent due to illness (whether work-related or not) accrue exactly the same paid leave entitlement as employees who carry out effective work during the same period.
In two rulings, The Court of Cassation ruled that the provisions of The Labour Code had to be set aside because they are deemed not to comply with those of European Union law, which makes no distinction during a reference period between an employee on sick leave and one who works.
Even if the position of The Court of Cassation may seem contestable or unfair, it is binding for all companies employing staff in France since 13 September 2023. Companies must apply it unless they are willing to accept the associated risk of litigation.
Given that case law is retroactive, employees or former employees who were off sick before 13 September 2023 could, over a period of three years, claim back pay for paid leave that they had not accrued.
The rulings have consequences which are difficult for companies to control, which is why we need to be concerned about it.
In addition to requiring modification of payroll software, it is recommended that companies carry out an audit to identify the potential financial impact of the rulings.
Contact us. Our teams are available to answer any questions you may have.
