The French Civil High Court recently issued five noteworthy decisions on employees’ entitlement to accrue paid leave.
The French Labor Code requires that employees perform work to accrue paid leave.1 When an employee is on sick leave, the employment contract is suspended, so the employee does not accrue paid time off. According to the statutory provisions, the sole exception to that rule is when an employee’s contract is suspended for a continued period of one year because of a work accident or occupational disease.2 In this instance, the employee does accrue paid time off.
Article 7 of EU Directive 2003/88 states that employees are entitled to at least four weeks of annual paid leave.3
Referring to that provision, the European Court of Justice ruled that Directive 2003/88 does not make a distinction between workers who are absent from work due to sick leave and workers who have worked during the reference period set by the member state. Therefore, the European Court of Justice ruled that the right to paid annual leave conferred by Directive 2003/88 cannot be subjected to an additional condition that the worker must work during the reference period.4 Therefore, French statutory provisions on paid leave acquisition are deemed contrary to EU Law in that they prevent most employees on sick leave from accruing sick leave entitlement.
The French Civil High Court had applied the French statutory provisions, in breach of European Law.
On September 13, 2023, the French Civil High Court overruled its established case law on paid leave acquisition for employees on sick leaves through five noteworthy decisions.5 Key rulings from these cases include:
- Employees on sick leave are entitled to paid leaves while their employment contract is suspended;6
- If the employment contract is suspended due to an accident at work or occupational disease, the employee is still entitled to accrue paid leave after one year of uninterrupted work stoppage;7
- The three-year limitations period for claims for back pay in respect of outstanding paid time off can only begin to run if the employer has taken the necessary measures to enable the employee to exercise effectively their right to paid leave. In the absence of proof of such measures, the three-year limitations period applicable to claims for back pay does not apply.
These new rules significantly modify rules on the accrual and calculation of paid leave entitlements and might have important financial consequences for some French companies.
This case law is immediately applicable, and all employees or former employees who have been sick or suffering from an accident or occupational disease can claim regularization of their leave entitlements.
*Marine Koenig is a lawyer with Littler France.
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