REVERSAL OF JURISPRUDENCE : in line with European law, the French Supreme Court has established the principle that paid leaves are acquired during absences, even if it is not due to an accident at work or an occupational illness.

French Supreme Court, 13 septembre 2023, n°22-17.340 et 22-17.342 ; 22-17.638 ; 22-10.529, 22-11.106: contrary to its case law of recent years, the French Supreme Court has ruled in a series of five cases that :

• Employees who are ill or suffer accidents, even if they are not work-related, continue to acquire paid leave during their period of absence;
• In the event of an occupational accident or disease, the calculation of paid holiday entitlement is no longer limited to the first year of absence, but extends beyond that;
• The three-year statute of limitations on holiday entitlement only begins to run when the employer gives the employee the opportunity to exercise this right in good time.

This reversal is part of a trend by the French Supreme Court, which since 2013 has been recommending compliance with European law on paid leave, by transposing Article 7 of Directive 2003/88/EC, which guarantees all employees an annual period of paid leave of four weeks, regardless of whether or not they have been absent.

Until then, case law had refused to take the legislator's place, but its position had shifted in recent years (French Supreme Court, 15 September 2021, no. 20-16.010 and Versailles Court of Appeal, 18 May 2022, no. 19/03230).

This summer, the situation accelerated when the French State's liability was recognised by the Versailles Administrative Court of Appeal, which, on referral following a ruling by the Conseil d'Etat, ordered it to pay damages to trade unions for failure to transpose Directive 2003/88/EC, in particular because the Labour Code does not allow leave to be accrued in all cases where a contract is suspended (Versailles Administrative Court of Appeal, 17 July 2023, no. 22VE00442).

Since directives that have not been transposed cannot have direct effect between individuals and therefore cannot be applied in the judicial system, the French Supreme Court has adopted a broader approach, relying on the case law of the European Union relating to Article 7 of Directive 2003/88/EC, but above all on Article 31(2) of the Charter of Fundamental Rights of the European Union (which guarantees everyone the right to an annual period of paid leave, without giving further details), which has the same legal value as a Treaty, thus taking prevailing on national law.

In these rulings, the French Supreme Court, in setting out its arguments in a very well-documented manner, revises its previous position, sets aside the provisions of Articles L. 3141-3 and -5 of the Labour Code, and now considers that all employees are entitled to paid leave, regardless of the nature of the absence. For the records, under Article L. 3141-5 of the French Labour Code, the legislator only authorises paid leave to be accrued over the course of the first year in the event of an occupational illness or work accident.

In addition, in this series of rulings, the French Supreme Court also ruled that in the event of an accident at work, the calculation of paid holiday entitlement will no longer be limited to the first year of absence (Cass. soc., 13 September 2023, no. 22-17.638), and that the limitation period (three years) for paid holiday pay can only begin to run once the employer has given the employee the opportunity to exercise his right in due time (Cass. soc., 13 September 2023, no. 22-10.529).

These rulings, which are likely to be widely published, will bring major changes for companies, particularly as regards the deduction of additional days of paid leave for sick employees, which may lead to an increase of the financial provision. This should also lead to a reorganisation of HR softwares and payroll softwares.