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In three rulings pronounced on September 13th 2023 the “French High Court” aligned its position on paid leave with EU law. With these rulings, it called into question the provisions of the Labor Code that exclude or limit the accrual of paid leave for employees on sick leave and also developed its case law on the limitation of the right to paid leave.
As a reminder, the French Labor Code provides that employees do not accrue paid leave entitlement during absences due to non-work-related illnesses or accidents.
EU Law provides in opposition that all employees are entitled to at least 4 weeks’ paid leave per year, without any distinction being made as to the origin of absences for sick leave, during the accrual period, therefore including absences due to non-work-related illness or accident.
The French high court has now ruled the following:
1- Employees on sick leave still continue to accrue paid leave during the period of absence, even if the absence is not due to an accident at work or an occupational disease;
In this first decision, the French high court based its decision on EU law and rejected the French Labour Code, in order to rule that employees suffering from illness or injury of any kind (whether work-related or not) are entitled to claim paid leave entitlement by including in their accrual period the period during which they were unable to work.
2- In the event of an accident at work, the accrual of paid leave entitlement is no longer limited to the first year of absence from work;
The second case dealt with the issue of the time limit on the acquisition of paid leave by employees on sick leave due to an accident or illness of professional origin. In this case, the corresponding periods of suspension of the employment contract are treated under French law as time actually worked, but only for an uninterrupted period of one year. This law limits leave entitlement to the first year of absence from work.
The French high court ruled against this time limit.
3- The right to take paid leave is not considered to begin until the employer has given the employee the opportunity to exercise this right within a reasonable period of time.
In this third case, a freelancer had provided a service for a company for more than 10 years. After obtaining a judgment qualifying the contractual relationship as a contract of employment, she sought compensation for the paid leave she had never been able to take during those 10 years.
The question then arose as to the starting point for the limitation period for a claim for taking paid leave.
However, in application of EU law, the French high court ruled that the limitation period for paid leave indemnity can only begin to run if the employer has taken the necessary measures to enable the employee to effectively exercise her right to paid leave.
In this case, the employee had not been able to take paid leave during her 10 years with the company, as the employer had not recognized the existence of an employment contract. Consequently, the limitation period for taking the paid leave could not be considered as having begun.
The judges have here reaffirmed their support for legislative change to comply with European law. It is interesting to note that it has been 10 years since the French high court pointed out in its annual reports that the French Labor Code did not comply with the 2003 European Working Time Directive and suggested that the public authorities should clearly set out the applicable rule(s).
For the moment, the French Labor Minister has not commented on these recent decisions, of which he has simply “taken note”.
What should employers do?
It is recommended to implement measures now to comply with these decisions considering the financial consequences they may have in the event of similar litigation.
For this purpose:
- Employers must decide whether they wish to continue to comply solely with French law or to adapt to EU laws, considering that the latter will most probably be upheld by the French high court in the event of litigation;
- Depending on your decision, it is important to discuss the matter with your payroll provider to ensure that the systems are up to date and comply with the company’s new position
Should you have any questions, or should you need assistance in this matter, please do not hesitate to contact us.