In three decisions handed down on 13 September 2023, the French Supreme Court took an unprecedented position reversing the previous case law concerning accrual of paid leave for employees absent from work due to sickness.

In these decisions, the French Supreme Court ruled that all employees on sick leave, regardless of whether the illness is work-related or not, must continue to accrue paid leave during the period of sickness absence.

These rulings are based on the argument that in this area French law does not comply with European law.

The French Labour Code as drafted does not comply with EU law in that it stipulates that only employees whose sickness absence is as a result of an occupational illness or accident can continue to accrue paid leave during the first full year of sick leave.  EU law makes no distinction as to the origin of the illness or accident and provides for an unlimited entitlement to accrue paid leave

In a decision handed down in 2009, the Court of Justice of the European Union ruled that employees had to accrue paid leave, including during non-work-related sickness absence, and that this right was directly applicable, meaning that each Member State in which the law was different – as is the case in France – had to comply with it.

However, France has ignored that decision and maintained its legislation, hence the ruling from the French Supreme Court.

As the decisions of 13 September are retroactive, they are a major cause for concern for companies, particularly smaller ones, as the financial impact of employee claims for accrued paid leave could prove to be very high.

Against this background, the matter was referred to the Constitutional Counsel (Conseil Constitutionnel – the highest authority responsible for examining the conformity of laws with the French Constitution) on 17 November 2023. The Conseil recently handed down its decision on 8 February 2024, ruling that the French Labour Code, which allows leave to be taken only in the event of an occupational illness and for a maximum period of one year, does not infringe the Constitution, and that French law is not contrary to the principle of equality or the right to rest, nor does it infringe the right to health protection.

Although the Conseil Constitutionnel’s decision may appear to contradict those of the French Supreme Court, the fact remains that the decisions of 13 September 2023 are clear and that France is therefore still required to comply with European law.

It is now up to the French legislator to try and find a compromise, given that a number of issues remain to be resolved, including how far back an employee can claim for accrued holiday.  This could potentially be up to 15 years (if the 2009 decision of the European Court is taken into account). Other outstanding issues include the length of the period during which paid leave can accrue while an employee is on sick leave and how long the employee can carry that leave forward. One can already anticipate difficult negotiations between employers and employees’ unions.