France: Rights to Paid Holidays Continue To Accrue During All Types of Sick Leave
This ruling by the French Supreme Court has been expected since the European Court of Justice ruled in 2018 that Article 31 Section 2 of the European Charter of Fundamental Rights could be invoked before the national courts by parties to a labour dispute and that the national courts would then be obliged to set aside contrary national law.
For memory, Article 31 Section 2, of the European Charter of Fundamental Rights provides that all employees must benefit from paid holidays. Article 7 of the EU Directive 2003/88/CE, dated 4th of November 2003, provides that such a paid holiday must be a minimum of 4 weeks per year. Neither the Charter nor the Directive provided that such paid holidays do not accrue during employee leaves of absence (e.g., sick leave). Articles L 3141-3 and L 3141-5 of the French Labour Code, on the other hand, provide that paid holiday does not accrue during sick leave unless the sick leave is due to an occupational illness or accident, and in such a case, only during the first year of such sick leave. This, therefore, could result in employees on long-term sick leave not accruing the minimum paid holiday entitlement as set out by European law.
In its two rulings on 13 September 2023, the French Supreme Court confirmed that all types of sick leave, regardless of the cause and duration of such sick leave, give rise to the minimum paid holiday entitlement as provided by French law, i.e., 5 weeks (subject to additional rights as set out in applicable collective bargaining agreements).
In a third ruling on the same day, the French Supreme Court ruled that the time bar on such paid holiday rights (3 years) starts running from the end of the period during which such paid holidays could have been taken, i.e., from the date at which employers can justify that they have taken the necessary measures allowing employees to enjoy such paid holiday rights.
The practical and financial impact of this caselaw is still unclear and will no doubt lead to further litigation in the coming years.
Key Action Points for Human Resources and In-House Counsel
Employers should identify which employees are on long-term sick leave and seek legal advice to ensure that they have taken the necessary measures to ensure employees benefit from their paid holiday rights.