Compensatory allowance in lieu of paid leave accrued during sick leave: the limitation period runs from the termination of the employment contract

Court of Cassation, Social Division, 16 September 2026, Nos. 25-12.609, 25-15.456 and 25-14.826

The three-year period available to an employee to claim payment in lieu of paid leave accrued during sick leave runs from the termination of the employment contract. The retroactive effect of the Act of 22 April 2024 (known as the “DDADUE” Act) does not alter this period, but allows claims to go back as far as 1 December 2009.

As a reminder, Act No. 2024-364 of 22 April 2024 allows employees to accrue paid leave during non-occupational sick leave, at the rate of two working days (jours ouvrables) per month, up to a maximum of 24 working days per reference period, retroactively from 1 December 2009. Where the contract is terminated before this leave has been taken, it gives rise to a payment in lieu of leave (indemnité compensatrice de congés payés), which is subject to the three-year limitation period set out in Article L. 3245-1 of the French Labour Code.

In three rulings of 16 September 2026, published in the Bulletin, the French Supreme Court (Cour de cassation) clarified how this limitation period operates:

• The period runs from the termination of the contract, not from the delivery of the final settlement statement. An employee dismissed on 9 July 2018 had received his final settlement statement (solde de tout compte) on 17 July 2018 and brought proceedings on 12 July 2021. The lower courts had relied on the date of the final settlement statement to find the claim admissible. The Court overturned this reasoning: the period ran from the dismissal, regardless of whether the employee had been informed of his rights. The claim is time-barred (No. 25-12.609).

• The retroactive effect of the Act does not reopen a period that has already expired. An employee whose contract had been terminated in September 2018 argued that he could only have brought proceedings once the Act of 22 April 2024 had come into force. The Court dismissed his appeal: this right already derived from European Union law, which could be relied upon before 2024. The period had therefore started to run upon termination and had expired by the time the employee brought proceedings in March 2024 (No. 25-15.456).

• An employee who brings proceedings within the time limit may claim back to 1 December 2009. An employee dismissed on 18 June 2021 had brought proceedings on 17 June 2024. The Employment Tribunal (conseil de prud’hommes) had limited her claim to the three years preceding the termination. The Court quashed this decision: owing to the retroactive effect of the Act, the employee is entitled to payment in lieu of leave accrued since 1 December 2009 and carried over (No. 25-14.826).

These rulings clarify how the retroactive effect of the Act of 22 April 2024 interacts with the limitation period applicable to payment in lieu of paid leave. To determine whether a former employee’s claim is time-barred, the only relevant date is now the date on which the employment contract was terminated.