Leave to start a business: a refusal to reinstate can be costly for the employer

Imagine: you are an employee in Sablé-sur-Sarthe, in a carpentry company. You have had a business start-up project for months. You apply for leave to start a business (a right that allows you to be absent for up to one year to launch your activity). The employer agrees. You leave, you set up your business, but after a year, things do not go as planned. You request reinstatement. The employer replies: 'Show me that you have complied with the purpose of the leave, otherwise no return.' You cannot provide the requested evidence. The employer dismisses you. Is this legal? This is exactly the question put to the Court of Cassation in this 2005 case.

The Court ruled: leave to start a business is an absolute right for the employee, and reinstatement at the end of this leave cannot be subject to any condition. By demanding justification, the employer committed a fault. The dismissal is without real and serious cause. A decision that makes you think, especially when you know that disputes of this type are exploding in dynamic areas like Le Mans.

So, what exactly does this case law say? What are your rights if you are an employee? And if you are an employer, how to avoid this trap? Full analysis.

The facts: a story that happens every day

Mr X, a fitter at Conis Conforti (furniture manufacturing), has worked in the company since 1 October 1993. In 1997, he decides to go into business for himself. He applies for leave to start a business (Article L. 122-32-16 of the Labour Code at the time, now L. 3142-105). The employer agrees. The leave runs from 1 January to 31 December 1998. For one year, Mr X can devote himself to his project without pay, but with the guarantee of getting his job back at the end.

On 30 December 1998, Mr X writes to his employer to request reinstatement. The employer replies by letter: 'In the absence of proof of compliance with the purpose of the leave to start a business, you are required to benefit loyally from this leave by carrying out the necessary steps to start a business.' In short: prove that you have actually started a business, otherwise you do not return. Mr X does not provide the evidence. The employer dismisses him for misconduct.

Mr X brings the case before the industrial tribunal of Le Mans. He wins: the dismissal is without real and serious cause. The employer appeals. The Angers Court of Appeal reverses the judgment: in its view, the employee misused the leave for its purpose, and the dismissal is justified. Mr X appeals to the Court of Cassation. The Court of Cassation quashes the appeal judgment and refers the case back to the Rennes Court of Appeal. It firmly reminds: reinstatement is an absolute right, without condition.

The reasoning of the court — dissected

The heart of the dispute concerns Article L. 122-32-16 of the Labour Code (former). This text provides that an employee benefiting from leave to start a business is entitled to reinstatement in the company at the end of the leave. But the law says nothing about any condition of justification of compliance with the purpose of the leave. The Court of Cassation draws a simple conclusion: no text makes reinstatement subject to such a condition. Therefore, the employer cannot require it.

The lower courts (the Angers Court of Appeal) had considered that the employee must 'benefit loyally' from the leave, i.e., carry out serious steps to create his business. But the Court of Cassation reminds them that loyalty is not a legal condition. The mere fact that the employee refuses to justify does not constitute misconduct. The dismissal is therefore without real and serious cause (i.e., unfair).

This decision is a confirmation of previous case law. As early as 2001, the Court of Cassation had held that an employee on creation leave does not have to prove the success of his project (Cass. soc., 27 March 2001, No. 99-40.811). Here, it goes further: even the refusal to provide evidence does not justify dismissal. The employer must reinstate, even if it later initiates proceedings for misconduct if the employee has actually misused the leave (for example, if he worked elsewhere).

In summary: the Court protects the employee against an employer who wants to control the use of the leave. The employee's freedom to start a business prevails over the employer's right of scrutiny.

What this means for you — concretely

If you are an employee in Le Mans or elsewhere, this decision is a lifeline. You can take creation leave without fear of being refused return on mere suspicion. But be careful: if you use this leave for something else (for example, to work for a competitor), the employer can dismiss you for gross misconduct, but it must first reinstate you and then initiate proceedings. The burden of proof is on the employer.

If you are an employer, the lesson is clear: never make reinstatement subject to a condition not provided for by law. Requiring evidence is to risk a dismissal without real and serious cause, with damages at stake. Example figures: an employee with 5 years' seniority in a small business in Le Mans can obtain between 3 and 6 months' salary, i.e., about €10,000 to €20,000, not including redundancy pay.

If you are a real estate professional (agent, notary), this case law concerns you less directly, but it illustrates an important principle: an absolute right cannot be conditioned. In your contracts, be wary of clauses that add conditions not provided for by law.

Four tips to avoid this type of dispute

• For the employee: Keep all evidence of your steps (letters, quotes, registration). Even if the law does not require them, it can protect you in case of a challenge.
• For the employer: Do not refuse reinstatement without a legitimate reason. If you suspect fraud, reinstate first, then dismiss for misconduct by providing concrete evidence.
• For both: Draft a clear leave agreement, specifying the rights and obligations of each party. For example, mention that the employee undertakes to inform the employer of his steps, without this being a condition of reinstatement.
• In case of doubt: Consult a lawyer specialised in employment law before any decision. A simple poorly drafted letter can cost thousands of euros.

Further insight: related case law and developments

The Court of Cassation has confirmed this position several times. For example, in a ruling of 27 March 2001 (No. 99-40.811), it had already held that the employee does not have to prove the reality of his project. More recently, in a ruling of 4 November 2020 (No. 18-26.091), it extended this principle to sabbatical leave: the employer cannot require evidence for reinstatement.

The trend is therefore clear: judges protect the employee's right to benefit from these leaves without fear of reprisals. On the other hand, they are stricter on abuse of right: if the employee uses the leave for an unauthorised activity (for example, paid employment), dismissal for gross misconduct is possible. But the employer must prove the abuse.

For the future, we can expect case law to remain stable. The 2016 Labour Law actually reinforced employees' rights by extending the duration of creation leave (up to 2 years). Employers must therefore be extra cautious.

In practice: what to do

Checklist for the employee requesting reinstatement:

1. Send a written request (recorded delivery) to your employer at least 15 days before the end of the leave.
2. Keep a copy of your request and the proof of delivery.
3. If the employer refuses or conditions reinstatement, do not give in: bring the case before the industrial tribunal within 12 months of the refusal.
4. Gather all documents relating to your project (creation or not): this can be useful in proceedings, even if not required.

FAQ:

Can I be dismissed if my start-up project did not succeed?No, the failure of the project does not justify dismissal. You only need to have used the leave to try to create a business, not necessarily succeed.

What if my employer refuses to reinstate me without valid reason?Urgently bring the case before the industrial tribunal in interim proceedings (fast-track procedure) to obtain provisional reinstatement. You can also claim damages.

Can the employer check whether I actually created a business?No, not at the reinstatement stage. He can do so afterwards, but only if he has specific suspicions of fraud (for example, you worked for another employer).

What are the time limits to challenge an unfair dismissal?You have 12 months from the notification of the dismissal to bring the case before the industrial tribunal.

Can I take creation leave if I am on a fixed-term contract?Yes, but subject to conditions: the fixed-term contract must be of sufficient duration (generally more than one year) and the employer can refuse if replacement is problematic.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →