Paid Holidays and Notice Period: The Employer Cannot Set Off the Notice Period Against Holidays Already Fixed

Imagine: you are an employee in Dax, in a timber trading company. Your employer has scheduled your paid holidays from 1^st to 31 August. But on 7 July, he makes you redundant on economic grounds, with a three-week notice period running from 13 July to 3 August. Result: your notice period falls right in the middle of your holidays. The employer considers that you were paid during this period, so no additional notice pay. You consider that the notice period should be taken outside the holidays. Who is right?

This is exactly the question put to the Court of Cassation in the judgment of 4 December 1986 (No. 84-41.693). The answer is clear: the employer cannot set off the notice period against paid holidays already fixed. It does not matter that he was authorised to put his employees on short-time working during this period. The notice period is actual work (or compensated as such), not rest.

This decision, handed down nearly forty years ago, remains a reference for all employees and employers. It reminds us that paid holidays are a fundamental right to rest, and that the notice period is a period of protection for the employee. So, what to do if you are in this situation? Analysis.

The facts: a story like many that happen every day

In 1983, the company SEEGPF, based in Saint-Paul-lès-Dax, employs several employees. As every summer, it sets the dates of paid holidays in advance: from 1 August to 31 August 1983. But business turns bad. On 7 July 1983, the company makes several employees redundant on economic grounds, with effect from 13 July. The notice period is set at three weeks, i.e. from 13 July to 3 August. However, these dates partly overlap with the planned holidays.

The employees contest. They claim additional notice pay, arguing that the employer did not respect their rights. SEEGPF argues that during this period, the employees did not work (since they were on holiday), and that it could even have put them on short-time working. Therefore, no further notice pay is due.

The Conseil de prud'hommes of Mont-de-Marsan rules in favour of the employees. The employer appeals to the Court of Cassation. The Court of Cassation upholds the judgment: the notice period cannot be set off against paid holidays already fixed. It does not matter that the employer obtained authorisation for short-time working.

The reasoning of the court — explained

The Court of Cassation relies on a fundamental principle: paid holidays were established to ensure effective rest for workers. Consequently, an employee cannot be forced to work during his holidays, and conversely, the employer cannot impose on him to 'consume' his holidays during the notice period. The notice period is a period allowing the employee to look for a new job; it must therefore take place outside rest periods.

The employer's argument, which invoked the possibility of short-time working, is dismissed. Short-time working is an economic measure that reduces working time, but it does not transform the notice period into holidays. In other words, even if the company had closed during this period, the notice period would have had to be postponed or compensated separately.

What few people know is that this decision is an application of the principle of non-set-off. It does not create a new right, but confirms consistent case law. Article L. 3141-1 of the Labour Code (which defines paid holidays) and Article L. 1234-1 (which sets the notice period) are read together: rest does not cumulate with the notice period.

In short, if the employer has already fixed the holiday dates, he cannot unilaterally modify them to coincide with the notice period. He must either postpone the notice period until after the holidays, or pay compensation in lieu of notice (which is added to the paid holiday pay).

What this means for you — practically

If you are an employee: You are protected. If your employer makes you redundant while your holidays are already scheduled, you are entitled to notice pay in addition to holiday pay. For example, in Dax, an employee with a gross salary of €2,000 per month and a one-month notice period: he will receive €2,000 notice pay + €2,000 holiday pay (if his holidays fall during this period). That is €4,000 instead of €2,000 if the employer set off.

If you are an employer: You must plan ahead. Before fixing holiday dates, check that they do not coincide with a potential notice period. If a redundancy occurs, you must either postpone the notice period (with the employee's agreement), or pay compensation in lieu. Warning: failure to do so may result in penalties from the employment tribunal, as was the case in Mont-de-Marsan.

Example in Saint-Paul-lès-Dax: An SME with 10 employees in the agri-food sector fixes summer holidays in March. In June, it must make an employee redundant on economic grounds. If the notice period falls during the holidays, the employer must pay double (notice pay + holiday pay). An oversight can cost several thousand euros.

If you are in this situation, you must: check your holiday dates, notify the redundancy after the holidays if possible, or provide for separate payment. undefined, I have come across cases where employers, through ignorance, had to repay years later.

Four tips to avoid this type of dispute

• Fix holiday dates after identifying the company's critical periods. If an economic redundancy is envisaged, first determine the notice dates, then the holidays.
• In the event of redundancy, check whether the notice period overlaps with already scheduled holidays. If so, propose to the employee to postpone the notice period (in writing) or prepare payment of compensation in lieu.
• Keep evidence of the fixing of holidays. Display the dates in the company and keep the employee's (or works council's) agreement. This will prove that the holidays were fixed before the redundancy.
• Consult a lawyer lawyer before any redundancy. A simple 30-minute consultation can avoid costly mistakes. In Dax or Mont-de-Marsan, make an appointment.

Further reading: related case law and developments

This 1986 decision is part of a protective line for employees. Already, a judgment of the Court of Cassation of 23 May 1973 (No. 72-40.714) had ruled that the notice period cannot be set off against paid holidays. Conversely, some earlier decisions admitted set-off if the employer had fixed the holidays after the redundancy. The case law has therefore stabilised: the date of fixing the holidays is decisive.

Since then, the Court of Cassation has extended this principle to other situations: the notice period cannot be set off against sick leave either (unless the employee is on sick leave for the entire notice period). The trend is clear: the notice period must be effective or compensated, without confusion with other periods.

What this means for the future: employers must be rigorous in managing dates. With the digitalisation of schedules, it is easier to avoid overlaps. But vigilance remains necessary.

What you absolutely must remember

FAQ:

• Can I be made redundant during my paid holidays? Yes, the redundancy can be notified during the holidays, but the notice period only runs after the holidays, unless otherwise agreed.
• Can my employer change my holiday dates after the redundancy? No, if the dates were fixed before the redundancy. He must respect them or postpone them with your agreement.
• What are the time limits for action? You have 5 years to claim additional notice pay before the employment tribunal.
• What if my employer refuses to pay? Refer the matter to the employment tribunal. You can also request mediation. A lawyer will help you gather evidence.
• Does this rule apply to short-term contracts? Yes, for any permanent or fixed-term contract, the principle is the same.

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