Additional Holiday Pay: Calculation Must Not Be Less Favourable Than Retained Salary

You live in Villeneuve-lès-Avignon, in a nice house with a garden, and work for a company which, under a collective agreement, grants a few extra days of holiday based on your length of service. You take these days outside the summer period. On your payslip, you notice that the compensation paid for these days is identical to that for your annual leave, and not equal to what you would have earned if you had worked. Is this legal? The question is not trivial: it touches on the fundamental principle that an employee should not suffer a loss of earnings by taking their holiday.

The Court of Cassation, in a judgment of 11 February 1982 (No. 80-40.163), settled this point with rare clarity: the compensation due for additional holiday cannot be less than the remuneration the employee would have received if they had continued working. In other words, if your employer grants you extra days, they must pay you as if you had stayed at your post, and not merely pay the same amount as for your annual leave.

This decision, handed down over forty years ago, remains an essential reference for thousands of employees. It illustrates the vigilance of the courts in protecting purchasing power during rest periods. But be careful: the rules are not always easy to apply, especially when the company has a collective agreement providing for a different calculation. Let's decode this case together: its facts, its reasoning, and its practical consequences for you.

The Facts: A Story That Happens Every Day

Mr. X, an employee in a company in the Alès region, benefited from a company agreement granting him extra holiday days based on his length of service. These days were taken outside the normal annual leave period. Upon his departure (or during a payroll audit), he noticed that the compensation paid for these extra days was calculated on the same basis as that used for his annual leave, i.e., the so-called "1/10th" method or salary maintenance limited to what he would have received during his normal leave.

Considering this calculation less favourable than the salary he would have earned if he had worked those days, Mr. X brought a claim before the employment tribunal for additional compensation. His claim was dismissed at first instance and on appeal. The lower courts held that the compensation paid was sufficient because it corresponded to that provided for annual leave, without considering whether the retained salary during those extra days would have been more advantageous.

Mr. X then appealed to the Court of Cassation. The High Court was asked the following question: when additional holiday is granted by a company agreement, must the compensation be calculated according to the rules of Article L223-11 of the Labour Code (now L3141-24), which provides that the compensation cannot be less than the salary the employee would have received if they had worked? The Court of Cassation answered yes, quashing the appeal judgment for failure to investigate this point.

The Reasoning of the Court — Analysed

Article L223-11 of the (former) Labour Code sets out a simple principle: paid holiday compensation cannot be less than the amount of remuneration that would have been received during the holiday period if the employee had continued working. This text, which applies to all holidays, including those of a different duration from the statutory period, has been interpreted by the Court of Cassation as a rule of public policy favourable to the employee.

In this case, the Court criticised the lower courts for failing to consider whether the compensation calculated on the basis of the retained salary during the extra holiday days was more advantageous for the employee than that calculated according to the method used for annual leave compensation. In other words, they simply applied the rule without verifying the concrete result. However, the law requires that the employee does not lose money by taking their holiday: if they earn €200 per day when working, the compensation for one day of holiday must be at least €200, regardless of the calculation method for their annual leave.

The decision does not constitute a reversal or a major development, but a confirmation of the protective interpretation of Article L223-11. The employer's arguments, that the compensation was correct because it followed the same calculation method as for annual leave, were rejected. The Court considered that additional holiday constitutes a separate right, and its compensation must be autonomous, at least as favourable as the retained salary.

What This Means for You — Practically

For employees: if you are entitled to additional conventional holiday days (e.g., for length of service, or for family events), you are entitled to compensation calculated on the basis of the salary you would have received if you had worked those days. Specifically, if your daily salary is €150, the compensation for one extra holiday day must be at least €150, not the same amount as your annual leave compensation (which may be lower depending on the calculation method).

For employers: you must check your company agreements and payslips. If you pay a flat-rate compensation or one based on 1/10th of salaries received, you must compare it with the salary maintenance for those specific days. Example: in Alès, a managerial employee earning €3,000 per month (i.e., about €100 per day) takes 5 extra holiday days. If the employer pays €500 (5 x €100), that is correct. But if the employer pays €450 (because the 1/10th gives a lower amount), the employee can claim an additional €50.

For property professionals (landlords, managers): this case law does not directly concern leases, but it illustrates a general principle of protecting employees' rights. If you employ a building caretaker or concierge, ensure that their extra holiday days (e.g., for length of service) are properly compensated.

Four Tips to Avoid This Type of Dispute

• Check your company agreement: read the clauses relating to additional holiday. If they do not specify the method of calculating compensation, request an addendum or a service note clarifying that it is at least equal to the retained salary.
• Compare the two methods: for each extra holiday day, calculate what you would have received if you had worked (daily salary) and compare it with the compensation paid. If the compensation is lower, claim the difference in writing from your employer.
• Keep your payslips: they constitute proof of the calculation. In the event of a dispute, you will be able to demonstrate the difference between the retained salary and the compensation received.
• Consult a specialist lawyer: before starting proceedings, a labour law lawyer can analyse your situation and advise you on the chances of success. Sometimes a simple formal notice can settle the problem without a trial.

Further Reading: Related Case Law and Developments

The Court of Cassation reaffirmed this principle in a judgment of 23 June 2009 (No. 07-44.033), concerning additional holiday for family events. It held that the compensation due for such holiday cannot be less than the salary the employee would have received if they had worked, even if the collective agreement provides for a different calculation. The trend of the courts is therefore constant: any contractual derogation must be at least as favourable as the law.

However, a decision of 10 March 2010 (No. 08-42.876) clarified that this rule does not apply to basic statutory leave (5 weeks), already governed by Article L3141-24. For those, the calculation can be done according to the 1/10th rule or salary maintenance, at the employer's choice, provided the result is not less than the actual salary. But for additional holiday, the employer must imperatively use the salary maintenance method.

In the future, it is likely that the courts will continue to protect employees against any attempt to reduce compensation. Company agreements will therefore need to be drafted carefully to avoid litigation.

Key Points to Remember

• Which holidays are concerned? All additional holiday granted by collective agreement, custom or contract, beyond the statutory 5 weeks.
• What is the rule? Compensation for these days must be at least equal to the salary you would have received if you had worked.
• What to do in case of dispute? Gather your payslips, calculate the difference, and send a written claim to the employer. If no response, bring the matter before the employment tribunal within 2 years of the payment date.
• Can I claim back pay? Yes, for the last 3 years (three-year limitation period in labour law).

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 →