Notice Period Indemnity in Case of Unfitness: The Court of Cassation Says No

Imagine: you are a landlord in Vallauris, you rent a flat to a tenant who, for health reasons, can no longer work. He is dismissed. But who must pay the notice period? The employer? The employee? And if you are yourself an employee and find yourself in this situation, what are you entitled to? The Court of Cassation has just decided a question that was poisoning employment relations: in the case of dismissal for unfitness of non-occupational origin, the notice period indemnity is not due. A decision that seems simple, but whose consequences are very real for both employers and employees.

In this case, an employee had been declared unfit for his post after an illness. Dismissed, he claimed a notice period indemnity and related paid leave. The Court of Appeal had ruled in his favour, holding that the employer, who had not resumed payment of salary within the month following the return-to-work medical examination, owed this indemnity. But the Court of Cassation quashed this judgment, recalling that the notice period is not performed in the event of unfitness, and that no compensatory indemnity is due.

This decision is important for landlord owners, tenants and real estate professionals: it sets a clear principle. But be careful, it only concerns cases of non-occupational unfitness (illness or accident outside work). For occupational unfitness, the rules are different. Let's dive into the details.

The Facts: A Story That Happens Every Day

Mr. X had been working for several years in a company in the Grasse region. Victim of a serious illness, he was declared unfit for his post by the occupational doctor. The employer, after attempting an impossible reassignment, dismissed him for unfitness. The employee then seized the industrial tribunal to claim various indemnities, including a notice period indemnity of €15,366, plus €1,536.60 in related paid leave.

Why this claim? Because Article L.1226-4 of the Labour Code provides that if the employer does not resume payment of salary within the month following the return-to-work medical examination, the employee may be entitled to a notice period indemnity. This is what the appeal judges had held: the employer having not paid the salary during this period, the indemnity was due.

But the Court of Cassation decided otherwise. It recalled that Articles L.1226-2 and L.1226-4 of the Labour Code are clear: in the event of non-occupational unfitness and impossibility of reassignment, the employment contract is terminated without performance of the notice period. And this non-performance does not give rise to the payment of a compensatory indemnity. Regardless of whether the employer paid the salary during the month following the return-to-work medical examination: the notice period is not due.

The Reasoning of the Court — Analysed

The reasoning of the Court of Cassation is based on a strict reading of Articles L.1226-2 and L.1226-4 of the Labour Code. Article L.1226-2 provides that, for unfitness of non-occupational origin, the employer must attempt to reassign the employee. If this is impossible, he may dismiss him. Article L.1226-4 specifies that this dismissal is subject to the rules of dismissal for personal reasons, but with a particularity: the notice period is not performed and no compensatory indemnity is due.

In clear terms, the legislator wanted to avoid the unfit employee having to perform a notice period that he physically cannot assume, and the employer being dispensed from paying an indemnity for a period during which the employee cannot work. But be careful: this principle only applies to the notice period indemnity. Other indemnities (dismissal, paid leave acquired before the unfitness) remain due.

In this case, the Court of Appeal had made an error: it had considered that the employer, by not resuming payment of salary within the month following the return-to-work medical examination (as provided by Article L.1226-4 for cases where the employee is declared unfit but not yet dismissed), had to pay a notice period indemnity. But the Court of Cassation corrected this: the non-payment of salary during this period does not create a right to a notice period indemnity. This one-month period serves to protect the employee while awaiting the employer's decision, but it does not modify the rules of the notice period.

In other words, the supreme judges made a clear distinction between two situations: on the one hand, the obligation to resume payment of salary (which may give rise to damages if not respected), and on the other, the right to the notice period indemnity (which does not exist in the event of non-occupational unfitness).

What This Changes for You — Concretely

If you are an employee: you cannot claim a notice period indemnity in the event of dismissal for non-occupational unfitness. But you are entitled to the dismissal indemnity (calculated on your length of service) and paid leave acquired before the unfitness. Do not let your employer tell you otherwise. If in doubt, consult a lawyer.

If you are an employer: you do not have to pay this indemnity. But be careful: you must respect the reassignment and dismissal procedure. If you do not resume payment of salary within the month following the return-to-work medical examination (while the employee is still under contract), you could be ordered to pay damages for failure to respect this obligation. Example: an employee in Cannes, declared unfit, awaits your decision. If you do not pay his salary during this month, you risk being ordered to pay him, for example, €2,500 in damages, but no notice period indemnity.

For landlord owners: this decision has no direct impact on the lease, but it can influence the financial situation of your salaried tenant. If your tenant loses his job due to unfitness, he will not have a notice period indemnity, which may reduce his resources. You could face rent arrears. Anticipate: propose a payment schedule or direct him to social assistance.

Four Tips to Avoid This Type of Dispute

• Check the origin of the unfitness: ask for the opinion of the occupational doctor. If the unfitness is occupational (work accident or occupational disease), the rules are different: the notice period indemnity is due. Do not confuse them.
• Respect the one-month deadline to resume payment of salary: even if this does not give a right to the notice period indemnity, the employer must continue to pay the salary during this month. Failing this, he exposes himself to damages.
• Keep all evidence of the reassignment procedure: letters, job searches, employee refusals. In case of a challenge, you will have to prove that reassignment was impossible.
• Inform your salaried tenant of his rights: if he is dismissed for unfitness, advise him to consult a specialised lawyer. Good information can avoid a dispute between you.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further Reading: Related Case Law and Developments

The Court of Cassation had already ruled in this sense in a judgment of 13 March 2019 (No. 17-27.462), confirming that the notice period indemnity is not due in the event of non-occupational unfitness. The 2023 decision only confirms this position, specifying that the non-payment of salary during the month following the return-to-work medical examination does not change anything.

This case law is consistent and should not evolve in the short term. The courts are strict: the notice period is not performed, therefore no indemnity. On the other hand, the question of damages for failure to respect the one-month period remains open. undefined, I have encountered cases where the employer, thinking he was doing the right thing, paid a notice period indemnity, and then was refused reimbursement by Social Security. Be vigilant.

In Practice: What to Do

FAQ:

Can I claim a notice period indemnity if I am dismissed for non-occupational unfitness? No, the Court of Cassation confirms it: you are not entitled to it. But you can claim the dismissal indemnity and accrued paid leave.

What if my employer does not pay me the salary during the month following the return-to-work medical examination? You can take the matter to the industrial tribunal to obtain damages. But be careful: this will not give you a right to a notice period indemnity.

What are the time limits to act? You have 12 months from the termination of the contract to challenge the dismissal or claim sums. After this period, you are time-barred.

Can a landlord be affected by this decision? Indirectly, yes. If your tenant is dismissed for unfitness, his income decreases. You can help him find solutions (benefits, payment plan).

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 →