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<p>Notice period compensation: can an employee accumulate their new salary?</p>
Droit-immobilier

<p>Notice period compensation: can an employee accumulate their new salary?</p>

📅 Decision of 25 April 2026🔄 Updated on 18 October 2026⚖️ Cour de cassation👁️ 62 views📖 4 min read

<p>An employee who is dismissed must receive the full amount of their payment in lieu of notice, even if they find new employment immediately after leaving. The Court of Cassation reminds that it is the employer who has rendered itself unable to provide work, and the employee cannot be penalised.</p>

Reference Decision: cc • No. 75-40.359 • 1976-06-16 • View the decision →

Picture the scene: you are an employee in Grasse, working for a perfume company. You are told that your workshop is closing. Economic redundancy. You have more than two years' service, therefore you are entitled to two months' notice. But your employer tells you: "You found another job almost immediately, so I will only pay you one month's pay in lieu of notice." Is this lawful? The question that every employer or employee asks: can pay in lieu of notice be accumulated with the salary from one's new job? This decision of the Court of Cassation of 16 June 1976 answers clearly: yes, the employee is entitled to the full amount of the payment in lieu, regardless of whether they have found new employment. In short, the employer cannot reduce the payment on the grounds that the employee has suffered no loss. Let us analyse this case.

The Facts: An Everyday Story

Mr X had worked for several years for the company Bres, a cosmetics manufacturer based in Cagnes-sur-Mer. In 1975, the company decided to close a workshop and dismissed Mr X for economic reasons. By virtue of his service exceeding two years, he was entitled to a period of notice of two months pursuant to Article L. 122-6 of the Labour Code (now Article L. 1234-1). The employer paid him pay in lieu of notice corresponding to only one month, arguing that Mr X had found employment with a new employer almost immediately after his dismissal. The company considered that, since he had suffered no loss of salary during the second month, he was not entitled to this payment. Mr X brought the matter before the Conseil de prud'hommes (Employment Tribunal) of Grasse to claim payment of the missing month. The judgment found in his favour. The company Bres appealed, but the Court of Cassation upheld the decision of the lower courts. The reasoning is inexorable: it was the employer who terminated the contract and who placed itself in a position where it was unable to provide work. It is irrelevant that the employee found other employment elsewhere; the pay in lieu of notice is due in full.

The Reasoning of the Court — Analysed

In its judgment of 16 June 1976 (No. 75-40.359), the Court of Cassation relied upon Articles L. 122-6 and L. 122-8 of the Labour Code (now Articles L. 1234-1 and L. 1234-5). These provisions stipulate that a dismissed employee is entitled to a period of notice, the length of which depends on their length of service, and that, failing the performance of the notice period, the employer must pay compensation in lieu. The central point is as follows: the obligation to pay the compensation arises from the fact that the employer is the originator of the termination. "It is the company which dismissed him that placed itself in a position where it was unable to provide him with any work," the judges wrote. In other words, the cause of the non-performance of the notice period is attributable to the employer, not the employee. The latter did not refuse to work; he simply did not have the opportunity to do so. Consequently, the benefit he derives from new employment cannot be used to reduce the compensation. This would be a double penalty: the employee loses his job, and, on top of that, part of his compensation is withheld because he had the good fortune to find work quickly. The Court rejected the employer's argument that pay in lieu of notice is compensatory in nature (to remedy a loss). It affirmed that it is a fixed-sum payment, due as of right as soon as the employer fails to provide work for the employee during the notice period. This reasoning has been consistently applied since this decision: pay in lieu of notice is deferred salary, not compensation for loss of opportunity.

What This Means for You — In Practical Terms

For employees: if you are dismissed and entitled to a notice period, you must receive the full amount of pay in lieu, even if you find another job the very next day. For example, in Grasse, an employee in the perfume industry with 5 years' service, made economically redundant, is entitled to two months' notice (approximately €6,000 based on a salary of €3,000). If they find a new job after one week, the employer cannot reduce the payment pro rata. They must pay the full €6,000. For employers: do not make the mistake of withholding part of the payment on the grounds that the employee has a new job. You would be ordered to pay the balance, plus statutory interest (the rate is fixed annually, currently around 4.5% in 2024). In practice, the Conseil de prud'hommes of Grasse applies this rule strictly. If you are a landlord (for example, of commercial premises in Cagnes-sur-Mer), the m

Legal information

  • Number: 75-40.359
  • Court: Cour de cassation

Keywords

indemnité compensatrice de préavispréavislicenciementCour de cassationcumul salaire

Practical use cases

1

Dismissed employee finding new job quickly

Mr Dupont, an employee in Grasse with 5 years' service, is made redundant. He finds a new job a week later. His employer pays him only one month's notice pay out of the two to which he is entitled.

Practical application:

Mr Dupont can claim the second month's indemnity before the employment tribunal. He must keep all documents (dismissal letter, employment contract, proof of new job) and act within 2 years. The employer is obliged to pay the full amount, regardless of the new salary.

2

Employer attempting to reduce indemnity

A perfume company in Cagnes-sur-Mer dismisses a female employee with 3 years' service. It offers her a reduced notice pay of half, arguing that she has found another job.

Practical application:

The employer is at fault. The employee should refuse to sign any receipt and consult a lawyer. She can obtain the balance with statutory interest. The employer risks an order to pay costs.

3

Landlord terminating a commercial lease

A landlord in Grasse terminates the commercial lease of his tenant to sell the premises. The tenant leaves the premises before the end of the 6-month notice period and finds another premises. The landlord wants to reduce the compensation for eviction.

Practical application:

By analogy, the landlord must pay the full compensation for eviction, even if the tenant has found other premises. The principle is the same: the termination is attributable to the landlord. The tenant should consult a lawyer specialising in property law.

Maître Cécile Zakine

About the author

Maître Cécile Zakine — Lawyer at the Alpes-Maritimes Bar, Doctor of Law. Every article in this magazine is based on the analysis of a real court decision, commented and put into perspective by Maître Zakine’s team.

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Disclaimer: The analysis presented on this site is for informational purposes only and does not constitute personalised legal advice. For advice tailored to your situation, contact a qualified lawyer.

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