France: Employment & Benefits – 2025 Highlights and 2026 Outlook

Despite the lack of legislative developments in France in 2025 due to the unprecedented political instability under the Fifth Republic, the French Supreme Court issued several matters of case law worth mentioning. Some legislative changes are expected in 2026. This article outlines the key highlights of the year and looks ahead to 2026.

2025: Highlights

1. On January 21, the French Supreme Court ruled that “institutional moral harassment” falls within the scope of workplace harassment under Article 222-33-2 of the Penal Code. The case involved a major corporation whose executives implemented a company-wide policy between 2007 and 2010 aimed at destabilizing employees during a large-scale downsizing plan. This included repeated reorganizations, pressure to resign, excessive workload, intrusive monitoring, and intimidation tactics, affecting dozens of workers. The Court held that harassment does not require targeting a specific individual or interpersonal relations; it can result from deliberate corporate strategies that degrade working conditions for a group of employees. Consequently, such conduct—intended to achieve managerial or financial objectives—constitutes criminal harassment, and the executives were convicted.

2. In its rulings on September 10, the French Supreme Court aligned national law with EU standards on paid leave. First, employees who fall ill during their paid vacation are now entitled to reschedule those days, provided they notify their employer, overturning prior case law from 1996. Second, paid leave must now be included when calculating weekly working time for triggering overtime thresholds, meaning that a week with paid leave can still generate overtime pay. These changes mark a significant shift toward compliance with European labour law.

3. On March 19, the French Supreme Court clarified the use of anonymized testimonies in employment disputes. It ruled that employers may submit anonymized witness statements collected by a judicial officer when (i) such evidence is essential to exercise the right to proof, and (ii) the restriction on the principle of equality of arms is strictly proportionate. While a judicial decision cannot only rely upon anonymous testimonies, anonymized statements—where identities are known to the employer and the officer, but not disclosed to the opposing party—can be admissible if the employee can respond to the facts and the process remains fair overall. This decision strengthens employers’ ability to protect witnesses from retaliation while balancing procedural fairness.

4. In its June 18 decision, the French Supreme Court held that emails sent or received by an employee through their professional mailbox constitute personal data under Article 4 of the General Data Protection Regulation (GDPR). The case involved an employee dismissed for alleged harassment following an internal investigation, where the Court of Appeal rejected the employer’s report as evidence and awarded damages for unfair dismissal and for failure to respect data access rights. The Court confirmed that judges may freely assess the probative value of internal reports, particularly when incomplete or unreliable, and emphasized that, under Article 15 of the GDPR, employers must provide employees with access to all emails they sent or received—including metadata and content—unless disclosure would infringe others’ rights. The employer’s refusal to comply was deemed a breach, resulting in compensation for the employee.

2026: Outlook

1. Transposition of the European Pay Transparency Directive (the “Directive”) must occur on June 7, 2026. The transposition bill was slated for September 2025; however, the last consultation meeting scheduled in that month was cancelled. In this context, a revision of the current gender equality index (in force since 2019) is planned only in order to take into account the seven new indicators defined in the Directive.

2. Several measures currently contemplated for enforcement in 2026 are motivated by the goal of reducing the French public deficit to 4.7% of gross domestic product in 2026, and to less than 3% in 2029. In this respect, it is considered to increase the taxation of the mutual separation agreements and also of forced retirements. The related employer’s contribution due on the termination amounts, currently set at 30%, would be replaced by a flat-rate social contribution of 40%.

3. The legislature intends to set a ceiling to limit the duration of sick leave prescriptions, in order to better control daily allowance expenditure while ensuring more regular medical follow-up for the person on sick leave. The initial period of sick leave prescriptions would thus be limited to a maximum of 15 days (30 days if the sick leave is prescribed in hospital) and extensions would be limited to two months. Compensation for sick leave for employees who have suffered an accident at work or occupational illness would also be capped at a maximum of four years for the same incident.

4. Additional birth leave is to be created. It would be optional and available to both parents for children born or adopted on or after July 1, 2027. This leave would last for one or two months, could not be split up, and would come after maternity, paternity, or adoption leave entitlements. Compensation would be degressive, with the first month at 70% of net salary and the second month at 60%.

2026 is expected to be another demanding year for employers in France, particularly regarding termination management and the implementation of pay transparency rules—a reform that should be anticipated and leveraged as both a social and competitive advantage.