OD FLASH | Retirement allowance: limitation period begins on the effective date of termination of the contract

Cour de cassation, chambre sociale, 10 décembre 2025, n° 24-12.066
In this case, an employee was notified of his retirement by his employer. The contract continued during the notice period. The employee subsequently brought the case before the labour court, in particular to obtain a back payment of retirement compensation.

However, the Court of Appeal ruled that the employee’s claim for retirement compensation was time-barred. As a reminder, the limitation period is determined by the nature of the claim, and a claim for retirement compensation is compensatory in nature and subject to a limitation period of 12 months. The Court of Appeal therefore considered that retirement compensation, being compensatory in nature, was subject to a limitation period of one year from the date of notification of termination, in accordance with the provisions of Article L. 1471-1 of the Labour Code, i.e. in this case from 20 January 2020.

Considering that the Court of Appeal had not sought the effective date of the termination of his employment contract, the employee lodged an appeal with the Court of Cassation. He argued that the collective agreement provided that retirement compensation was due ‘on the day of departure’. Therefore, in the event of retirement by the employer, the termination of the contract does not take place on the date of notification, but at the end of the notice period. The starting point of the limitation period should therefore be set at that date, making his action admissible.

In a ruling dated 10 December 2025, the Social Chamber of the Court of Cassation upheld the employee’s appeal on this point, considering that, in the event of retirement by the employer, the termination of the employment contract occurs on the date of expiry of the contract – i.e. at the end of the notice period – and not on the date of notification of the employer’s decision to retire the employee. Consequently, the one-year limitation period began to run at the end of the notice period, i.e. on 20 May 2020, and the claim for retirement compensation filed on 1 February 2021 was therefore not time-barred.