Tax on back pay is not a prejudice

An employee cannot claim compensation from his boss because the one-off payment of back pay would have exceptionally increased his income tax.

For the Court of Cassation, there is no need to take into account the tax consequences in the calculation of compensation.

The lawsuit pitted a company against a trade union employee whose dismissal had been annulled and who had been reinstated two years later. Having received all at once the wages that should have been paid to him each month, his income tax was increased during that year. He demanded that his boss pay for this additional tax.

This increase, he said, is linked to the fault of the company which declared the dismissal void and it would not have taken place without this dismissal since the wages would have been paid monthly.

But for the judges, the compensable damage does not extend to the tax consequences of the reparation received.

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(Cass. Soc, 6.4.2022, Z 20-22.918).

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