Even with regard to executives, the right to annual paid leave retains its fundamental and non-waivable nature, and failure to take such leave cannot be automatically attributed to the employee solely by reason of their organizational autonomy. It is for the employer to demonstrate that it placed the executive in a position to take the leave, encouraged its use, and informed the employee of the consequences of failing to do so, for the purposes of excluding entitlement to the payment in lieu of accrued but unused leave upon termination of the employment relationship. This was clarified by the Italian Court of Cassation, Labour Section, in Order No. 32689 of 15 December 2025, addressing an issue that has, over time, given rise to differing judicial approaches.
The dispute originated from a claim brought by an executive seeking payment in lieu of accrued but unused annual leave. The employee argued that he had been unable to take his annual rest periods and, upon termination of the employment relationship, sought the monetisation of the remaining leave.
The claim had been dismissed at the previous levels of adjudication. In particular, the Court of Appeal denied the right to payment in lieu, placing emphasis on the employee’s executive position and the organizational autonomy enjoyed by him. According to the appellate judges, in the absence of evidence of exceptional, unforeseeable and unavoidable business needs that had prevented the taking of leave, the failure to use the annual rest periods was to be attributed to the executive’s autonomous choice.
This conclusion aligned with a line of case law that, in the past, had emphasized the organizational autonomy granted to executives, considering that the ability to manage the timing and methods of one’s work independently also affected the use of annual leave. From this perspective, failure to take annual leave was generally attributed to the employee’s own choice (Cass. 27971/2018; Cass. 23697/2017).
The executive challenged this decision before the Court of Cassation, alleging violations of both national and EU legislation on paid annual leave and criticizing the automatic presumption that the loss of the right derived solely from the executive status.
The Supreme Court upheld the appeal, reiterating the principle, also affirmed by the case law of the Court of Justice of the European Union, under Article 7 of Directive 2003/88/EC, according to which the right to paid annual leave constitutes a fundamental and non-waivable right, serving to protect the health and safety of the employee. Such right cannot be rendered meaningless through presumptions based solely on organizational autonomy or the position held.
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