On 11 August 2026, Romania's Official Gazette (Monitorul Oficial) no. 665 published Decision no. 40 of the High Court of Cassation and Justice (ÎCCJ, Romania's supreme court), handed down on 9 March. Since publication, the interpretation has been binding on every court in the country, and for HR departments the practical consequence boils down to one point: the 18-month carry-over period no longer automatically wipes out unused annual leave days.

When an employee leaves with old days still on the balance, courts will no longer stop at the question "have 18 months passed?". The question becomes "did the employer give them a real opportunity to take the leave?". And the answer has to be proven with documents, not assumed.

What the supreme court clarified

The decision followed a referral from the Bucharest Court of Appeal, in an area where courts had reached conflicting rulings. Its binding force stems from Article 521(3) of the Code of Civil Procedure, so the ruling applies to all similar disputes over compensation for unused leave.

The ÎCCJ settled two issues:

• When the limitation period starts. The three-year period set by Article 268(1)(c) of the Code of Civil Procedure for monetary claims related to unused leave starts on the date the employment relationship ends, not on the date the right to leave arose.

• What happens to days older than 18 months. The right to cash compensation survives the end of the carry-over period if the employer did not actually give the employee the chance to take the leave. The right does lapse, however, if the employee had a real opportunity and chose not to use it.

With this ruling, Romanian practice falls in line with the case law of the Court of Justice of the European Union (CJEU), which requires employers to create concrete conditions for taking leave and to inform employees about what happens to unused days.

What stays the same in the Labour Code

The decision does not change the basic rules of the Codul Muncii (Romania's Labour Code), but they directly matter when you calculate your exposure:

• Minimum entitlement: at least 20 working days a year (Art. 145), plus at least 3 extra working days for employees in difficult, hazardous or harmful conditions, people with disabilities and young workers under 18 (Art. 147).

• Carry-over: days not taken for justified reasons must be granted within 18 months, counted from the start of the following year (Art. 146(2)). For 2026 balances, the window closes on 30 June 2028.

• Cash payment: compensation for unused leave is allowed only when the individual employment contract ends (Art. 146(3) of the Labour Code). While the employment relationship lasts, leave days cannot be converted into money.

• Splitting leave: when leave is split, every employee must be able to take at least 10 consecutive working days a year (Art. 148).

Public institutions and authorities follow a separate rule this year: under Law no. 141/2025, no cash compensation is paid for unused 2026 leave when employment or service relationships end during 2026.

Where the financial exposure concentrates

The logic in which 30 June of the second carry-over year worked as an automatic eraser no longer holds. After Decision 40/2026, expired days drop out of the calculation only if the organisation can show the employee genuinely had the chance to take them.

Combined with the new limitation rule, the consequence is broader than it looks. The three years run from the departure date, so a former employee who leaves at the end of 2026 can claim compensation until the end of 2029, including for days from older periods, if the employer has no proof that it actually offered the chance to take them. The decision does not make the right imprescriptible; it only moves the point at which the clock starts.

The risk piles up in a few predictable areas:

• Long-tenured employees. Historic balances build up mostly in hard-to-replace roles, where leave has been pushed from one project to the next.

• Understaffed or shift-based teams. Here leave requests are turned down more often for operational reasons, and repeated refusals with no alternative date are exactly the pattern that preserves the right to compensation.

• Waves of departures. Restructurings and collective redundancies mean dozens of final-pay calculations done at once, often without checking the year-by-year history.

• Contentious exits. An employee leaving in a dispute now has one more argument and three years to use it.

The exposure is not only about litigation. Employees who have been refused leave can turn to the territorial labour inspectorate (ITM) or go straight to the competent court.

What a documented "real opportunity" looks like

The decision does not come with a list of accepted documents. Still, the criteria in EU case law show what a judge will check: whether the employee was informed, whether they were concretely put in a position to take their days, and whether they knew what would happen to those days otherwise. For HR, that translates into a few verifiable practices:

• Annual leave scheduling done on time. The leave schedule for the following year must be set by the end of the current calendar year, so the 2027 calendar has to be closed by 31 December 2026. A schedule that is drawn up, communicated and acknowledged by the employee is the first piece of evidence.

• Individual notices about the balance. Regular, named communications stating the number of days left, the deadline for taking them and the consequence of not doing so. A general email sent to everyone is harder to use as evidence than an individual notice with acknowledgement of receipt.

• Reasoned and rescheduled refusals. When a request is rejected or postponed, the reason, the proposed alternative date and the employee's response stay on record.

• The 10 consecutive days, respected. A history made up only of scattered days, even though the employee asked for a continuous block, can become a weak spot in the file.

• Reconciling balances at exit. The termination procedure should include the calculation of unused days, broken down by the year in which the right arose, together with the evidence for any days the company considers it no longer owes.

It is also worth taking stock of existing balances now. Days left over from 2025 can be taken until 30 June 2027, and 2026 days until 30 June 2028, so there is still time to actually schedule them instead of seeing them turn up in a lawsuit a few years down the line.

Leave balances: an indicator worth tracking

Beyond the legal risk, accumulated days say something about the organisation. A large, persistent balance in the same team can point to a poorly distributed workload or a culture in which time off is viewed with suspicion, two conditions that fuel burnout and resignations.

Organisations that track leave balances by team and by manager can fix the problem before it becomes a retention or litigation issue. What employees say in employer reviews about work-life balance complements internal records with a signal coming straight from inside the company.

Decision 40/2026 does not ask employers for anything more than the law already required. It simply asks them to be able to prove it.