European Law Report - Right to annual leave
An employee does not lose his right to paid annual leave if he is unable to take such leave because of illness, the European Court of Justice has recently ruled. Any annual leave which is not taken because of the fact that the employee was on sick...
An employee does not lose his right to paid annual leave if he is unable to take such leave because of illness, the European Court of Justice has recently ruled. Any annual leave which is not taken because of the fact that the employee was on sick leave must be compensated for, the Court clarified.
Two adjudicating bodies - one based in Germany and the other in the UK - requested guidance from the European Court of Justice in the course of two separate cases, both of which revolved around a worker's entitlement or otherwise to annual paid leave, when such a worker is unable to take leave because of the fact that he is on sick leave.
In the German case, an employee was unable to exercise his right to paid annual leave on account of incapacity for work. He eventually had to retire from work because of such incapacity and sought compensation for the paid annual leave which he had not taken from his employer. German law provides that a worker's entitlement to paid annual leave that is not taken is extinguished at the end of the calendar year concerned or at the latest at the end of a defined carry-over period.
If the worker has been incapacitated for work until the end of that carry-over period, compensation by means of an allowance for any paid annual leave, which is not taken, is not permitted even if the employment relationship is terminated.
A similar claim for compensation for annual leave which was not taken during the leave year was brought before the UK's House of Lords. In this case, a worker, in the course of an indefinite period of sick leave, asked her employer if she could take, during the two months following her request, a number of days of paid annual leave.
The right of an employee to paid annual leave is enshrined in an EU law known as the working time directive. However, it is for the member states to lay down conditions for its exercise and implementation by prescribing the specific circumstances in which workers may exercise the right to paid annual leave. Member states cannot, however, make the right to annual leave subject to any preconditions whatsoever. On the other hand, the right to sick leave and the conditions for the exercise of that right are not governed by community law.
In the course of its ruling, the European Court of Justice pointed out that, notwithstanding the fact that it is up to the various member states to lay down the conditions for the application of the right to paid annual leave, the conditions for carrying over leave not taken are nevertheless subject to certain limitations.
In particular, the entitlement to annual leave of a worker on sick leave cannot be made subject to the obligation to have worked in the course of the leave year. A member state may provide for the loss of the right to paid annual leave at the end of a leave year or of a carry-over period only if the worker concerned has actually had the opportunity to exercise his right to leave, the Court affirmed.
The European Court of Justice thus concluded that an employee is still entitled to paid annual leave even if he has been on sick leave for the whole or part of the leave year and/or of a carry-over period and even if his incapacity to work has persisted until the end of his employment relationship.
The Court clarified that, in cases where the employment relationship is terminated, any compensation given to an employee instead of the paid annual leave must be so calculated so as to take into consideration the worker's normal remuneration in the course of his employment.
This judgment has clearly established the limitations imposed by EU law itself on the right of member states to cater for paid annual leave.
In particular, it leaves no doubt that any employee who is unable to exercise his right to paid annual leave as laid down in EU law, must be still afforded protection and guaranteed such right.
• Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is a visiting lecturer at the University of Malta.
mariosa@vellacardona.com
Two adjudicating bodies - one based in Germany and the other in the UK - requested guidance from the European Court of Justice in the course of two separate cases, both of which revolved around a worker's entitlement or otherwise to annual paid leave, when such a worker is unable to take leave because of the fact that he is on sick leave.
In the German case, an employee was unable to exercise his right to paid annual leave on account of incapacity for work. He eventually had to retire from work because of such incapacity and sought compensation for the paid annual leave which he had not taken from his employer. German law provides that a worker's entitlement to paid annual leave that is not taken is extinguished at the end of the calendar year concerned or at the latest at the end of a defined carry-over period.
If the worker has been incapacitated for work until the end of that carry-over period, compensation by means of an allowance for any paid annual leave, which is not taken, is not permitted even if the employment relationship is terminated.
A similar claim for compensation for annual leave which was not taken during the leave year was brought before the UK's House of Lords. In this case, a worker, in the course of an indefinite period of sick leave, asked her employer if she could take, during the two months following her request, a number of days of paid annual leave.
The right of an employee to paid annual leave is enshrined in an EU law known as the working time directive. However, it is for the member states to lay down conditions for its exercise and implementation by prescribing the specific circumstances in which workers may exercise the right to paid annual leave. Member states cannot, however, make the right to annual leave subject to any preconditions whatsoever. On the other hand, the right to sick leave and the conditions for the exercise of that right are not governed by community law.
In the course of its ruling, the European Court of Justice pointed out that, notwithstanding the fact that it is up to the various member states to lay down the conditions for the application of the right to paid annual leave, the conditions for carrying over leave not taken are nevertheless subject to certain limitations.
In particular, the entitlement to annual leave of a worker on sick leave cannot be made subject to the obligation to have worked in the course of the leave year. A member state may provide for the loss of the right to paid annual leave at the end of a leave year or of a carry-over period only if the worker concerned has actually had the opportunity to exercise his right to leave, the Court affirmed.
The European Court of Justice thus concluded that an employee is still entitled to paid annual leave even if he has been on sick leave for the whole or part of the leave year and/or of a carry-over period and even if his incapacity to work has persisted until the end of his employment relationship.
The Court clarified that, in cases where the employment relationship is terminated, any compensation given to an employee instead of the paid annual leave must be so calculated so as to take into consideration the worker's normal remuneration in the course of his employment.
This judgment has clearly established the limitations imposed by EU law itself on the right of member states to cater for paid annual leave.
In particular, it leaves no doubt that any employee who is unable to exercise his right to paid annual leave as laid down in EU law, must be still afforded protection and guaranteed such right.
• Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is a visiting lecturer at the University of Malta.
mariosa@vellacardona.com