Newsitem
2021-04-28
Academic Board Review 2020: Annual leave
Jan-Pieter Vos and Luca Ratti[1]
Covid-19
What happened to the right to annual leave in 2020? Well, we didn’t exactly use it! We were in lockdowns, holiday accommodations and borders were closed or only open under severe restrictions. There was an ever-impending threat of even stricter measures. We stayed at home, waiting for this pandemic to be over.
With all this untaken leave being piled up, employers throughout Europe tried to encourage employees to take their leave nevertheless. A period of rest and relaxation was perhaps more necessary than ever, but of course employers have more than just an interest in employees taking their leave regularly. It could be that there simply wasn’t any work to do, but there are also other business interests to consider rather than simply having employees take their leave regularly.
If an employee refuses to take leave, can an employer force them? In EELC 2020/52, it turned out that a French employer could not force the employee to take so-called ‘deferred leave’ (deferred because of sickness) without any notice. The comments from other jurisdictions suggest that every country has its own approach in this regard. This is a topic which has not been regulated by the Directive,[2] and indeed, although the ECJ has imposed various limitations to the following condition, in principle “it is for the Member States to lay down, in their domestic legislation, conditions for the exercise and implementation of the right to paid annual leave, by prescribing the specific circumstances in which workers may exercise the right.”[3]
However, one could doubt whether the function of annual leave, ‘to enable the worker to rest and to enjoy a period of relaxation and leisure’, could be fulfilled.[4] Advocate General Bot argued something similar in his opinion in the Max-Planck case about an employee facing unemployment.[5] Still, one can equally argue that taking annual leave still enables a period of rest, relaxation and leisure, even if employees could not spend it in their preferred way.[6]
Annual leave before the ECJ
Last year, we ended our review with the AKT and TSN cases (C-609/17 and C-610/17), in which the ECJ held that both Article 7 of Directive 2003/88 and Article 31(2) of the Charter of Fundamental Rights of the European Union only apply to the minimum of four weeks’ holiday. The ECJ reiterated this in 2020, in Case C-119/19 P (Commission – v – Carreras Sequeros and Others), an internal staff case. The Commission’s decision to reduce certain staff holiday entitlements was not in breach of the Charter, as the remaining 24 days still exceeded the minimum. The Court’s refusal to discuss the normative content of the right to annual leave – can we reduce it? – makes that it has some additional value for the meaning of Article 31(2) as a provision of the Charter. The ECJ underlined that paid leave only comes within the scope of Article 31(2) when it concerns the minimum of four weeks’ holiday.
The scope of the right to annual leave (as well as weekly rest) was also explored in the Fetico case (C-588/18). The referring Spanish court sought clarification on whether various forms of special leave could overlap with the rights to weekly rest and annual leave. In particular, Spanish collective agreements provide for forms of special leave that are more favourable than those provided by the Spanish Labour Statute, and cover special events such as marriage, the birth of a child, hospitalisation, surgery, the death of a close relative, and the performance of representative trade union functions.
The employees claimed their right to retain both the special leave and the annual leave, in a way that annual leave is retained during sick leave. Based on the opinion by Advocate General Saugmandsgaard Øe,[7] the Court determined that the forms of special leave were “inextricably linked to working time as such, and consequently workers will not have recourse to such leave during weekly rest periods or periods of paid annual leave. Accordingly, that special leave cannot be regarded as comparable to sick leave.”[8] This allowed the ECJ to conclude that “national rules providing for special leave on days when workers are required to work which do not allow those workers to claim that leave insofar as the needs and obligations met by that special leave arise during weekly rest periods or periods of paid annual leave” fall outside the scope of application of Articles 5 and 7 of Directive 2003/88.[9]
The most important judgment on annual leave this year was the one in Joined Cases Varhoven kasatsionen sad na Republika Bulgaria (C-762/18) and Iccrea Banca (C-37/19). This judgment, which unfortunately has not been published in the English language, concerned the question whether a worker is entitled to annual leave in the period between their (unlawful) dismissal and the date of reinstatement by the court, or compensation for the leave that would have been accrued based on Article 7(2) of the Directive. Advocate General Hogan analysed the case concluding that Directive 2003/88 (Article 7(1)) and Article 31(2) of the Charter preclude national legislation or case law or practices according to which a worker is not entitled to paid annual leave for the period from the date of dismissal until the date of reinstatement.[10] Although this may be only a technicality, the Court’s considerations are interesting in a broader perspective. As a starting point, the objective of annual leave (rest, relaxation and recreation) presupposes that the employee has worked, which is why the entitlement is determined by reference to the periods of actual work.[11] The Court then went on to investigate situations in which this principle cannot be applied (such as sickness). Recalling its considerations in Dicu (C-12/17) the Court held that it has departed from this principle when an employee has been incapacitated to work, and this has not been foreseeable and beyond the worker’s control, as was the case here.[12] Given that the Court repeats these considerations, this could be a newly established rule. The pattern had become a bit scattered (sickness: yes; parental leave and short-time working arrangements: no), but in this case the ECJ appears to have given some clarification, equating the period between the date of the unlawful dismissal and the date of the employee’s reinstatement into their employment to a period of effective work.[13]
Work as a prerequisite
Quite a number of national cases dealt with work as a prerequisite for enjoying annual leave as well. In EELC 2020/10, the German Federal Labour Court changed its position from its earlier case law and held that a worker enjoying a sabbatical (unpaid special leave) did not accrue rights to annual leave as the employee had not worked. In EELC 2020/40, the same Court held something similar in a retirement scheme where the employee was still in the service of their employer but had already stopped working.
In EELC 2020/26, a Dutch court could not apply this principle to an employee put on garden leave, as Dutch law prescribes that an employee accrues annual leave if they receive a wage. The court therefore carefully navigated its way through ECJ case law and ultimately held that the leave had lapsed, relying on the ECJ’s findings in the Maschek case (C-341/15).
Better late than never
Sometimes it takes a long time for ECJ case law to settle in national case law, particularly when it concerns case law that is not directly at odds with legislative texts. EELC featured two such examples on the right to annual leave. In EELC 2020/25, the Greek Supreme Court finally applied the Schultz-Hoff and Stringer judgment (C-350/06 and C-520/06) to long-term sick leave – which wasn’t really regulated by law – and held that “an employee on sick leave which continued up until the end of his employment relationship and due to this reason he was not able to exercise his right to paid annual leave” must not deprived of such right. EELC 2020/42 saw a Romanian Court of Appeal granting employees paid leave at multiple jobs as well (before, they were only entitled to unpaid leave for those additional jobs), a conclusion that was later confirmed by the same Romanian legislator (Law no. 31 of 31 March 2020).
Outlook and preliminary questions
What do we expect in 2021? The past has taught us that interesting cases continue to find their way to EELC, so we do not expect this to be different this year. Indeed, this Issue already contains a German case report on a preliminary question (EELC 2021/11), discussing how to combine the possible lapse of accrued annual leave during sick leave after a transitional period of 15 months (KHS, C-214/10) with the duty to inform employees of such lapse (Max-Planck, C-684/16, and Kreuziger, C-619/16). Other pending questions are on the level of holiday pay during sickness, when sick pay is lower than normal pay (EELC 2020/41) and whether the allowance in lieu for untaken leave is due if the employee has terminated their employment agreement with immediate effect, but without good cause and therefore at least is partly responsible in not being able to take the holiday (EELC 2020/52). Also pending is another case (C-514/20) where the ECJ must decide whether the annual leave taken can trigger payment of higher overtime payments, since not including them could deter an employee from taking leave. We hope that the ECJ will answer at least some of these questions in 2021.
But, most of all, we hope that this year we will be able to enjoy our annual leave in the way we intend to!
[1] Jan-Pieter Vos is a Lecturer of Labour Law and PhD Candidate at the Erasmus University Rotterdam and Luca Ratti is an Associate Professor at the University of Luxembourg.
[2] Interpretative Communication on Directive 2003/88/EC of the European Parliament and of the Council concerning certain aspects of the organisation of working time, OJ 2017/C 165, p. 32.
[3] See, e.g., Max-Planck (C-684/16), para. 34.
[4] ECJ 20 January 2009, Joined Cases C-350/06 and C-520/06 (Schultz-Hoff and Stringer), para. 25.
[5] Opinion of Advocate General Bot in the Max-Planck case (C-684/16), ECLI:EU:C:2018:338, para. 61.
[6] As indicated by one of the authors in his comment to EELC 2020/52 and in an article in a Dutch journal (J.R. Vos, ‘Vakantie in tijden van Corona’, TAP 2020/131).
[7] Opinion of Advocate General Saugmandsgaard Øe in the Fetico case (C-588/18), ECLI:EU:C:2019:1083, para. 110.
[8] ECJ 4 June 2020, Case C-588/18 (Fetico and Others), para. 36.
[9] Para. 42.
[10] Opinion of Advocate General Hogan in Joined Cases Varhoven (C-762/18) and Iccrea Banca (C-37/19), ECLI:EU:C:2020:49, para. 62.
[11] Para. 58, referring to ECJ 4 October 2018, C-12/17 (Dicu), para. 28.
[12] Paras. 66-68.
[13] Para. 69.