Newsitem
2022-04-20
EELC Academic Board Review 2021: Annual Leave
Jan-Pieter Vos and Luca Ratti[1]
Destination ECJ
The ECJ regularly delivers judgments on annual leave but in 2021 it was not until November that the first judgment appeared. However, then came two other judgments in less than three months, which also included almost a month of Christmas holidays.
Most cases which led to these judgments had featured in EELC already. For instance, the preliminary question in the job-medium case was discussed in EELC 2020/52 (indeed, in 2020: obviously ECJ proceedings take time): is an employee entitled to an allowance in lieu of untaken leave if they terminate their employment contract prematurely? It seems that the ECJ answered all questions about the allowance in lieu once and for all.[2] As in earlier cases, the Court held that Article 7(2) of Directive 2003/88/EC imposes two requirements only. Firstly, that the employment relationship has ended and, secondly, that the worker has not taken all the annual leave s/he was entitled to. It is not relevant who terminates the employment relationship and why. Whereas Article 7(2) provides that the minimum period of annual leave may not be replaced by an allowance in lieu except if the employment relationship ends, the ECJ has come to interpret it as a right to an allowance in lieu if all annual leave is not taken. The status of annual leave as a fundamental right prevails. The Austrian legislation which denied the employee such compensation when they terminated the employment relationship prematurely without cause will need to be adapted.
Then came the Dutch State Secretary of Finance case, first discussed in EELC 2020/41. This case dealt with the question whether a civil servant’s holiday pay during sickness should be based on ‘regular’ pay or a lower sick pay.[3] Here, the ECJ reiterated a consideration which it had used in Schultz-Hoff:[4] according to Directive 2003/88, workers who are on sick leave are to be treated equally as those who have worked. Back then, the consideration served to have sick workers accrue the same holiday entitlements as ‘healthy’ workers. In the case at issue, the same consideration stood in the way of applying a lower holiday pay to annual leave entitlements accrued during sickness. The Dutch provision at issue made the right to ‘full’ annual leave subject to the condition that the worker had worked full time, said the ECJ. The impact of the judgment is limited: Dutch employees with a ‘regular’ employment contract already enjoyed full holiday pay during sickness and, as of 2021, most civil servants have become regular employees.
As this Academic Board Review was prepared in February 2022, we could include a case from January 2022, which we had already pointed out in our review (EELC 2021/1) last year. In Koch Personaldienstleistungen GmbH, the ECJ held that annual leave taken counts as working time when determining whether the worker is eligible to additional overtime premiums.[5] In a particular month, the employee had worked many hours (including overtime) before they took annual leave. If they had worked even only normal hours instead of taking leave, they would have easily exceeded the threshold and thus become eligible for these premiums. The ECJ found that, by not counting the annual leave as working hours, the worker could be deterred from taking leave, which is in breach of the Directive. This couldn’t come as a surprise, as this has been longstanding case law; in particular, the case bears much resemblance to the ECJ’s judgment in Lock.[6]
National case law
National case law is typically influenced by ECJ case law and the cases which featured in EELC in 2021 were no exception. Of course, the way of application can sometimes be debated, but it is laudable that judges take note of relevant ECJ case law.
EELC 2021/39 featured a case before a Dutch Court of Appeal, after the judgment in first instance had already been discussed in EELC 2020/26. Initially, the discussion had centred around the Maschek case, as the Subdistrict Court essentially held that the leave entitlements of an employee who had been put on garden leave had lapsed, although the case report discussed how difficult it had been to arrive at that conclusion. The ruling in appeal was different: rather than discussing Maschek, the Court of Appeal held that the entitlements to annual leave had simply lapsed. The employee was not saved by Schultz-Hoff-based arguments that they were on sick leave most of the time, as it followed from preparatory works of the Dutch legislation on annual leave that a ‘re-integrating’ worker can take leave. It is questionable whether this interpretation would be accepted by the ECJ. In his opinion in Case C-217/20 (State Secretary of Finance), discussed above, Advocate-General Hogan considered that leave cannot lapse unless an employee has fully recovered (which is not the case with ‘re-integration’).[7] The ECJ remained silent on the issue – the case did not require the ECJ to consider the matter – but considering how it defends the rights to annual leave of employees who are on sick leave, the odds are that it will agree with the Advocate-General.[8] It should be noted that this is very much a Dutch problem, as in many EU Member States employees cannot take annual leave during sickness at all. However, it is very relevant in the Netherlands, not least because Dutch employees cannot be dismissed in the first two years of sickness, so that they accrue a lot of annual leave.
This was not the only issue that the Dutch Court of Appeal had faced in this case, as it also had to deal with the requirement to notify employees about taking their leave and informing them of the consequences if they don’t, as follows from the ECJ judgments in Kreuziger and Max-Planck-Gesellschaft.[9] This line of defence didn’t save the employee either: as they were part of the management team, notifying team members to take their holiday was one of the employee’s very own duties, which they also should have applied to themself. Interestingly, the same Issue of EELC featured a Romanian case (EELC 2021/40) where the Dolj Tribunal held something similar in the situation of a school director.
Is this the right approach? We don’t have room to deal with this issue in detail, but at least it is a practical approach. Someone must notify employees and it makes sense that the management team is responsible (although an HR department could also do the job). On the other hand, we should not forget that the right to annual leave is a fundamental right (Article 31(2) of the Charter of Fundamental Rights of the European Union), so if the employee does not bear end responsibility, shouldn’t they be informed as well? Where to draw the line? Although it is not directly relevant to the right to annual leave, perhaps we could be inspired by Article 17(1)(a) of Directive 2003/88, which provides room to disapply working time regulations for “managing executives or other persons with autonomous decision-taking powers”.
In EELC 2021/12, the Slovenian Supreme Court found against an employee who had claimed untaken annual leave upon the termination of their employment contract. According to the applicable laws, employees take their leave in the reference year, but there is a carry-over period which is (also) one year if the employee has been unable to work due to sickness. In KHS, the ECJ made clear that entitlements to annual leave can lapse in case of sickness after the expiry of the carry-over period, provided that this period is ‘substantially longer’ than the reference period, which it found to be the case with a carry-over period of fifteen months.[10] The length of the carry-over period in the Slovenian case at issue was only equal to the length of the reference period. The Slovenian Supreme Court didn’t see any problems and held that the leave entitlements had lapsed fifteen months after the end of the carry-over period – it seems to single-handedly have converted the ‘incorrect’ carry-over period to one that met the ECJ requirements.
Still, the question is whether this is the whole story. As the German comments to the case rightly indicate: how does the above-mentioned Max-Planck-Gesellschaft information duty come into play? This leads us to the next paragraph.
Pending cases
The very question which concluded the last paragraph is – still – pending with the ECJ. We had already pointed out this case last year, when it was described in EELC 2021/11. The question has been lodged by the German Federal Labour Court (Bundesarbeitsgericht) and – in short – concerns the issue of how to reconcile KHS and Max-Planck. Is it necessary to inform a sick employee that their leave entitlements will lapse? As we write this, there have been no developments in the cases, which have been assigned numbers C-518/20 (Fraport) and C-727/20 (St. Vincenz-Krankenhaus GmbH). The Bundesarbeitsgericht also submitted another question to the ECJ in Case C-120/21 (LB), in which it asked whether a standard civil limitation period can cause annual leave to lapse, even if the employer has not complied with the Max-Planck requirements. We would be very surprised if the ECJ would accept this as it was insensitive to similar arguments before: in Bauer, the ECJ refused to revoke earlier case law (i.e. Bollacke) for ‘general’ civil law principles and still granted an allowance in lieu of untaken annual leave to the heir of a deceased employee.[11]
Other pending cases are only remotely associated with annual leave. The most notable one is Case C-426/20 (Luso Temp), where Advocate-General Pitruzzella found that the principle of equal treatment requires that a temporary agency worker is entitled to the same annual leave entitlements as regular workers. It is now for the ECJ to decide.
Conclusion
2021 wasn’t a year in which we saw surprising outcomes, but it was still interesting. There is no reason to expect anything different in 2022!
[1] Jan-Pieter Vos is a lecturer and PhD candidate at the Erasmus School of Law, Rotterdam, the Netherlands and Luca Ratti is an Associate Professor at the University of Luxembourg.
[2] ECJ 25 November 2021, C-233/20, ECLI:EU:C:2021:960 (job-medium).
[3] ECJ 9 December 2021, C-217/20, ECLI:EU:C:2021:987 (Staatssecretaris van Financiën (Rémunération pendant le congé annuel payé)).
[4] ECJ 20 January 2009, C-350/06 and C-520/06, ECLI:EU:C:2009:18 (Schultz-Hoff), para. 41.
[5] ECJ 13 January 2022, C-514/20, ECLI:EU:C:2022:19 (Koch Personaldienstleistungen GmbH).
[6] ECJ 22 May 2014, C-539/12, ECLI:EU:C:2014:351 (Lock).
[7] Opinion of Advocate-General Hogan, C-217/20, ECLI:EU:C:2021:559 (Staatssecretaris van Financiën (Rémunération pendant le congé annuel payé)), para. 28.
[8] For a more detailed reasoning (in Dutch), see: J.R. Vos, ‘Vakantieloon en ziekte: meer duidelijkheid, maar niet over alles’, https://www.ar-updates.nl/commentaar/211831.
[9] ECJ 6 November 2018, C-619/16, ECLI:EU:C:2018:872 (Kreuziger) and ECJ 6 November 2018, C-684/16, ECLI:EU:C:2018:874 (Max-Planck-Gesellschaft zur Förderung der Wissenschaften).
[10] ECJ 22 November 2011, C-214/10, ECLI:EU:C:2011:761 (KHS), para. 38. See also ECJ 3 May 2012, C-337/10, ECLI:EU:C:2012:263 (Neidel), para. 41.
[11] ECJ 6 November 2018, C-569/16, ECLI:EU:C:2018:871 (Bauer); ECJ 12 June 2014, C-118/13, ECLI:EU:C:2014:1755 (Bollacke).