- Date:
- 01 Feb 2018
- By:
- Dorothée David
The Court of Justice of the European Union (CJEU) has recently clarified its case law in relation to carrying over paid leave that has not been taken*. The case related to a UK worker who had been working on the basis of a “self-employed commission-only contract” for 12 years. When he retired, he took his employer to court for the payment of leave taken and not paid, as well as leave earned and not taken during the 12 years of his contract, as the employer had refused to pay this to him on the grounds of his self-employed status.
Having recognised that the claimant was a “worker”, in accordance with Directive 2003/88, implying the right to the payment of holiday pay, the Court of Appeal of England and Wales expressed a doubt about the possibility of cumulating paid leave in this case for the 12 years of his contractual relationship and about the right to payment in full for this leave at the end of the contract. In fact, UK law stipulates that paid annual leave can only be taken during the year in which it is due, and not carried over. As well as this, in the event of a disagreement about the payment of annual leave, the worker must first take his leave in order to be able to ask for payment for it in court, without any certainty about the success of his action. The Court of Appeal of England and Wales therefore referred the following questions to the CJEU:
Does Directive 2003/88 allow a member state to demand that a worker takes his leave before knowing if he is entitled to payment for it? No, was the CJEU’s response, pointing out that as the purpose of paid annual leave is to give the worker a period of rest, relaxation and leisure, payment for this leave must be made when the annual leave is actually taken.
Do national legislation or practices whereby a worker cannot carry over and accumulate paid leave earned and not taken until the end of the employment relationship, due to the employer’s refusal to pay it, comply with Directive 2003/88? No, was the CJEU’s response, making the following points and clarifications:
- The principle is that if a worker has not been able to take his leave, due to reasons beyond his control, he does not lose his right to paid annual leave at the end of the reference period and/or a carry-over period fixed by national law.
- As an exception to this principle, if the worker has not been able to take his paid leave because of illness for several consecutive years, the accumulation of leave cannot be unlimited due to the difficulties of organising work that this would imply for the employer. In this case, a carry-over period limited to 15 months was deemed reasonable in terms of protecting the employee’s rights and the employer’s interests (CJEU, 22 November 2011 case C-214/10).
- However, if the employer does not allow the worker to take his paid leave, for example by refusing to pay him for it, then the CJEU feels that “it must bear the consequences”. In fact, unlike if an employer is faced with periods of absence due to long-term illness, the protection of the employer’s interests is not necessary here, as the latter has profited from the fact that the worker has not interrupted his work to take annual leave.
So, in the absence of a carry-over period stipulated by law in accordance with Directive 2008/33, no limitation to the accumulation of annual leave is applicable to a worker who has not been allowed to take it by the employer, and he is therefore entitled, in this case, to the payment of leave not taken during the 12 years of the employment relationship.
* CJEU judgement of 27 November 2017, case C-214/16
