Brussels, 22/11/2011 (Agence Europe) - A worker who has been unfit for work for a number of consecutive years cannot accumulate unlimited annual paid leave entitlements. Thus, national rules may set a temporal limit on the accumulation of unused entitlements to paid annual leave acquired during a period of unfitness for work. However, the period set by that limit must be substantially longer than the reference period in respect of which it is granted.
That is the substance of the ruling delivered by the Court of Justice of the EU on Tuesday 22 November (case C-214/10) in response to a question put by the Higher Labour Court, Hamm, Germany. The Hamm Labour Court was hearing a dispute between German company KHS and one of its employees, a Mr Schulte who was declared unfit for work in 2002 following a heart attack and who was in receipt of invalidity allowance until August 2008, when his employment with KHS ended. In 2009, Schulte brought an action before the German courts for payment of allowances in lieu of paid annual leave not taken in 2006, 2007 and 2008. Having been on sick leave throughout those reference periods, he had been denied the opportunity to exercise his right to paid annual leave as a result of the expiry of the carry-over period. This was because, under the collective agreement governing his employment relationship with KHS, entitlement to paid annual leave that has not been taken because of illness lapses on expiry of a carry-over period of 15 months after the end of the leave year (reference period), which is a calendar year. The German court sought the guidance of the Court of Justice on the compliance with the European working time directive (2003/88/EC) of rules such as the collective agreement in question. It says that, because of long-term incapacity, the plaintiff could accumulate his annual leave rights over a period of several years if it were possible to carry over these rights for an unlimited period of time.
In its ruling, the Court stated that, in terms of its case-law (Schulz-Hoff ruling, case C-350/06), European Union law does not preclude national legislation which entails the loss of the right to paid annual leave at the end of a reference period or of a carry-over period provided that the worker concerned has actually had the opportunity to exercise his right to such leave. In this particular instance, the plaintiff, as a worker who is unfit for work for several consecutive reference periods, would consequently be entitled to accumulate, without any limit, all the entitlements to paid annual leave that are acquired during his absence from work. However, a right to such unlimited accumulation would no longer reflect the actual purpose of the right to paid annual leave, which has the dual purpose of enabling the worker both to rest from his work and to enjoy a period of relaxation and leisure. The positive effect of paid annual leave for the safety and health of the worker is deployed fully during the reference year and during a certain later period (carry-over period), which must not be extended excessively. Indeed, when the carry-over exceeds a certain temporal limit, “annual leave ceases to have its positive effect for the worker as a rest period and is merely a period of relaxation and leisure”. Thus, “in light of the actual purpose of the right to paid annual leave, a worker who is unfit for work for several consecutive years cannot have the right to accumulate, without any limit, entitlements to paid annual leave acquired during that period”. Any carry-over period, the Court said, must take into account the specific circumstances of a worker who is unfit for work for several consecutive reference periods. Thus, the carry-over period must inter alia ensure that the worker can have, if need be, rest periods that may be staggered, planned in advance and available in the longer term. Any carry-over period must also be substantially longer than the reference period in respect of which it is granted. At the same time, that period must also protect the employer from the risk that a worker will accumulate periods of absence of too great a length. The Court considers, therefore, that a carry-over period of 15 months, as in this case, provides the worker with sufficient guarantee with regard to rest time. (FG/transl.rt)