Brussels, 08/11/2012 (Agence Europe) - EU law is not opposed to an undertaking and its works council concluding a social plan providing for the proportional reduction of the paid annual leave of a worker on short-time working.
In its ruling of Thursday 8 November in two joined cases (C-229/11 and C-230/11), the EU Court of Justice answered the Passau Labour Court (Germany), to which a case was referred regarding two workers whose working time was reduced to zero (“Kurzarbeitnull”) in the context of a one year extension of their work contracts under the “Kurzarbeit” regime, decided according to a social scheme concluded with the works council and the employer. The latter maintained that, during the given period, the persons concerned were not entitled to paid annual leave as they “were not required to work”. The German tribunal therefore asked the CJEU whether the provisions of such a social plan were in compliance with EU law. The social plan provides for annual paid leave to be reduced proportionally to the reduction in working time during a period in which the company has economic difficulties.
The Court rules that the Charter of Fundamental Rights read in combination with the working hours directive (2003/88/EC) is not opposed to such provisions. It finds that the situation of a worker whose working time has been reduced as part of a social plan is different from that of a worker on sick leave, who benefits from the right to paid annual leave in the same way as an active worker. In the context of reduced working time, the obligations of both employer and employee are, by virtue of the company agreement, suspended. Furthermore, if the employer were under an obligation to pay for paid annual leave during the period of working time reduction, that employer might be reticent to agree to a social plan providing for an extension of the working contract for purely social reasons and therefore in the interests of the worker. On the other hand, the situation of an employee whose working time has been reduced is compared to that of an employee working part time. The Court goes on to point out that, according to its case law, for a period of part time employment, the right to paid annual leave may be reduced in proportion to the reduction in working time. (FG/transl.jl)