Paid Annual Leave : Ainsworth and others v Revenue and Customs Comrs

Ainsworth and others v Revenue and Customs Comrs: Case C-520/06
Schultz-Hoff v Deutsche Rentenversicherung Bund: Case C-350/06

ECJ: V Skouris (President), P Jann, CWA Timmermans, A Rosas, K Lenaerts, A Ó Caoimh (Presidents of Chambers)

 K Schiemann, J Makarczyk, P Kuris, E Juhász, G Arestis, E Levits, L Bay Larsen (Judges)

 V Trstenjak (Advocate General): 20 January 2009

In the first case, a claimant employee while absent from work on indefinite sick leave, receiving sick pay, informed her employer that she wished to take a period of paid annual leave. On the refusal of her request, she brought proceedings claiming entitlement to paid leave under regulations 13 and 16 of the Working Time Regulations 1998, which transposed article 7(1) of the Working Time Directive 2003/88/EC. Four other employees were absent on long-term sick leave throughout the leave year in the course of which they were dismissed, and, not having taken paid annual leave in that year, applied for payments in lieu. Their requests were refused, and they claimed entitlement to the payments in lieu under regulation 14 of the Working
Time Regulations, which implemented article 7(2) of the Directive.

 In the course of the proceedings, the House of Lords referred to the Court of Justice for a preliminary ruling the questions whether article 7(1) of Directive 2003/88 entitled employees to take paid annual leave during a period that would otherwise be sick leave, and whether article 7(2) imposed any requirements as to entitlement to or the amount of an allowance in lieu of paid annual leave where the employment relationship was terminated during the leave year during which the employee was wholly or partially absent on sick leave.

In the second case, the claimant employee was on sick leave from September 2004 until September 2005, when his employment ceased. On his employer's refusal of his request to take paid annual leave for the year 2004 as from June 2005, the applicant brought proceedings for a sum in lieu of paid leave not taken in 2004 and 2005.

Under German law and the applicable collective agreement, leave that was not taken by the end of the leave year or a further carry-over period provided for in certain circumstances, was lost, and the employer contended that the employee's entitlement to paid annual leave had been extinguished and consequently his right to an allowance in lieu had been lost also.

A preliminary ruling was sought on whether article 7(1) of Directive 2003/88 permitted national laws or practices which extinguished the entitlement to paid annual leave or an allowance in lieu, in the claimant's circumstances.

The Court of Justice held:

(1) Article 7(1) of Directive 2003/88 did not preclude national legislation or practices whereby a worker on sick leave was not entitled to take paid annual leave during that sick leave, provided that he had the opportunity to exercise the right to paid annual leave during another period.

(2) Article 7(2) of Directive 2003/88 precluded national legislation or practices whereby, on termination of the employment relationship, no allowance in lieu of paid annual leave not taken was payable to a worker who had been on sick leave for the whole or part of the leave year and/or of a carry-over period, which was the reason why he could not exercise his right to paid annual leave; and that since the allowance in lieu due to a worker who, for reasons beyond his control, had been unable to exercise his right to paid annual leave before termination of the employment relationship, was to be calculated so that the worker was put in a position comparable to that which he would have been in if he had exercised the right during his employment
relationship, his normal remuneration, which was that which had to be maintained during the rest period corresponding to the paid annual leave, was also decisive for the calculation of the allowance in lieu.

(3) Article 7(1) of Directive 2003/88 precluded national legislation or practices whereby the right to paid annual leave was extinguished at the end of the leave year and/or of a carry-over period laid down by national law even where the worker had been on sick leave for the whole or part of the leave year and where his incapacity to work had persisted until the end of his employment relationship, which was the reason why he could not exercise his right to paid annual leave.