The Court of Justice of the European Union reiterates that an employee who has been unable to take annual leave due to incapacity must be allowed to carry their untaken leave forward into a new leave year. However, employee’s do not have an unlimited time in which they can do this.
In this case (Neidel v Stadt Frankfurt Am Main (Case: C337-10)), Mr Neidel worked as a fireman. In June 2007, he went sick and didn’t return to work again before his retirement at the end of August 2009. Mr Neidel’s statutory holiday entitlement in each of the years from 2007 to 2009 was 26 days. In addition, firemen in Germany are entitled to compensatory leave for public holidays.
Furthermore, according to the applicable German legislation, Mr Neidel had, as a general rule, to take his leave within the leave year. By arrangement untaken leave could be carried forward into the following leave year but was forfeited if it had not been commenced within a period of nine months after the end of the leave year.
At the time of his retirement, under the legislation applicable to a termination of employment, Mr Neidel claimed he was owed a payment in lieu covering 86 days’ untaken statutory leave.
The EC Working Time Directive requires that Member States must provide for workers to take a minimum period of four weeks’ annual statutory leave. This equates to 20 days for someone working a five-day week. The German leave provisions provided for a more generous period of statutory leave. The Directive also states that, under normal circumstances, any untaken leave cannot be carried forward to a following leave year. Also untaken leave can never be paid in lieu except at the time of termination.
But what has the Court decided in the case of someone who is long-term sick and cannot take all the leave they are entitled to during a particular leave year? In this case, the employee is allowed to carry forward untaken statutory leave into a following leave year and to be paid in lieu of that untaken leave if they do not return to work before any of that untaken leave can be taken.
However, there are two important principles: (1) An employer cannot limit an employee’s right to an entitlement to four weeks’ annual leave being carried forward in the case of sickness, or paid in lieu at the time of termination. (2) An employer does not have to allow the same provisions in relation to any additional statutory leave over and above that required by the Directive. It will be a matter for domestic legislation to decide.
When it comes to the time limit over which untaken statutory leave, as per the Directive, can be carried forward, “the Court takes the view that any carry-over period must ensure that the worker can have, if need be, rest periods that may be staggered, planned in advance, and available in the longer term, and must be substantially longer than the reference period in respect of which it is granted. In the proceedings in question, the carry-over period laid down is nine months, that is to say a period shorter than the reference period (in this case, one year).”
In other words, in the Court’s view a nine-month carry over period was inadequate under the circumstances of the case in question. However, the Court did not go as far as saying what would have been an adequate carry over period, although all the indications are that this would seem to be longer than a leave year.
Therefore, it remains to be seen whether, for example, it would be acceptable that untaken leave for a leave year ending 31 December 2012 must be commenced by 31 March 2014. The key question is: “Would a carry over period of 15 months be acceptable as being ‘substantially longer’ than a leave year? Or would an even longer carry over period be required, perhaps as long as 18 months?”
The UK Government have promised, in due course, to amend UK law implementing the Working Time Directive to deal with issues such as untaken leave due to ill-health.