ECJ Strengthens Right to Paid Annual Leave

Oct 14, 2022 Benn-Ibler Rechtsanwälte

The European Court of Justice (ECJ) is boosting the rights of employees with regard to the expiry of employee leave entitlement. If an annual leave entitlement is acquired during a year in which work is carried out before an employee’s continuous incapacity for work or earning incapacity occurs, employee leave entitlement is only forfeited if the employer did remind the employee to take their leave.

In the original case before the German Federal Labour Court, a cargo driver at Frankfurt Airport had been receiving a disability pension since 1 December 2014. He sued Fraport AG for a settlement that would entitle him to 34 days of paid annual leave in 2014, which he had been unable to take due to his medical condition. Moreover, Fraport had not fulfilled its obligation to cooperate by reminding him to take his leave.

The lower courts did not uphold the action because the claims were by then time-barred.

Under German law, leave entitlements expire 15 months after the end of the leave year in the case of continued incapacity for work. The ECJ has already ruled in the past that this is, in principle, also in conformity with EU law (specifically with Art 7 of the Working Time Directive, 2003/88/EC). The court justified this ruling by stating that an unlimited accumulation of leave entitlement for periods in which an employee is unable to take their leave for reasons of illness should be prevented.

However, the distinctive aspect of the original proceedings was that, on the one hand, there had been no encouragement by the employer for the employee to take his leave and, on the other hand, that the asserted claims had arisen in a leave year in which the employee had not been incapable or mostly incapable to work. In such a situation, according to the ECJ, there is no danger of an unlimited accumulation of leave entitlement.

ECJ C-518/20 and C-727/20 (22 September 2022)