The European Court of Justice (“ECJ”) rendered a much criticized decision on June 21, 2012, related to European employees’ rights to annual vacation. This decision marks the culmination of a 10-year line of cases increasing employees’ rights in this area.

In the context of a suit brought by Spanish labor unions, the Tribunal Supremo (Spain) asked the ECJ if “Article 7§1 of the European Directive [of 4 November 2003, related to certain aspects of the organization of working time] precludes national legislation which does not permit the full period – or the remaining period – of vacation to be taken at a later time if a worker is temporarily incapacitated when s/he is on leave”.

In other words, the question was whether an employee who was temporarily incapacitated while on vacation is entitled to postpone his/her annual paid vacation day (which must total at least 4 weeks according to the European Union rules) to a later date? The ECJ answered in the affirmative, as follows:  

  1. The entitlement of every worker to paid annual leave must be regarded as a particularly important principle of European Union social law from which there may be no derogations.
  2. The right to paid annual leave is, as a principle of European Union social law, not only particularly important, but is also expressly laid down in Article 31(2) of the Charter of Fundamental Rights of the European Union, which Article 6(1) of the Treaty of the European Union recognizes as having the same legal value as Treaties.
  3. The right to paid annual leave may not be interpreted restrictively.
  4. The purpose of entitlement to paid annual leave is to enable the worker to rest and to enjoy a period of relaxation and leisure. The purpose of entitlement to sick leave is different.
  5. It follows in particular from the purpose of entitlement to paid annual leave that a worker who is on sick leave during a period of previously scheduled annual leave has the right, at his/her request and in order that s/he may actually use his/her annual leave, to take that leave during a period which does not coincide with the period of sick leave.

As a result, the ECJ now considers, pursuant to its decision of June 21, that the point at which that temporary incapacity arose is irrelevant.

However, the ECJ did state that in view of the purpose of annual vacations and the necessities related to the organization of work, the carry-over or postponement period of annual vacation days may be limited by collective labor agreements. In this regard, the ECJ considered as reasonable a carry-over of 15 months duration.  

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As a result of this new ECJ case law, employers may legitimately fear potential misuse by certain employees of their sick leave entitlements. Previously, the French Civil Supreme Court has held (since 1996) that where an employee became sick when s/he was on annual paid vacation, the latter was not entitled, as a principle and in the absence of contrary collective labor agreements, to require the postponement or the payment of his/her vacation days. In face of a likely modification of the French case law to conform to the ECJ’s position, French employers:  

  1. could, at their own risk, consider that the ECJ’s decision may be limited to those cases where the employee suffers an actual “temporary incapacity to work”, as opposed to any other type of sick leave, in accordance with French law;  
  2. would be well-advised to work together with their legal counsel, in order to shape a strategy to limit the right to postpone the annual paid vacation days, by collective labor agreements.