The ECJ decided that a worker must be able to carry over and accumulate rights to paid annual leave when an employer does not put that worker in a position in which he is able to exercise his right to paid annual leave.
The ECJ in King v The Sash Window Workshop stated that the right for every worker to have paid annual leave must be regarded as a particularly important principle of EU law. The purpose of that right is to enable the worker to rest and to enjoy a period of relaxation and leisure. However, a worker faced with circumstances liable to give rise to uncertainty regarding remuneration during the leave period is not able to fully benefit from that leave and such circumstances are liable to dissuade the worker from taking his annual leave. The Court notes that any practice or omission of an employer that might have such a deterrent effect is incompatible with the purpose of the right to paid annual leave.
The right to an effective remedy would not be guaranteed if, in a situation in which the employer grants only unpaid leave to the worker, the worker would be forced to take leave without pay and then bring an action to claim payment for it.
The Working Time Directive therefore precludes a situation in which the worker has to take his leave before establishing whether he has the right to be paid in respect of that leave.
The ECJ also concluded that EU law precludes national provisions or practices that prevent a worker from carrying over and, where appropriate, accumulating, until termination of his employment relationship, paid annual leave rights not exercised in respect of several consecutive reference periods because his employer refused to remunerate that leave.
The Court referred to its previous case law in the context of workers who had been prevented from exercising their right to paid annual as a result of their absence from work due to sickness, according to which a worker who has not been able, for reasons beyond his control, to exercise his right to paid annual leave before termination of the employment relationship is entitled to an allowance in lieu. In that context, in order to protect the employer from the risk that a worker will accumulate long periods of absence, and from the difficulties those periods might entail with regard to the organisation of work, the Court found that EU law does not preclude national provisions or practices limiting the accumulation of entitlements to paid annual leave by a carry-over period of 15 months, at the end of which the right is lost.
By contrast, in circumstances such as those in the present case, the Court considered that protection of the employer’s interests is not necessary The Court therefore found that unlike in a situation of accumulation of entitlement to paid annual leave by a worker who was unfit for work due to sickness, an employer that does not allow a worker to exercise his right to paid annual leave must bear the consequences. The fact that an employer might consider, wrongly, that the worker was not entitled to paid annual leave is irrelevant.
As a result, in the absence of any national statutory provision establishing a limit to the carry-over of leave in accordance with the requirements of EU law, to accept that the worker’s acquired entitlement to paid annual leave could be extinguished would amount to validating conduct by which an employer was unjustly enriched to the detriment of the purpose of that Directive.
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