Does the right to compensation for unused leave expire after a specified period of time, even if the employee could not use the leave? Can a company formally “send” employees on their due leave? These questions were answered by the Court of Justice of the European Union in its judgment of January 18, 2024 (reference number C‑218/22). In the case of the Italian official, the CJEU pointed out the requirements that must be met by national provisions regarding compensation for unused rest.
The official in question was employed by the municipality, but he resigned and took early retirement on October 1, 2016. He demanded payment of the equivalent 79 days of unused leave leisure (from 2013 – 2016). The commune refused, citing Italian regulations which stipulate that public administration employees should use their leave and are not entitled to the equivalent if they terminate the contract and do not take all the time off they are entitled to (Polish regulations differ in this respect from Italian ones and do not provide for such a limitation).
The case was brought to an Italian court, which raised doubts as to the compliance of the local provisions with EU law, in particular Directive 2003/88/EC concerning certain aspects of the organization of working time and the Charter of Fundamental Rights of the European Union. The Italian court referred questions for a preliminary ruling to the CJEU in this case.
Read also: There will be changes to the minimum wage. This year
Read also in BUSINESS INSIDER
Compensation without additional conditions?
The tribunal agreed with the Italian official. He reminded that in the event of termination of the employment relationship, the employee is entitled to compensation for unused vacation days. This results from Art. 7 section 2 of Directive 2003/88. This provision indicates only two conditions for obtaining the equivalent – termination of the employment relationship (termination of the contract) and failure by the employee to take all the rest due to himto which he was entitled upon termination of employment.
“This right is granted directly by the said directive and cannot depend on conditions other than those expressly provided for therein,” the CJEU pointed out.
Meaning that Member States may not introduce additional requirements that limit the right to an equivalent (e.g. they cannot limit such payments due to public administration employees).
When the equivalent expires
As we have indicated, Polish regulations – unlike Italian ones – do not provide for the above-mentioned restrictions on the payment of the equivalent. Therefore, from the perspective of Polish companies and employees, what is more important is not the judgment itself, only the interpretation of Community rules made by the CJEU when considering the discussed Italian case.
The Court recalled that leave should be taken – as a rule – in the year in which the right to it was acquired or “during the period of permitted transfer”. In Poland – according to the regulations – it should be granted until the end of September of the following calendar year, but in practice until the overdue leave expires, i.e. for three years counted from the end of September of the following calendar year (e.g. leave acquired in 2020 should be granted by the end of September 2021, and it will expire on September 30, 2024).
In this way, countries may establish rules for the use of leave, including the loss of the right to it after a specified period, but provided that an employee who lost the right to paid annual leave had an actual opportunity to take it. National regulations should therefore not allow an employee to lose the right to leave even though he could not use it earlier because, for example, he was on long-term sick leave. This would be contrary to Art. 7 section of the said directive.
Read also: Tax refund 2024: who will receive it fastest? Check if you are among the privileged
Can it be directed to recreation?
The CJEU also pointed out that EU regulations allow for the loss of the right to leave/compensation (after a specified period of time, in Poland the above-mentioned three years) if the company allowed the use of time off and the employee did not apply for paid annual leave intentionally and with full awareness of the consequences, what may result from this. Community law does not oblige employers to order employees to take leave, but it does provide for certain requirements in this regard.
“The employer is in particular obliged to ensure that the employee is actually able to take paid annual leave by getting him to go – if necessary, formally – to take time offwhile informing him that if the leave days were not taken, they would be forfeited at the end of the reference period or the period of permitted carryover,” the Court concluded.
In the event of a dispute regarding lost leave/compensation, it is the employer’s responsibility to prove that they allowed the employee to take the leave and informed them about the risk of losing the right to it.
2024-01-31 05:10:31
#Money #unused #leave #Important #judgment #CJEU
