Holiday and sick leave: carry-over period for untaken holiday of nine months unlawful

Neidel v Stadt Frankfurt am Main Case C-337/10 ECJ

long-term sick leave | annual leave | holiday pay

The European Court of Justice has held that German legislation allowing for a carry-over period for untaken holiday of nine months, with the result that public servants forfeit their leave if it has not been taken within the period of nine months after the end of the leave year because of sickness, is unlawful. 

From 1970, Mr Neidel worked as a fireman in Germany, giving him the status of a public servant. From June 2007, he was unfit for service on medical grounds and he retired at the end of August 2009. 

As a fireman working irregular hours, Mr Neidel's annual leave from 2007 to 2009 was 26 days in each year. In addition, firemen are entitled to compensatory leave for public holidays. Under German law, Mr Neidel was normally required to take his leave within the year. However, the legislation allowed for a carry-over period of nine months, with the result that public servants forfeit their leave if it has not been taken within the period of nine months after the end of the leave year. Public servants are not entitled to any compensation in respect of untaken leave. 

Mr Neidel took legal action against his former employer seeking an allowance of almost €17,000 as payment in lieu of the 86 days' annual leave that he had accumulated, but not taken. The German court made a reference to the ECJ, with its questions including whether or not the entitlement to an allowance in lieu conferred by the Working Time Directive (03/88/EC) extends:

• only to the minimum annual leave of four weeks under the Directive; or
• also to any additional leave provided for by national law. 

After confirming that the rights conferred by the Working Time Directive apply in the public sector, the ECJ pointed out that, on termination of employment when it is no longer possible to take paid annual leave, the Directive entitles the worker to an allowance in lieu of annual leave. The ECJ took the view that this entitlement gave Mr Neidel, a public servant retiring on ill-health grounds, the right to an allowance in lieu of the minimum four weeks' annual leave not taken. 

However, the ECJ went on to say that, in cases where national law confers on a public servant an entitlement to further paid leave in addition to the minimum entitlement of four weeks' annual leave entitlement, the national legislation does not have to provide for the payment of an allowance in lieu if a public servant who is retiring has been unable to use that additional entitlement because he or she was prevented from working by illness. 

The ECJ also decided that the Working Time Directive does not allow a national law to restrict, by a carry-over period of nine months after which the entitlement to paid annual leave lapses, the right of a public servant who is retiring to cumulate the allowances in lieu of paid annual leave not taken because of illness. Any carry-over period must ensure that the worker can have, if needs 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. 

The ECJ concluded that the carry-over period in this case of nine months, which is a period shorter than the reference period of one year, is not permitted under the Working Time Directive. 

Additional resources

• Dominguez v Centre informatique du Centre Ouest Atlantique Case C-282/10 ECJ The ECJ has said that it is contrary to the Working Time Directive for national legislation to make entitlement to paid annual leave conditional on a worker having worked a minimum of 10 days for the same employer in the holiday year. 
• NHS Leeds v Larner [2011] IRLR 894 EAT The Employment Appeal Tribunal (EAT) held that a worker who was absent for the whole pay year and who did not submit a request for annual leave before the end of the leave year was nevertheless entitled to carry over her leave entitlement into the following year. 
• Fraser v Southwest London St George's Mental Health Trust [2012] IRLR 100 EAT The EAT held that, for an employee to claim unpaid wages in respect of annual leave during a period of sickness absence, it was necessary for her to have given formal notice of the leave and for the leave actually to have been taken. 

Case transcript of Neidel v Stadt Frankfurt am Main (on the BAILII website)