The ECJ has given judgment in two German cases relating to the right to a payment in lieu of accrued but untaken annual leave under Article 7 of the Working Time Directive (2003/88/EC) (WTD). The ECJ has held that under the WTD, and the Charter of Fundamental Rights (the Charter), a worker does not automatically lose their accrued but untaken holiday entitlement at the end of the relevant reference period because they have failed to seek to take their holiday entitlement for that period. However, the WTD does permit the loss of holiday entitlement if the employer can show that it enabled the worker, in particular through the provision of sufficient information, to take the holiday before the end of the reference period.

If the worker has not lost their holiday entitlement, they are, accordingly, entitled to a payment in lieu of that entitlement on termination.

The ECJ has further held that the right to paid annual leave under the Charter is a directly enforceable right, including between private persons. National courts are required to interpret domestic legislation as far as possible in compliance with the WTD and the Charter. However, if that is not possible, they must disapply the offending national legislation in order to give effect to the right to paid annual leave under the Charter, which includes the right to payment in lieu on termination. (Kreuziger v Berlin (C-619/16) EU:C:2018:872and Max-Planck-Gesellschaft zur Forderung der Wissenschaften eV v Shimizu (C-684/16) EU:C:2018:874, 6 November 2018.)

Credit: PLC