Article 31 - Fair and just working conditions
Article 52 - Scope and interpretation
Key facts of the case:
Reference for a preliminary ruling – Social policy – Directive 2003/88/EC – Article 7 – Article 31(2) of the Charter of Fundamental Rights of the European Union – Allowance in lieu of days of leave not taken at the end of the employment relationship – National legislation prohibiting payment of that allowance in the event of the voluntary resignation of a public servant – Control of public expenditure – Organisational needs of the public employer.
Outcome of the case:
On those grounds, the Court (First Chamber) hereby rules:
Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time and Article 31(2) of the Charter of Fundamental Rights of the European Union must be interpreted as precluding national legislation which, for reasons relating to the control of public expenditure and the organisational needs of the public employer, prohibits the payment to a worker of an allowance in lieu of the days of paid annual leave acquired, during both the last year of employment and previous years, which were not taken at the date on which the employment relationship ended, where that worker voluntarily terminates that employment relationship and has not shown that he or she had not taken his or her leave during that employment relationship for reasons beyond his or her control.
16 In those circumstances, the Tribunale di Lecce (District Court, Lecce) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) Should Article 7 of Directive [2003/88] and Article 31(2) of the [Charter] be interpreted as precluding national legislation, such as that at issue in the main proceedings (namely Article 5(8) of [Decree-Law No 95] …), which, for reasons of public expenditure containment and organisational requirements of the public sector as employer, does not permit the monetisation of leave in the event that an employee in the public service resigns?
(2) If the answer [to the first question] is in the affirmative, must Article 7 of Directive [2003/88] and Article 31(2) of the [Charter] be interpreted as requiring the employee in the public service to demonstrate that it was impossible for him/her to take the leave concerned in the course of the employment relationship?’
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24 By its two questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 7 of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding national legislation which, for reasons relating to the control of public expenditure and the organisational needs of the public employer, prohibits the payment to a worker of an allowance in lieu of days of paid annual leave acquired, during both the last year of employment and previous years, which were not taken at the date of termination of the employment relationship, where that worker voluntarily terminates that relationship and has not shown that he or she had not taken his or her leave during that employment relationship for reasons beyond his or her control.
26 Thus, Article 7(1) of Directive 2003/88, which provides that Member States are to take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice, reflects and gives effect to the fundamental right to a period of paid annual leave enshrined in Article 31(2) of the Charter (see, to that effect, judgment of 25 November 2021, job-medium, C‑233/20, EU:C:2021:960, paragraph 25 and the case-law cited).
42 In that regard, it must be borne in mind that limitations may be imposed on the right to paid annual leave provided that the conditions laid down in Article 52(1) of the Charter are complied with, namely that those limitations are provided for by law, respect the essence of that right and, subject to the principle of proportionality, are necessary and genuinely meet objectives of general interest recognised by the European Union (judgment of 22 September 2022, LB (Limitation period for the right to paid annual leave), C‑120/21, EU:C:2022:718, paragraph 36 and the case-law cited).
43 In the present case, the limitation at issue in the main proceedings on the exercise of the fundamental right referred to in Article 31(2) of the Charter is provided for by law, more specifically by Article 5(8) of Decree-Law No 95.
47 In addition, it should be borne in mind that the Member States may not derogate from the principle flowing from Article 7 of Directive 2003/88, read in the light of Article 31(2) of the Charter, that the right to paid annual leave acquired cannot be lost at the end of the leave year and/or of a carry-over period fixed by national law, when the worker has been unable to take his or her leave (see, to that effect, judgment of 6 November 2018, Max-Planck-Gesellschaft zur Förderung der Wissenschaften, C‑684/16, EU:C:2018:874, paragraph 54).
48 However, where the worker has refrained from taking his or her paid annual leave deliberately and in full knowledge of the ensuing consequences, after having been given the opportunity actually to exercise his or her right thereto, Article 31(2) of the Charter does not preclude the loss of that right or, in the event of the termination of the employment relationship, the corresponding absence of an allowance in lieu of paid annual leave not taken, without the employer being required to force that worker to actually exercise that right (see, to that effect, judgment of 6 November 2018, Max-Planck-Gesellschaft zur Förderung der Wissenschaften, C‑684/16, EU:C:2018:874, paragraph 56).
50 It follows that, should the employer not be able to show that it has exercised all due diligence in order to enable the worker actually to take the paid annual leave to which he or she is entitled, which is for the referring court to verify, it must be held that the loss of the right to such leave at the end of the reference period or the authorised carry-over period, and, in the event of the termination of the employment relationship, the corresponding absence of a payment of an allowance in lieu of annual leave not taken constitutes a failure to have regard, respectively, to Article 7(1) and Article 7(2) of Directive 2003/88 and Article 31(2) of the Charter (see, to that effect, judgment of 6 November 2018, Max-Planck-Gesellschaft zur Förderung der Wissenschaften, C‑684/16, EU:C:2018:874, paragraphs 46 and 55).
52 In the light of all the foregoing considerations, the answer to the questions referred is that Article 7 of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding national legislation which, for reasons relating to the control of public expenditure and the organisational needs of the public employer, prohibits the payment to a worker of an allowance in lieu of the days of paid annual leave acquired, during both the last year of employment and previous years, which were not taken at the date on which the employment relationship ended, where that worker voluntarily terminates that employment relationship and has not shown that he or she had not taken his or her leave during that employment relationship for reasons beyond his or her control.
