Article 31 - Fair and just working conditions
Key facts of the case
Request for a preliminary ruling from the Arbeitsgericht Verden. Reference for a preliminary ruling — Social policy — Organisation of working time — Directive 2003/88/EC — Right to paid annual leave — Article 7(1) — Legislation of a Member State under which collective agreements may provide for account to be taken of periods of short-time working when calculating remuneration to be paid in respect of annual leave — Temporal effects of judgments ruling on interpretation.
Outcome of the case
In the light of the aforementioned considerations, I propose that the Court answer the first question posed by the Arbeitsgericht Verden (Labour Court, Verden, Germany) as follows:
Article 7(1) 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 does not preclude national legislation, such as that in the main proceedings, under which reductions in earnings occurring in the period of calculation as a result of short-time work affect the calculation of the payment for annual leave with the result that the worker receives a lower remuneration for annual leave for the duration of the period of annual leave of at least four weeks, or receives a lower allowance in lieu of leave after the employment relationship has ended, than he would receive if the calculation of the remuneration for annual leave were based on the average earnings which the worker would have received in the period of calculation without such reductions in earnings. However, it is ultimately for the referring court to assess, in the light of the overall economy of the federal collective framework agreement for the construction industry and, in particular, its arrangements on annual leave, whether the essence of the right to paid annual leave is not undermined by those rules.
4) Article 31(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’) provides: ‘Every worker has the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave.’
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22) It is within this factual and legal context that the Arbeitsgericht Verden (Labour Court, Verden, Germany) decided to stay the proceedings and to refer the following questions to the Court:
‘1. Are Article 31 of the Charter of Fundamental Rights of the European Union and Article 7(1) of Directive 2003/88/EC of 4 November 2003 concerning certain aspects of the organisation of working time to be interpreted as precluding national legislation under which it may be provided in collective agreements that reductions in earnings occurring in the period of calculation as a result of short-time work affect the calculation of the payment for annual leave with the result that the worker receives a lower remuneration for annual leave for the duration of the period of annual leave of at least four weeks, or receives a lower allowance in lieu of leave after the employment relationship has ended, than he would receive if the calculation of the remuneration for annual leave were based on the average earnings which the worker would have received in the period of calculation without such reductions in earnings? If so, what is the maximum percentage, with reference to the worker’s full average earnings, that a collectively agreed reduction, permitted by national legislation, of the remuneration for annual leave may have as a result of short-time work in the period of calculation in order for the interpretation of that national legislation to be regarded as in conformity with EU law?
2. If Question 1 is answered in the affirmative: Do the general principle of legal certainty laid down by EU law and the principle of non-retroactivity require that the possibility of relying on the interpretation which the Court places, in the preliminary ruling to be given in the present case, on Article 31 of the Charter of Fundamental Rights of the European Union and on Article 7(1) of Directive 2003/88/EC of 4 November 2003 concerning certain aspects of the organisation of working time be limited in time, with effect for all parties, because the highest national courts have previously ruled that the relevant national legislation and collectively agreed rules are not amenable to an interpretation in conformity with EU law? If the Court answers this question in the negative: Is it compatible with EU law if, on the basis of national law, the national courts grant protection of legitimate expectations to employers who have relied on the continued application of the case-law developed by the highest national courts, or is the grant of protection of legitimate expectations reserved for the Court of Justice of the European Union?’
34) EU law recognises the importance of social dialogue. Article 28 of the Charter guarantees the right to negotiate and conclude collective agreements. Such agreements are an expression of the social dialogue. The (sector specific) rules contained in those agreements are likely to be endowed with an enhanced level of legitimacy because they are not unilaterally (and generally) imposed by public authorities, but have been negotiated by the relevant social actors, typically in view of the particularities of a given sector. As a result, it may be assumed that collective agreements reflect an overall subtle balance between, on the one hand, the interests of the workers and, on the other hand, those of employers.
38) Pursuant to Article 31(2) of the Charter, every worker has the right to an annual period of paid leave: no further details are provided on that right. Article 7(1) of Directive 2003/88, which the Court has ruled has direct effect, ( 12 ) gives specific expression to that right. It provides that Member States shall 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 the granting of, such leave as laid down by national legislation and/or practice.
56) According to the Commission, there is no need to specifically examine the Charter because Article 7 of Directive 2003/88 is a specific expression of Article 31(2) of the Charter. The Commission recalls that the worker is entitled to his normal remuneration calculated on the basis of an average over a reference period that is judged to be representative. There are no exceptions or derogations possible to that right. When a Member State grants more than four weeks of annual leave, it can freely set the conditions and decide, for example, whether to grant remuneration for days that have not been taken, and to decide the conditions under which it can occur. For the Commission, the national legislation in issue is compatible with Directive 2003/88 if it is established that this legislation has transposed the pro rata temporis principle. It is for the referring court to determine whether the collective agreement in question has applied it.
57) I agree with the preliminary remark made by the Commission, namely that Article 31(2) of the Charter is not necessary to consider in the present case. That provision merely states, in a general and abstract way, that every worker has the right to limitation of maximum working hours, to daily and weekly rest periods, and to an annual period of paid leave. The Charter does not even state the minimum duration of guaranteed annual leave, let alone what rules govern the method of calculation of remuneration while on annual leave.
