Luxembourg / Court of Appeal of the Grand-Duchy of Luxembourg, Eighth Chamber / CAL-2021-00957
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Luxembourg / Court of Appeal of the Grand-Duchy of Luxembourg, Eighth Chamber / CAL-2021-00957
Key facts of the case:
The applicant joined Company 2 as an engineer on the basis of a permanent employment contract in January 2015. Following termination of his/her contract in June 2019, the applicant brought an action before the Labour Court (tribunal du travail) in October 2019 seeking, among others, compensatory allowances for leave not taken in 2017, 2018 and 2019. By judgment of July 2021, the Labour Court awarded a compensatory allowance for leave not taken regarding 2019 (€ 2,667.22), but not in respect of 2017 and 2018. To that effect, it concluded that the applicant had not established that he/she had requested that his/her leave for 2017 and 2018 be carried over. As Article L.233-9 of the Labour Code (Code du Travail) states that annual leave must be granted and taken in the course of the year, the Court ruled that leave for 2017 and 2018 was lost and that the former employee's request should be declared unfounded. The applicant lodged the current appeal before the Court of Appeal (Cour d'appel) in September 2021
Key legal question raised by the Court:
The key legal question addressed by the Court is the content of the right to an allowance in lieu of annual leave not taken upon termination of the employment relationship.
Outcome of the case:
The Court of Appeal starts by recalling that, in accordance with Article L.233-9 of the Labour Code, the annual leave must be granted and taken in the course of the year. While there are some exceptions allowing for the carry-over of the annual leave (refusal of the employer, maternity leave, etc), the annual leave is in principle lost at the end of the year. The leave is also lost when the employee fails to apply for leave.
It then goes on to state that this national regime must however be construed in accordance with the Court of Justice of the European Union (CJEU)’s interpretation of both 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.5
According to the Court of Appeal, such interpretation precludes an employee from automatically losing the paid annual leave to which he/she was entitled under EU law and, correspondingly, the right to an allowance in lieu of leave not taken, solely because he/she did not request leave before termination of the employment relationship. These rights can only be lost if the employee was the opportunity by the employer to take the leave in question in good time. In particular, the employer must prove that this information was adequatly provided to the employee.
As the defendant company did not produce evidence that it had complied with this obligation, the Court of Appeal held, by variation of the decision of the Labour Court, that Person 1’s entitlement to annual leave not taken in 2017 and 2018 had not been lost and that he/she could usefully claim compensation by way of an allowance. As such, the Court of Appeal awarded Person 1 an allowance of € 2,764.40 for leave not taken in 2017 and 2018.
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Paragraphs referring to EU Charter
In other cases, the annual leave is in principle lost at the end of the year. This would be the case, for example, if the employee simply failed to apply for leave (...) However, it is necessary to take into account the case law of the Court of Justice of the European Union (CJEU) based on Article 31 (2) of the Charter of Fundamental Rights of the European Union (which reads as follows: "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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Paragraphs referring to EU Charter (original language)
Dans les autres cas, le congé se perd en principe en fin d’année. Tel serait par exemple le cas lorsque le salarié a tout simplement omis de demander un congé (…) Il y a toutefois lieu de prendre en considération la jurisprudence de la Cour de Justice de l’Union européenne (CJUE) basée sur l’article 31 paragraphe 2 de la Charte des droits fondamentaux de l’Union européenne (libellé comme suit : « Tout travailleur a droit à une limitation de la durée maximale du travail et à des périodes de repos journalier et hebdomadaire, ainsi qu’à une période annuelle de congés payés ») (…).