The Working Time Directive is one of the most burdensome pieces of legislation. Nevertheless, every time the ECJ is asked to interpret the Directive, through the preliminary ruling procedure, further burdens are imposed on business.
In January 2009, the ECJ has interpreted the right to paid annual leave enshrined by the Working Time Directive. In Gerhard Schultz-Hoff (C-350/06) v Deutsche Rentenversicherung Bund and Mrs C. Stringer and Others (C-520/06) v Her Majesty’s Revenue and Customs, the Court has pointed out that it is for the Member States to lay down, in their domestic law, conditions for the exercise and implementation of the right to paid annual leave but without making the existence of such a right subject to preconditions. It has stressed that the entitlement to paid annual leave as conferred by Article 7 of the Working Time Directive may not be undermined by provisions of national law which exclude the existence of such right or provide for the loss of it if a worker is on sick leave for the whole leave year and/or beyond a carry-over period. According to the Court a worker does not lose his entitlement to paid annual leave if he has been unable to exercise it due to illness.
The UK Government has stressed that Article 7 purpose is to protect “the safety and health of those who are actually working by providing for a rest from work.” Hence, those who are on sick leave are not working consequently they have no need for ‘actual rest’ from work. Nevertheless, the Court ruled that “(…) Article 7(1) of Directive 2003/88 must be interpreted as precluding national legislation or practices which provide that the right to paid annual leave is extinguished at the end of the leave year and/or of a carry-over period laid down by national law even where the worker has been on sick leave for the whole or part of the leave year and where his incapacity to work has persisted until the end of his employment relationship, which was the reason why he could not exercise his right to paid annual leave.” Hence, employees from all EU Member States on log term sick leave have the right to paid holidays regardless the time that have been signed off work.
According to the UK Government if a worker has no right to annual leave, he also has no right to pay in lieu of such leave. Furthermore, the UK Government has pointed out that Article 7(2) allows, but does not require, a payment in lieu of leave at the end of an employment relationship. Consequently, such a payment cannot be considered mandatory in the case of a worker who has been absent from work on long-term sick leave. However, the ECJ has ruled that, on termination of the employment relationship, the employer must pay to a worker, who has been on sick leave for the whole or part of the leave year, an allowance in lieu of paid annual leave not taken.
Philip Bushill-Matthews MEP, said, "On the face of it this may seem like a good move for employees, but at this present time there is a good chance that it will just add to Britain's already critical unemployment woes.” Moreover, he said, “(…) This ruling will not only increase employers' costs, but also their bureaucratic nightmare.”
In September 2009, the ECJ gave a preliminary ruling in Case C 277/08, Francisco Vicente Pereda v Madrid Movilidad SA, which also concerned the interpretation of Article 7(1) of the Working Time Directive. The Court ruled that workers have the right to request for leave to be reallocated if it has been affected by sickness. According to the ECJ the worker has the right to take his annual leave during a period, which does not coincide with the period of sick leave. It seemed that the ruling not only concerned workers as Mr Pereda who got injured before his holidays but will also apply to workers who get sick during their annual leave. The Court has stressed “where that worker does not wish to take annual leave during a period of sick leave, annual leave must be granted to him for a different period.” The ECJ has ruled that such period may fall outside the reference period for the annual leave in question. Hence, workers would be allowed to take their annual leave over into the next holiday year.
In accordance to the ECJ´s rulings a worker must not be required to take annual leave on sick leave. In the UK, under the existing Working Time Regulations, annual leave may only be taken in the leave year in respect of which it is due. The ECJ´s rulings have thrown the UK law and practice on sick leave and annual leave into a mess. The judgments of the ECJ not only bind the national court to which it is addressed but also all national courts facing the same issue. The Government will have to review the Working Time Regulations in the light of the ECJ's rulings, which is likely to happen in October.
These cases show how the ECJ interferes with member states legal systems, and overrides national rules. This is another clear example that decisions on British worker’s rights are not made by the UK parliament or by UK’s courts.
The above-mentioned rulings were not the first and won’t be the last. The ECJ has recently delivered another preliminary ruling concerning article 7(1) of the Working Time Directive, which entails further costs and administrative burdens for British business.
Following collective actions brought before the Spanish courts by trade unions for recognition of the right of certain workers to paid annual leave, the Spanish Supreme Court asked the ECJ whether the Working Time Directive precludes the Spanish legislation under which a worker who becomes unfit for work during a period of paid annual leave is not then entitled to that annual leave where it coincides with the period of temporary incapacity for work.
The Court recalled that, according to existing case law, entitlement to paid annual leave is “a particularly important principle of EU social law”, which is expressly enshrined in the EU Charter of Fundamental Rights. Moreover, the Courte stressed that “The right to paid annual leave cannot be interpreted restrictively.”
The ECJ has already held, in the above-mentioned cases, “that a worker who is on sick leave during a period of previously scheduled annual leave has the right, at his request and in order that he may actually use his annual leave, to take that leave during a period which does not coincide with the period of sick leave.” In the present judgment, the Court stated, “that the point at which that temporary incapacity arose is irrelevant.” Hence, according to the ECJ “the worker is entitled to take paid annual leave which coincides with a period of sick leave at a later point in time, irrespective of the point at which the incapacity for work arose.”
The Court recalled “the new period of annual leave – corresponding to the duration of the overlap between the period of annual leave initially scheduled and the period of sick leave – to which the worker is entitled after he has recovered may be scheduled, if necessary, outside the corresponding reference period for annual leave.” It ruled, therefore, that Article 7(1) of the Working Time Directive “must be interpreted as precluding national provisions under which a worker who becomes unfit for work during a period of paid annual leave is not entitled subsequently to the paid annual leave which coincided with the period of unfitness for work.”
According to the Daily Mail, the Federation of Small Businesses urged the Government to “avoid implementation of any ECJ ruling on annual leave and sick leave for as long as possible”, arguing that changing the law again “would be unhelpful, confusing and add burdens for small businesses, which at this time they can ill afford”. Norman Lamb, employment relations minister, does not “believe that the directive had to be interpreted in this way, which involves extra cost for business.” He stressed that "This judgment reinforces the need for a reassessment of the scope of the Working Time Directive." The time has come, as Bill Cash would say, to have “British law to British judges.” The Working Time Directive, as well as all the EU social and health and safety regulations, is strangulating British business. There is only one solution to this problem – repatriation of social and employment legislation.
