Annual leave of part-time employees whose working time is increased
A court decision that went practically unnoticed was handed down by the Court of Justice of the European Union on November 11, 2015, on the interpretation of how to calculate the economic compensation for the annual leave of an employee who had increased her working time (to full-time) after taking the leave.
The heart of the matter lies in determining whether the number of days of leave should be recalculated a posteriori where, after taking the leave, an employee provides evidence of having increased his working time; in short, whether the annual leave should be proportional to the new working time rather than to the time being worked when the leave was taken.
The particular matter, a complaint filed by a UK employee against her employer, was full of twists and turns, since the employee’s request was originally admitted by the Employment Tribunal, and written support was subsequently required on identical favorable terms.
Nonetheless, prior to the appeal to the Employment Appeal Tribunal, the judge a quo reconsidered his position, deeming it necessary to apply to the Court of Justice of the European Union for a reference for a preliminary ruling regarding the answer to the following questions:
(i) Whether the pro rata temporis principle recognized in the Framework Agreement on part-time work should be deemed to require the national legislation of Member States to admit the right to recalculate the annual leave already taken where working time is increased.
(ii) If yes, whether the new calculation is to affect only the period by which working time is increased or the entire period.
(iii) And whether the calculation will differ for employees who, in the situation in question, remain employed, as opposed to those who have terminated their employment relationship.
The CJEU began its reasoning by alluding to the fact that the right to annual leave is a particularly important principle of European Union social law which cannot be interpreted restrictively.
Thereafter, in order to resolve the problem raised, the court referred to the case law laid down in case C-486/08, stating that “the taking of annual leave in a period after the period during which the entitlement to leave has been accumulated has no connection to the time worked by the worker during that later period” and that, consequently, “a reduction in working hours when moving from full-time to part-time employment cannot reduce the right to annual leave that the worker has accumulated during the period of full-time employment”.
Having regard to the foregoing, the CJEU concluded that in order to calculate entitlement to paid annual leave, it is necessary to distinguish periods during which the worker worked according to different work patterns, thereafter calculating such entitlement for each period separately.
The CJEU thus reasons that there is no obligation for Member States to include provisions recognizing the right to a new calculation of days of annual leave already taken when a worker increases his working time, although there is nothing to prevent them from taking measures to improve the aforesaid provision.
Accordingly, with respect to the case at hand, the court ruled that a new calculation of annual leave had to be made only with respect to the period of work during which the employee had increased her working time.
Lastly, as for whether a separate calculation must be made depending on whether the employment relationship continues or has been terminated, the CJEU takes the view that, in the light of the considerations used to answer the first of the questions raised, this question is no longer relevant, given that the calculation must be made according to the same principles both where the contractual relationship remains in force and where it has been terminated.
In any case, the judgment does not avoid the fact that the local courts will have to ascertain whether the employee’s compensation is composed of various items or whether it varied in connection with the unit of working time, for the purpose of determining compensation for annual leave.
Ángel Olmedo Jiménez
Garrigues Labor and Employment Law Department