Employees Retain Right to Paid Annual Vacation Time They Could Not Take Due to Illness And, If Their Employment Contract Ends, They Must Receive Compensation For Unused Vacation Time

2 February 2009

The European Court of Justice (hereinafter ECJ), in their ruling of January 20, 2009 (pending matters C-350/06 and C-520/06), set out a revolutionary doctrine regarding the right to annual paid vacation as regards the interpretation of Article 7, section 1 of EU Directive 2003/88 for work time planning.

According to the ECJ, the right to annual paid vacation time must be considered an especially important principle of EC Labour Law which applies to all workers, regardless of their state of health.

It likewise confirms that, when the worker was on medical leave for illness for the entire accrual period or a portion thereof and was effectively unable to exercise this right as per EU Directive 2033/88, the right to annual paid vacation is not extinguished when the accrual period and/or extension period set by national member state law comes to an end.

On the other hand, once the employment relationship has come to an end and annual paid vacation time can no longer be enjoyed as such, rather than having the individual consequently deprived of their right, the worker is due monetary compensation. The ECJ notes that in order to calculate the monetary compensation, the worker must receive the ordinary remuneration corresponding to said period of rest.

In summary: in view of this ruling, if an employee has been on medical leave for the entire period of annual vacation accrual and/or the period of extension or a portion thereof, they have the right to use the vacation time in another period, and, if that is not possible because the relationship has come to an end, then they should be paid for unused vacation time.

For further information, please contact Ana Gómez Hernández: agomez@mmmm.es