Case C-118/13, Bollacke – claiming the unused paid annual leave of her late husband [judgment 2014, ECLI:EU:C:2014:1755]

If a worker accrues paid annual leave but dies before taking it, then can the heir to his estate claim a cash equivalent from the employer by dint of the EU’s ‘working time’ Directive 2003/88/EC? And in view of the fact that a goal of the Directive is the health and safety of workers, is an employer obliged to grant leave even if the employee has not asked for it?

Facts
In 1998, Mr Bollacke went to work for K + K Klaas & Kock B.V. & Co. KG. After more than a decade of being employed by them, he became seriously ill. He was on sick leave for 8 months in 2009. In 2010, he also took periods of sick leave and, in the October of that year, he drew up a will. He named a woman as the sole beneficiary of his estate. Shortly afterwards, he married her. The marriage was two days old and he died.

Mrs Bollacke subsequently wrote to her late husband’s employer claiming money in lieu of the paid annual leave that her late husband had not taken before his death. She noted that up to and including 2010, it had been a customary practice of employees working for the firm to accumulate and to take their holiday over to the next calendar year if, because of the pressure of work, the employee had been unable to take their holidays. Although Mrs Bollacke contended that Mr Bollacke had not taken his holiday because of his employer’s under-staffing of the firm, it was a fact that for years Mr Bollacke had not exercised his rights to take his basic paid holiday leave. Consequently, at the time of his death, Mr Bollacke had amassed unused paid annual leave totalling in excess of 140 days.

Mr Bollacke’s employer refused to pay and doubted whether the accrued rights were capable of being inherited.

Mrs Bollacke took the employer to court but her claim was thrown out at first instance. The Bocholt tribunal relied on 2011 German case law that suggested that when an employee died, the contract of employment was terminated and the right to compensation for unused paid leave was extinguished. In essence this was because the employee was under an obligation to work for his employer; paid leave for the duration of the holiday was an exemption from the employee’s obligation. The remainder of the obligations in the contract of employment were left intact so that the employer was still obliged to pay wages to his employee. Since death ended the contract of employment, the employee was no longer obliged to work; consequently, the exemption ceased to exist, together with the strictly personal right that was linked to it. There was no right to be compensated for the unused holiday because it was impossible for a dead employee to take a holiday. Thus, it could not be replaced by an allowance in lieu because the employment relationship had not been terminated; instead, it was the death of the employee that extinguished the right to a holiday.

On appeal, the Landesarbeidsgericht in Hamm recalled the wording of the EU’s working time 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 (OJ [2003] L299/9).

As regards annual leave, Article 7 of that directive provides:

1. 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 granting of, such leave laid down by national legislation and/or practice.
2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

The Landesarbeitsgericht also recalled that this Article of the Directive had been interpreted in various pieces of CJEU case law, including the judgment in Joined Cases C-131/04 and C-257/04, Robinson-Steele, when the CJEU had stated:

58. The directive treats entitlement to annual leave and to a payment on that account as being two aspects of a single right. The purpose of the requirement of payment for that leave is to put the worker, during such leave, in a position which is, as regards remuneration, comparable to periods of work.

The Landesarbeitsgericht thought that this might mean that the right to annual leave was not extinguished on the death of an employee in so far as it related to the employee’s wage. This would allow it to belong to the employee’s estate and thus be inherited. In any event, the Landesarbeitsgericht also recognised the fact that Article 7 of the Directive was a very important principle of EU social law and was anchored in Article 31(2) of the EU Charter.

A further doubt centred on whether German case law could be maintained in light of Article 7(1) of the Directive. The Directive contains minimum provisions relating to health and safety. It requires that work be organised in such a way as to grant a minimum period of paid annual leave. Accordingly, it was incumbent on the employer to ensure that the employee received the time to rest. The employer had the power to grant the holiday, and ensure that it could be taken. If the responsibility for asking for a holiday were to be left to the employee, then the employer could have an economic advantage in just paying financial compensation, and that would be contrary to the Directive’s aim of protecting the health and safety of workers.

Questions Referred
According to the Curia website, the Hamm Landesarbeitsgericht has asked:

1. Is Article 7(1) of Directive 2003/88/EC to be interpreted as precluding national legislation or practice according to which the entitlement to a minimum period of paid annual leave is lost in its entirety on the death of the worker, namely not only the entitlement to release from the obligation to work, which can no longer be implemented, but also the entitlement to payment of remuneration in respect of annual leave?
2. Is Article 7(2) of Directive 2003/88/EG to be interpreted as meaning that the entitlement to an allowance in lieu of a minimum period of paid annual leave on termination of the employment relationship attaches to the person of the worker in such a way that that entitlement accrues only to him, in order to enable him to realise at a later date the purposes of rest and leisure associated with the granting of paid annual leave?
3. Is Article 7(1) of Directive 2003/88/EC to be interpreted as meaning that, having regard to the protection of the safety and health of workers, the employer is obliged, when organising working time, actually to grant the worker leave by the end of the calendar year or, at the latest, by the end of a carry over period applicable to the employment relationship, regardless of whether or not the worker has submitted an application for leave?