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CJEU Decided that Employees Accrue Annual Leave in the Period Between an Unfair Dismissal and the Reinstatement Date

Joined Judgment of CJEU – The Bulgarian Case C-762/18 & The Italian Case C-37/19

Is there an entitlement by an employee to paid annual leave in respect of the period from the date of an unfair dismissal to the date of reinstatement? The CJEU (Court of Justice of European Union) in a joined judgment recently, answered this question, inter alia, in the affirmative.

Facts:

C-762/18 (“The Bulgarian Case”) concerned a primary school music teacher who was dismissed from her positon, upon appeal her dismissal was deemed unlawful and she was subsequently reinstated. Following this reinstatement, however, she was again dismissed. She ultimately sought compensation for unused paid annual leave to cover the period between her unlawful dismissal and reinstatement. Bulgaria’s existing case law provided that a worker was not deemed to be carrying out work under the employment relationship during this period and consequently, she was not entitled to paid annual leave. 

Similarly in C-37-19 (The Italian Case”) an employee of an Italian credit institution was repeatedly dismissed over a period of eight years and in each instance she was reinstated, her dismissals having been found unlawful by the Italian courts. Ultimately, she too was again dismissed. She sought compensation for paid annual leave not taken between the periods of her unlawful dismissal and reinstatement before the Italian court.

Preliminary Issue:

Ultimately, in both cases, the respective national courts referred questions for a preliminary ruling to the CJEU, namely:

1.  Must Article 7(1) of the Working Time Directive (Directive 2003/88) and Article 31(2) of the Charter of Fundamental Human Rights be interpreted as meaning that a worker in the situations described is entitled to paid annual leave for the period between unlawful dismissal and the reinstatement even if during that period they had not actually worked for the employer.

2.  Must EU law be interpreted as meaning that workers, in the situations described, are entitled to financial compensation in lieu of paid annual leave not taken during the period between unlawful dismissal and reinstatement upon a subsequent termination of their employment.

Decision

The Court answered both questions in the affirmative. The Court referred to its case law and in line with this, where a worker is unable to perform their duties for an unforeseeable reason and the absence from work is beyond their control, such as sickness, the right to paid annual leave cannot be made subject to a condition that the worker has actually worked. The Court noted, that when a worker is unable to perform their duties due to sickness the fact that a worker is deprived of the opportunity to work as a result of a dismissal ultimately found to be unlawful, as in these instances, this is in principle unforeseeable and beyond the control of that worker.

From this, the court concluded that the period of workers unlawful dismissal and reinstatement must be assimilated to a period of actual work for the purposes of determining entitlement to paid annual leave.

It follows, as observed by the court, that should the reinstated worker again be dismissed or the employment relationship after reinstatement ceases for whatever reason, then the worker is entitled to a payment in lieu of paid annual leave not taken during the period in question.

However, the Court clarified that should a worker be employed in another job during the impugned period then there is no right to paid annual leave or a payment in lieu of same for the period the worker was employed by another employer.

Takeaway for Employers:

The judgment clarifies the position in relation to the period between an unlawful dismissal and the reinstatement of an employee, in that, it is deemed recognisable service despite the employee not having worked for the employer.  

It should be noted that these associated costs, with such annual leave accruing but untaken between the period of dismissal and reinstatement (if deemed unlawful), need to be considered and borne in mind by employers when defending a claim for unfair dismissal and/or agreeing to reinstatement. 

Link

Authors – Anne O’Connell & Ethna Dillon

30th July 2020

Anne O’Connell Solicitors

Fitzwilliam Hall

Fitzwilliam Place

Dublin 2

www.aocsolicitors.ie

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