The worker’s right to paid annual leave is not time-barred if the employer does not give him the possibility of actually exercising it, since the contrary would mean validating an unjust enrichment.
To allow the employer to invoke the limitation period for the employee’s rights without having given him the opportunity to exercise them effectively would be to validate behaviour which would lead to the employer’s unjust enrichment.
The worker’s right to paid annual leave does not lapse if the employer does not give him the possibility of exercising it effectively, since the contrary would imply validating an unjust enrichment.
Following the termination of his employment relationship, a worker claimed financial compensation for the 101 days of paid annual leave accumulated over the previous 5 years that he had not been able to take. The German Court of Appeal recognised the right claimed, considering that it was neither extinguished nor time-barred, as the employer had not contributed to the employee’s holiday entitlement.
Following an appeal in cassation, the German Labour Court referred a question to the CJEU for a preliminary ruling as to whether it is contrary to EU law for the entitlement to paid annual leave to lapse after the expiry of the three-year period provided for in German law, if the employer has not enabled the employee to exercise that entitlement effectively.
As the CJEU has already stated above, national legislation may provide for the loss of entitlement to paid annual leave at the end of the accrual period or carry-over period, provided that the worker has actually had the opportunity to exercise the entitlement (CJEU 6-11-18, C-619/16). However, ensuring that the right is actually exercised should not be the sole responsibility of the employee, allowing the employer to release itself from its own obligations on the grounds of the employee’s failure to request it. To allow the employer to invoke the limitation period for the employee’s rights without having given him the opportunity to exercise them effectively would be to validate behaviour which would lead to the employer’s unjust enrichment.
Therefore, the CJEU, in its judgment 22.9.22, C-120/21, declared contrary to EU law a national law according to which the right to paid annual leave expires at the end of a period of time when the employer has not made it possible to exercise this right in an effective manner.
For further information, please contact our Labour Consultancy.