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The Advocate General referred to the leading ECJ authority, Schultz-Hoff v Deutsche Rentenversicherung Bund (Brief 871), another German case, where national law and collective agreements allowed untaken leave to be carried over into the next holiday year, but only for six months, after which period it lapsed. The case had been interpreted as requiring the unlimited carry-over and accumulation of leave untaken because of sickness absence. However, in the Advocate General’s view, this was not what it decided. Schultz-Hoff established that it was unlawful for leave untaken through illness to expire six months after the end of the leave year, in circumstances where the national legislation and practice did not take account of the exceptional circumstances of workers on long-term sick leave. But the Court did not have to address the question of whether such leave (or a payment in respect of it) had to be available indefinitely.
Considering that question herself, the Advocate General opined that the Directive did not require the indefinite accumulation of such leave. She gave several reasons for this conclusion. For a start, case law such as Schultz-Hoff and Federatie Nederlandse Vakbeweging v Staat der Nederlanden (Brief 804) indicates that the health and safety objective of annual leave – allowing the worker time to recuperate – is most effectively met when the leave is taken during the holiday year in which it arises. The benefit of such leave decreases over time following the relevant leave year. The Advocate General was also not convinced that the recuperative benefit of leave increases in proportion to its duration. Furthermore, it is in the worker’s interest to be speedily reintegrated into the workforce after long-term absence, which would be undermined if a long period of annual leave is added on to the end of long-term sick leave. The Advocate General also noted that the unlimited accumulation of entitlement to annual leave might act as an incentive to employers to dismiss seriously ill workers sooner rather than later.
As for payments in lieu of untaken holiday on termination of employment, the Advocate General stressed that such payments should be seen as a means of enabling the worker to take a period of recuperative leave after employment has ended, rather than as compensation for the loss of holiday rights. This meant that the same analysis set out above with regard to the accumulation of the right to take leave applied – i.e. the Directive does not require such payments to accumulate indefinitely.
Finally, the Advocate General considered what would be an acceptable limit on the accumulation of holiday rights and the corresponding right to a payment in lieu on termination. She noted that the International Labour Convention No.132 envisages entitlement to annual leave expiring 18 months after the end of the leave year in which it arises. She considered that such a period would be sufficient for the effective exercise of the right to annual leave in the case of a worker on long-term sick leave. However, she emphasised that this should only be seen as a minimum period and that it was open to Member States to make more generous provision in national law.
