Georg Neidel worked with the public services of the Stadt Frankfurt am Main and had the status of a public servant. He began to work as a fireman in 1970 and later as chief fireman. In June 2007, Mr. Neidel was found to be unfit for the service due to medical reasons. As a fireman he was entitled to retire at the age of 60 (instead of the general age limit fixed at 65 years). Ever since his retirement at the end of August of 2009, Mr. Neidel has lived on his pension which amounts to 2 463.24€ per month. As a fireman working irregular hours, George Neidel was entitled to an annual leave of 26 days per year, from 2007 to 2009. In addition to these 26 days/ year, he was entitled to compensatory leave, calculated in hours, for public holidays falling on days that were normally working days. According to German law Mr. Neidel was normally obliged to take out this leave within a year, however a carry-over period of nine months was allowed, which technically resulted in that public servants, who did not take their leave within these nine months, lost their leave. With regards to the not taken leave public servants were furthermore not entitled to any compensation.
The parties in the main proceedings took the view that Mr. Neidel was entitled to 100 days of annual leave from 2007 to 2009, the claimant, in 2007, however only took 14 days of that leave. Consequently, Mr. Neidel only retained a right to the remaining 86 days, equivalent to 16 821.60 € which he also required to be paid in lieu of the annual leave not taken. The city of Frankfurt am Main however rejected his request on three grounds, (i) that the German civil and public service law has no provision for financial compensation for leave not taken, (ii) that Article 7(2) of Directive 2003/88 is not applicable to public and civil servants, and (iii) that the retirement does not constitute a situation in which “the employment relationship is terminated” within the meaning of the above mentioned Article.
Consequently, Mr. Neidel brought an action against that decision to the Verwaltungsgericht (administrative court) of Frankfurt am Main, questioning the interpretation of Article 7 of Directive 2003/88 made by the city of Frankfurt am Main. The Verwaltungsgericht stayed the proceedings and referred six questions of law to the ECJ for a preliminary ruling.
The ECJ’s judgment and reasoning
With regards to the first question of law, whether Article 7 of Directive 2002/88 applies to a public servant carrying out the activities of a fireman in normal circumstances, the ECJ asserted that the article must be interpreted as applying to a public servant carrying out the activities of a fireman in normal circumstances. Hence, in order to boost improvements of the workers’ health, safety and the organisation of their working time, it must according to the ECJ be borne in mind that Article 1(3) of Directive 2003/88 read in conjunction with Article 2 of Directive 89/391, should be applicable to both public and private sectors of activity. However, as none of the circumstances stated in Directive 89/391 are relevant or applicable to the situation in this specific case, the activities of Mr. Neidel fell within the scope of Directive 2003/88. The ECJ furthermore referred to Article 45 TFEU and stated that according the exceptions to the scope of the Directive must be interpreted restrictively (par. 21). As it was stated by the Court “it is of no interest whether a worker is engaged as a workman (…), a clerk (…) or an official (…) or even whether the terms on which he is employed come under public or private law” (par. 25). The ECJ also pointed out that the interpretation of the term “worker” by the Member States has to be homogenous and in order to avoid any kind of discrimination and uncertainties in its application, EU law should be applied.
In regards to the fourth question of law referred to the ECJ, i.e. whether Article 7(2) of Directive 2003/88 is to be interpreted as meaning that a public servant is entitled, on retirement, to an allowance in lieu of paid annual leave not taken on account of the fact that he was prevented from working by sickness, the ECJ gave a positive response. Hence, Article 7(2) of the above mentioned directive must be interpreted as meaning that Mr. Neidel who is a public servant has the right, on retirement, to an allowance in lieu of paid annual leave that he, due to sickness, was prevented from taking. The European Court of Justice in its reasoning to the fourth question pointed out that every worker, according to the literal interpretation of Article 7(2) of Directive 2003/88 and settled case-law of the Court, has the right to paid annual leave of at least four weeks no matter his state of health. To prevent a situation in which a worker loses the enjoyment of this right, e.g. in a situation where the termination of an employment relationship has occurred, the worker should be entitled to an allowance in lieu. Article 7(2) of the Directive must thereto consequently be interpreted, as argued above, as proscribing national legislation and practices which provide the contrary.
The second, third and sixth questions referred to the Court concerned the interpretation of the period of paid annual leave in Article 7(1) Directive 2003/88 and whether this directive should be interpreted as impeding provisions of national law to further paid leave in addition to the minimum paid annual leave. In its judgment the ECJ made reference to a recent judgment delivered on 24 January 2012 (Case C-282/10 Dominguez) to affirm that the challenged directive “does not preclude provisions of national law giving entitlement to more than four weeks paid annual leave laid down by that national law”. It means that EU law limits itself to determine the minimum safety and health requirements for the organisation of working time. Consequently, the Member States are free to apply more favourable provisions (par. 35). So the ECJ recognises that directives always leave to the national authorities the choice of form and methods in transposing EU law in national law. In this case it signified that it is for the Member States to decide whether to confer on public servants an entitlement to further paid leave (in addition to the four weeks required by the directive), and either to provide or not provide for an entitlement to an allowance in lieu if that retiring public servant has been unable to use that additional entitlement because he was prevented from working by sickness (par. 36).
The fifth question referred by the German administrative court was: “Can such an entitlement to payment in lieu be at least partly precluded by the premature forfeiture of entitlement to leave prescribed in national law?” Answering this question the ECJ, after considering the specific circumstances of this present case, sustained the answer on two main arguments. The first argument was that in order to consider when the right to paid annual leave will lapse, it has to take into account if the period to enjoy this entitlement ceases to have its positive effect for the worker as a rest period, i.e. if it prevents the entitlement to reach its goal, that is to reestablish the worker’s physical conditions with a rest period of at least four weeks after twelve months of service. For this reason the ECJ argued that the carry-over period must be longer than the period required to acquire the entitlement. The second argument made by the ECJ was that the right to paid annual leave is a principle of European social law, recognised and protected under Article 31(2) of the European Charter of Fundamental Rights, which according to Article 6(1) TEU has the same legal value as the Treaties. With regards to these previously mentioned arguments the Court of Justice asserted that Article 7(2) of the Directive should be interpreted as precluding national law to impose a carry-over period that is shorter than the reference period in respect of which the paid annual leave or the allowance in lieu is granted. The ECJ, however, did not quantify the reference period in the case of Mr. Neidel, which will be a matter for the German administrative court.
The decision was taken by the Fifth Chamber without the opinion of the Advocate General, who was heard and who pointed out that his opinion was not imperative, since the Court had already decided similar cases based on the Directive 2003/88. Considering the ECJ’s judgment in the present case it is understandable why the ECJ decided the way it did. Hence, the Court firstly wanted to respect the precedent decisions (it referred to twelve precedent decisions in its reasoning), and secondly it stressed the importance to respect the principle of the right to paid annual leave, which is also expressly laid down in Article 31(2) of the EU Charter of Fundamental Rights.
The complete text of the judgment is available here.
Mathieu Delsol, Marijela Kokalovic, Airton Valente, and Samiya Warsame