ECJ: Right to Paid Annual Leave Despite Dismissal.

 Employees Keep Entitlement to Holidays After Unlawful Dismissal and Rehiring.

ECJ: Right to Paid Annual Leave Despite Dismissal

Where workers have been dismissed unlawfully and re-employed, they shall retain their entitlement to annual leave for that period. This was determined by the European Court of Justice (ECJ) in its ruling of June 25, 2020 (Ref.: C-762/18 and C-37/19).

The Case

The ECJ ruling was based on legal actions brought by a Bulgarian school employee and an Italian bank employee. Both had been dismissed unjustly by their employers and had been re-employed after the lawsuit was successful. Later, the employment relationships were terminated again. Although these dismissals were effective, the women are now suing for payment of their unused annual leave for the period between their wrongful dismissal and their re-employment. The responsible national courts in Bulgaria and Italy brought the case before the ECJ.

The ECJ granted the applicants the right to paid annual leave in accordance with its jurisprudence on paid annual leave for sick workers.

Prevented from Performance

The unlawful dismissals prevented the applicants from performing their work. Just like the occurrence of incapacity to work due to illness, this was not foreseeable and independent of the employees’ will, declared the Luxembourg judges.

Entitlement to holidays for the period between unlawful dismissal and reinstatement remains in force.

Consequently, the period between the wrongful dismissal and the re-employment with regard to the entitlement to holidays must be equated with a period of actual work. Accordingly, the applicants were entitled to paid annual leave, the ECJ clarified.

If the employee is dismissed again or the employment relationship ends for some other reason, the employee is entitled to a corresponding payment for the unused annual leave accumulated in the period between the wrongful dismissal and re-employment, the Luxembourg judges added.

Exception In the Case of New Employment

But there is one exception: If the employee was employed elsewhere between the unlawful dismissal and the re-employment, his entitlement to holidays is directed against the employer with whom he was employed for this period.

With this ruling, the ECJ has strengthened workers’ rights. If the dismissal is unlawful, claims against the employer are not lost. With this decision, the ECJ has once again decided what happens to holiday entitlements, which could not be taken during the holiday year. In doing so, it has stuck to its line in the holiday case law and has further nuanced it.