European Court rulings on working time reinforce right to annual leave and breaks

In 2006, the European Court of Justice delivered a number of key decisions in relation to the interpretation of Council Directive 93/104/EC on working time. Specifically, the rulings underline workers’ essential right to annual leave, and the obligation on Member States to ensure that workers’ right to benefit from rest breaks is observed.

Background

Council Directive 93/104/EC concerning certain aspects of the organisation of working time lays down minimum provisions regarding working hours, annual leave, and rest breaks during and between work shifts. The directive was adopted as a measure to ensure the health and safety of EU workers and is based on a general principle of adapting work to the worker. Three cases in particular, heard by the European Court of Justice in 2006, have established important ground rules for ensuring that health and safety procedures, as enshrined in the directive, are not bypassed, whether by formal agreement between the contracting parties or otherwise.

Workers’ right to annual leave

Article 7 of the directive requires Member States to take the necessary measures to ensure that every worker is entitled to paid annual leave of at least four weeks; it also stipulates that the minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated. One particular case – the Federatie Nederlandse Vakbeweging v Staat der Nederlanden Case C-124/05 – raised the issue of whether the minimum period of annual leave could be replaced by pay, with the agreement of the worker and employer, in situations where the leave had not been taken within the leave year. The Court of Justice ruled that entitlement to paid annual leave is an important principle of EU social law and that it cannot be replaced by payment, other than at the termination of a contract. This ruling has clarified the importance that the court attaches to the taking of annual leave and its disapproval of any measures that might deter individuals from taking leave.

The issue which arose in the cases of Robinson-Steele v RD Retail Services and others, C-131/04 and C-257/04 concerned a system of ‘rolled up’ pay, wherein the worker’s regular pay is said to include an undefined holiday pay element. Thus, when the workers chose to take a holiday, no payment was attached to it. This could act as a disincentive for taking annual leave. The Court of Justice ruled that it is unlawful for any employer to ‘roll up’ holiday pay, unless it is completely evident that additions are being made to the workers’ regular pay, and that they are clearly identified and recognised as such by the worker.

The two aforementioned rulings underline the fact that annual leave is an essential right for all workers, and that the regulations governing this leave must be applied in such a way as not to dissuade the worker from benefiting from the minimum annual leave provision guaranteed by the directive. The rulings are particularly relevant for those sectors in which a high degree of casual and informal work occurs and where pay systems have generally not been transparent.

Working time and rest breaks

Articles 3, 4 and 5 of the working time directive set out workers’ minimum entitlements to daily rest periods, to breaks during the course of the working day and to weekly rest periods. These provisions must ensure that every worker is entitled to a minimum daily rest period of 11 consecutive hours within a 24-hour period; moreover, for each seven-day period, workers are entitled to a minimum uninterrupted rest period of 24 hours, in addition to the 11 hours.

When the working time directive was transposed into UK law, the government advised that ‘employers must make sure that workers can take their rest, but are not required to ensure that they do take their rest’. This was interpreted as meaning that as long as workers taking rest breaks would not be penalised, there would be no breach of the directive if breaks were not taken in practice. In Commission v United Kingdom, Case C-484/04, the European Commission initiated proceedings on the grounds that the UK government’s guidelines endorsed and encouraged a practice of non-compliance with the directive (UK0610029I).

The Court of Justice ruled that Member States are obliged to guarantee that a worker’s right to benefit from effective rest is observed; it also ruled that in cases where a Member State indicates that an employer is not required to ensure that workers actually exercise such rights, this does not guarantee compliance with either the directive’s minimum requirements or with its essential objective (Press release No. 67/06 (107Kb PDF)). Subsequent to the court’s judgement, the UK Department of Trade and Industry (DTI) issued new [guidance](http://www.dti.gov.uk/employment/employment-legislation/working-time-regs/ECJ Judgement on Rest Breaks/index.html) in November 2006, which no longer includes the reference to employers not being ‘required to ensure that they [workers] do take their rest’.

Sonia McKay, Working Lives Research Institute for AWWW GmbH