The Court clarified that the right to an annual period of paid leaf (Article 31/2) has to be interpreted in a way that it also stands against a practice that discourages a worker from taking a leave (such as not paying commission during leave periods). Another issue addressed was the question, if the right to an effective remedy (Article 47) would stand against requiring the worker to have taken a leave in order to claim his/her right to be paid for it.
Mr King worked for Sash WW on the basis of a ‘self-employed commission-only contract’ from 1 June 1999 until he retired, on 6 October 2012. Under that contract, Mr King was paid on a commission-only basis. When he took annual leave, it was unpaid.
Upon termination of his employment relationship, Mr King sought to recover payment for his annual leave — taken and not paid as well as not taken — for the entire period of his engagement, from 1 June 1999 to 6 October 2012. Sash WW rejected Mr King’s claim on the grounds that he had the status of self-employed worker.
Mr King made a claim to the competent Employment Tribunal, which in its judgement considered that Mr King was a ‘worker’ within the meaning of Directive 2003/88 (Working Time Directive) and that he was entitled to being paid for holidays he had taken with no payment as well as holidays accrued but untaken.
In the course of appeal procedures it was confirmend that Mr King had a right to paid annual leave. What was left as an open question was, if he could claim payment for holidays he had not consumed in years prior to his last year as according to a regulation of UK law Mr King was not entitled to carry over periods of untaken annual leave into a new holiday year. By failing to bring an action pursuant to Regulation 30(1)(a) of those regulations, Mr King lost all entitlement in respect of annual leave, since a claim for payment in lieu of paid annual leave not taken in respect of the holiday years in question was time-barred.
By contrast, Mr King takes the view that his rights in respect of paid annual leave not taken because it would have been unpaid by the employer were carried over into the next holiday year, notwithstanding regulation 13(9)(a) of the 1998 Regulations, and then from year to year until the date of termination of the employment relationship. Mr King claims, with reference to the judgment of 20 January 2009, Schultz-Hoff and Others (C‑350/06 and C‑520/06, EU:C:2009:18), that the right to payment in lieu of paid annual leave not taken did not arise until termination of the employment relationship and, accordingly, that his claim was brought in time.
Questions referred to the CJEU for a preliminary ruling:
Must Article 7 of Directive 2003/88 and the right to an effective remedy set out in Article 47 of the Charter must be interpreted as meaning that, in the case of a dispute between a worker and his employer as to whether the worker has the right to paid annual leave under the first of those articles, they preclude the worker having to take his leave first before establishing whether he has the right to be paid in respect of that leave?
Must Article 7 of Directive 2003/88 be interpreted as precluding national provisions or practices that prevent a worker from carrying over and, where appropriate, accumulating, until termination of his employment relationship, paid annual leave rights not exercised in respect of several consecutive reference periods because his employer refused to remunerate that leave.
Article 7 of Directive 2003/88 interprets the right to annual leave as follows:
1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.
2. The minimum period for annual leave may not be replaced by a payment in lieu, except where the employment relationship is terminated.’
The Court refers to the right to paid annual leave of at least four weeks as a right enshrined in Article 32/2 of the Charter and further determined by Article 7 of Directive 2003/88. The Court in its judgement clarifies that although it is for the Member States to lay down the conditions for the exercise and implementation of the right to paid annual leave,
Having to take a leve without pay in order to be abel to bring an action to claim payment for it therefor according to the court is not in line with Article 7 of Directive 2003/88 in conjunction with Article 47 of the Charter.
As for the second question the Courts points at the fact that ot had not been possible for Mr King to take paid leave before the termination of his contract. The right to an annual period of paid leaf (Article 31/2) according to the has to be interpreted in a way that it also stands against a practice that discourages a worker from taking a leave (such as not paying commission during leave periods).