WORKING CONDITIONS : AN EMPLOYER CANNOT REPLACE ANNUAL LEAVE WITH AN ALLOWANCE.

In case any of member states has failed to fully understand, the European Court of Justice has driven home the point once more. In a preliminary ruling on paid leave passed down on 6 April (1)), it concludes that EU law precludes the replacement of the minimum period of paid annual leave by an allowance in lieu, where leave is carried over to a subsequent year. The Court feels that financial compensation for minimum annual leave carried over would encourage employees not to take that leave. Following practices in the United Kingdom, (see Europolitics N[degrees] 3047), practices in the Netherlands have now been challenged.

DUTCH PRACTICE CONDEMNED

The Netherlands Ministry of Social Affairs and Employment indicated in a brochure that financial compensation can be paid in a following year to an employee who has not made use (in whole or in part) of the minimum leave entitlement. The one condition is that employers and employees must agree in writing. In the Ministry's view, leave days, statutory as well as non-statutory, saved up from previous years exceed the minimum leave entitlement and can therefore be eligible for redemption.

LEAVE DUE MUST BE TAKEN

The Court notes that "the entitlement to paid annual leave is an important principle of Community social law". Workers must be entitled to actual rest, "with a view to ensuring effective protection of their safety and health". It is only where the employment relationship is terminated that payment of an allowance in lieu of paid annual leave is permitted.

According to the 1993 Working Time Directive (amended in 2003), the member states must take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

NO FINANCIAL COMPENSATION

The Court considers that the positive effect "which that leave has for the safety and health of the worker is deployed fully if it is taken in the prescribed year". But the significance of that rest period, for the protection of workers, remains if it is taken during a later period. In any event, the possibility of financial compensation in respect of the minimum period of annual leave carried over would create an incentive, incompatible with the objectives of the Directive, not to take leave or to encourage employees not to do so. It matters not whether such compensation is based on a contractual agreement .

(1)(Federatie Nederlandse Vakbeweging / Staat der Nederlanden, case C-124/05