Deferral of paid leave not taken due to sick leave

Deferral of paid leave not taken due to sick leave: the CJEU confirms its case law limiting the duration of the deferral to 15 months Can an employee carry over paid leave that he was unable to take due to long-term sick leave? And if so, how soon? These were the questions raised by the Agen industrial tribunal (Conseil de prud'hommes) in the context of a dispute between a private company, which had been awarded a public transport contract, and several employees who had been off sick for more than a year. Before taking their case to the industrial tribunal, they had asked their employer to grant them paid annual leave which they had not been able to claim during their respective periods of illness. Their requests:

• had been made to the employer less than 15 months after the end of the one-year reference period giving entitlement to annual leave;
• were also limited to rights acquired during no more than two consecutive reference periods.

The company objected to these requests, taking the view that the work stoppages in question had lasted for more than a year and were not work-related, so that they could not request such a deferral. It was against this backdrop that the case was brought before the Conseil de prud'hommes d'Agen (Agen industrial tribunal), which considered it appropriate to refer several questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling on the subject of the deferral of paid leave earned but not taken due to work stoppage and more specifically the time limit for this deferral. In a judgment handed down on November 9 (C-271/22 to C275/22) that the CJEU has pronounced; and this one has, to say the least, a very particular resonance since it follows the recent rulings of the French Supreme Court (Cour de cassation) on September 13, which established the principle that employees on sick leave acquire paid leave during their sick leave (see on this point our September 2023 article entitled " Paid leave and illness: what you need to know after the September 13 ruling! »). Before coming back to this decision, let's take a look at French legislation on deferred paid leave.   1. What does French law say about the carryover of paid leave earned but not taken due to sick leave? He is silent on the subject. In fact, it was the Cour de cassation that established the principles according to which :

• employees absent for health reasons prior to their leave may postpone their leave, regardless of the nature of the absence (industrial accident, occupational disease or simple illness) ( Soc. September 27, 2007, no. 05-42.293).

However, the High Court is silent on the time limit within which this postponement can take place.

• if the illness occurs during the employee's paid leave, no postponement or extension of leave is possible ( Soc. December 4, 1996, no. 93-44.907).

This is not the position of the CJEU, which considers that deferral is always possible, regardless of the date on which the work stoppage occurs. The CJEU has long held that a worker on paid annual leave who falls ill and is unable to work during that period may defer his paid leave (CJEU, June 21, 2012, aff. C-78/11, ANGED v/ FASGA). The European Court of Justice has also ruled that a 15-month deferral period is permissible where the reference period for entitlement to paid annual leave is one year (CJEU, November 22, 2011, KHS C-214/10). In particular, these decisions are based on the principle that ". Member States shall take the necessary measures to ensure that all workers are entitled to paid annual leave of at least four weeks, in accordance with the conditions for obtaining and granting such leave laid down by national legislation and/or practice. » (article 7, 1^st § of Directive 2003/88/EC of November 4, 2003).   2. Questions referred by the Conseil de prud'hommes d'Agen to the CJEU for a preliminary ruling Given the silence of French law on the subject of the deferral of paid leave not taken as a result of sick leave, the Conseil de prud'hommes d'Agen (Agen industrial tribunal) referred three questions to the CJEU for a preliminary ruling, the last two of which are of particular interest to us:

• 1^st question: what is the reasonable deferral period for the 4 weeks of accrued entitlement, within the meaning of article 7 §1, in the case of a one-year accrual period?

On this point, the CJEU points out that it is clear from the very terms of this text that it is up to the Member States to define, in their domestic regulations, the conditions for exercising and implementing the right to paid annual leave, specifying the specific circumstances in which workers may make use of that right. It therefore considers that it is not up to it to define the deferral period applicable to the right to paid annual leave, since the determination of this period is the responsibility of the Member State concerned. In plain English:

• the period of carry-over of paid leave earned but not taken due to a work stoppage must be determined by the French State;
• the CJEU can only verify that the postponement period set by the legislator does not infringe the right to paid annual leave.

There can be no doubt that the CJEU has sought here to temper its position on the retention of CPs during a judgment, the effects of which are catastrophic in France following the latest rulings handed down and referred to above.

• 2^nd question: isn't the application of an unlimited deferral period in the absence of a national, regulatory or contractual provision governing the said deferral contrary to article 7 §1?

On this point, the CJEU recalls that limitations may be placed on the right to paid annual leave provided that :

• by law,
• respect the essential content of this right,
• meet general interest objectives recognized by the EU.

With regard more specifically to employees who have been prevented from exercising their right to paid annual leave due to a work stoppage, the CJEU has already ruled that an unlimited accumulation of all acquired paid annual leave entitlements - which every worker is entitled to - does not meet the very purpose of the right to paid annual leave, which is to allow the worker to rest and enjoy a period of relaxation (CJEU, September 22, 2022, C-518/20 and C-272/20). Beyond this very purpose, an unlimited postponement would be devastating for the organization of any company. For example, it would be tantamount to allowing an employee who acquired paid leave in 2013 - which he could not have taken at that time - to take it in 2024 (! ); not to mention the fact that over the years he may have accumulated a significant amount of leave... Fortunately, the CJEU notes this difficulty and points out that Article 7 of the abovementioned Directive does not preclude national provisions or practices limiting the accumulation of paid annual leave entitlements by a carry-over period on the expiry of which those entitlements lapse, provided that the said carry-over period :

• guarantees, in particular, that workers have access to rest periods that can be staggered, planned and made available on a longer-term basis;
• substantially exceeds the duration of the reference period for which it is granted.

In the present case, the CJEU considers that the requests made by employees are consistent with the purpose of paid annual leave, provided that they are limited to rights acquired and not exercised, due to long-term stoppage of work, for 2 consecutive reference periods and introduced less than 15 months after the end of the reference period Even in the absence of a national provision setting an express temporary limit on the deferral of CP rights. The European court thus confirms its case law on the duration of this deferral (15 months), adding this time that the employee's request may be limited to 2 consecutive reference periods (CJEU, November 22, 2011, KHS C-214/10). While such a limitation to limit employees' requests is naturally welcome, it is nevertheless hard to see how the possibility for an employee to take CP acquired over the reference period N-2 is consistent with the very purpose of CP, given the significant gap that can exist between the acquisition period and the period of taking. Finally, to come back to the 15-month period, this may seem particularly long for certain companies that have to deal with employees returning from long-term sick leave and who wish to be absent again... *** Let's now hope that French legislators will quickly take up the issue - which, according to the various reports we have received, they are likely to do - and set a deferral limit that will (at last) provide companies with a degree of security. In the meantime, there is no doubt that the latter can rely on the above-mentioned European jurisprudence to oppose requests to carry over paid leave made more than 15 months after the end of the reference period. To be continued.