ECJ Decision: Working Time Directive Does Not Require Accrual of Annual Leave During Parental Leave

In Tribunalul Botoşani v Dicu (Case C-12/17), the ECJ has held that a Romanian law which ‘suspends’ the employment contract during parental leave and prevents the accrual of annual leave during this time is permissible, and does not infringe the Working Time Directive.

Ms Dicu was a Judge at the Royal Court of Botosani. After having a baby, she took 4 months’ maternity leave followed by 6 months’ parental leave and 30 days’ annual leave.

In Romania, employees are entitled to 35 days’ paid leave. Ms Dicu had only taken 30 days’ leave that year and so upon her return to work, she requested to take the final 5 days. Her employer refused on the basis that she had not accrued holiday during parental leave, given that it was not a period of ‘actual work’.

Ms Dicu brought a claim seeking a declaration that her period of parental leave should have been regarded as a period of actual work. The matter was eventually referred by the Court of Appeal to the European Court of Justice (ECJ), asking whether it was lawful for the Romanian national law not to consider a period of parental leave ‘actual work’ for the purposes of calculating annual leave entitlement.

The ECJ held that the Romanian law was lawful and more specifically, did not infringe Article 7 of the Working Time Directive. The ECJ distinguished parental leave from periods of sick leave and maternity leave (during which time holiday continues to accrue under Romanian law), focusing on the fact that sick leave is usually unforeseeable and beyond control or the worker, and maternity leave is intended to protect the health of a mother and safeguard the special relationship between mother and baby. The Court identified that parental leave is neither unavoidable nor unforeseeable but tends to reflect an individual’s personal decision to care for their child.

This decision has limited impact in a UK context because UK law provides for the continuation of the employment contract during parental leave. In terms of holiday accrual, it is clear under UK law that all workers are entitled to 5.6 weeks’ holiday a year (prorated in certain specified situations) and there is no requirement for ‘actual work’ to be done. Accordingly, in the UK, the 5.6 weeks’ holiday entitlement will continue to accrue during any period of parental leave.

That said, this case could still be relevant to other types of leave such as where an employee takes a sabbatical. It is unclear as it stands whether it would be lawful under UK law to ‘suspend’ the employment contract during a sabbatical, preventing accrual of annual leave. It seems though, that the only sure way of guaranteeing that holiday will not accrue in this scenario would be to terminate the employment contract and offer re- engagement.

Finally, it is possible that the outcome of this case could prompt some employers to argue that contractual annual leave (i.e. any leave in addition to the legal minimum of 5.6 weeks) does not accrue during a period of parental leave. However, any economic incentive in taking this approach may well be outweighed by the potential detrimental impact on staff morale and the practicalities involved in recalculating leave entitlement.

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