Her Majesty's Revenue and Customs v Stringer

The Schultz -Hoff - decision is a judgment of the European Court of Justice (ECJ ) from 2009 to reconcile German and British holidays right with Directive 2003/88/EC concerning certain aspects of the organization of working time ( so-called Working Time Directive ). The Court ruled that an employee 's entitlement to paid annual leave does not lose when he could not take this leave due to illness. The unused leave is rather to be settled financially. National laws that contradict this principle, contrary to the Working Time Directive.

The decision had a significant impact on the German right to leave and - perhaps - even to the termination practice German employer. The European Court has been criticized for not consider these effects. The end of 2011, the Court relativized in the KHS decision be ruling in Schultz -Hoff.

Core statements of the Schultz -Hoff - decision

The European Court of Justice the questions to decide whether a because of " sick leave " ( "sick leave", in Germany " incapacity " ) absent employee is entitled to take paid annual leave during that sick leave or the period of incapacity and whether and if so to what extent an employee who has been missing during the reference period and / or a vacation carry-over period for sick leave / disability in whole or in part, shall be entitled to an allowance for unused at end of contract paid annual leave.

Standard of review was Article 7 of Directive 2003/88/EC ( working time directive ): This is:

The Court first confirmed that national legislation or practice may determine that an employee may take any leave during the period of incapacity. Such a prohibition is not contrary to Article 7, paragraph 1 of Directive 2003/88/EC.

However, the entitlement to paid annual leave must not expire at the end of the reference period and / or the vesting period if the employee his right to paid annual leave could not exercise because he was on sick leave for the whole period or part thereof. National laws or practices which provide for a loss of leave in these cases are not compatible with Article 7 § 1 of the Working Time Directive 2003/88/EC according to the ECJ.

In addition, an employee must receive an allowance for vacation at the end of the employment relationship, the illness he could not take it. Unless allow or exclude national legislation or practice, such a claim, they infringe Article 7, paragraph 2 of the Working Time Directive.

Facts

The applicant in the main proceedings, Gerhard Schultz- Hoff, 1971 at the German Federal Pension Insurance and its predecessors employed. In 2004, he was able to work until early September. He was then continuously until September 30, 2005, the date on which his employment ended, on sick leave. An application for Relaxing rejected the German Federal Pension Insurance in May 2005 on the grounds that Schultz -Hoff no vacation could be granted because of his disability. In September 2005, Gerhard Schultz -Hoff was a perpetual annuity granted with retroactive effect from 1 March 2005. Then sued Schultz -Hoff and his former employer to reimbursement of paid leave for the years 2004 and 2005. He demanded a compensation of € 14094.78 gross.

Procedures in first and second instance

The Labour Court Dusseldorf dismissed the case in March 2006, as the holiday entitlement has lapsed and there is therefore no entitlement to an allowance in lieu. It appealed to the long-standing case law of the Federal Labour Court. According to this case went entitlement to leave no later than the end of the so-called transfer period, as a rule, so according to § 7 paragraph 3 sentence 3 Federal Holidays Act on 31 March of the following year. This was after the Federal Labour Court considers that even if the sick leave could not be taken up. A claim for holiday compensation did not arise in these cases.

Gerhard Schultz -Hoff appealed against the judgment of the Labour Court appeal before the Court of Appeal a Dusseldorf. That court (LAG ) wanted to uphold the action and Gerhard Schultz -Hoff award the coveted holiday allowance. It looked prevented by the law of the Federal Labour Court. In similar cases, the BAG had the judgments of the state labor court is always removed, so lawyers spoke of a " legal holiday feud " between the two courts. Therefore, the Düsseldorf Court of Appeal stayed the proceedings and referred the case to the European Court of Justice. The Court should - in shortened - to decide whether the case law of the Federal Labour Court on the expiry of leave and holiday compensation claims was compatible with European law.

Proceedings before the European Court of Justice

The method Schultz -Hoff was carried out by the ECJ as a so-called preliminary ruling procedure. In such proceedings, the Court shall, on submission of the court of a Member State ( here: the Higher Labour Court Dusseldorf ) the interpretation of European law ( here: the Working Time Directive ). The legal interpretation of the ECJ is binding on the national court. The national court expresses its judgment based on the legal opinion of the European Court of Justice, and thus decides the output process.

The Court linked the case Schultz -Hoff (case C-350/06 ) with Case Stringer (case C-520/06 ), which was presented to him by the House of Lords for a decision. The House of Lords was at this time the supreme court of appeal in civil matters. In the British case, a worker named Stringer had in common with other workers against Her Majesty's Revenue and Customs, a tax authority with 67,000 employees, sued. In the Anglo -Saxon legal space under the name Her Majesty's Revenue and Customs v Stringer, the Schultz -Hoff decision is therefore known.

The hearing before the Court was held on 20 November 2007. The judgment was delivered on 20 January 2009. It confirmed the legal opinion of the LAG Dusseldorf, after which the leave is not forfeited in case of permanent disability, and thus deprived the conflicting case law of the Federal Labour Court, the legal basis.

Consequences of the ECJ ruling

Judgment of the district labor court Dusseldorf

On 2 February 2009, the LAG Dusseldorf handed down its ruling in Schultz -Hoff against German Federal Pension Insurance. Because since the decision of the ECJ only a few days had passed, it was assumed that the LAG already laid out the reasoning and had waited only the promulgation of the ECJ judgment. That court said to Gerhard Schultz -Hoff and a leave allowance in the amount of 12081.00 EUR Gross plus interest. The German Federal Pension Insurance accepted the verdict and did not go in revision.

Case law amending the Federal Labour Court

As a result of Schultz -Hoff - decision the Federal Labour Court adjusted its case-law to the ECJ. The BAG took to an appeal against a judgment of the Higher Labour Court of Cologne on the occasion. It ruled that the right to compensation for legal full or partial leave is not extinguished if the employee falls ill until the end of the leave year and / or the transfer period and therefore is unable to work. The BAG admitted so that the European law of its own case-law, but at the same time remarked in an aside: ". Given its binding to the interpretation of results of the competent court of the European Communities, the Senate has not run, if he agrees to the interpretation of the ECJ "

Reactions

While the Federal Labour Court accepted the provisions of the European Court reluctantly, criticized the German law the Schultz -Hoff - decision and its impact on practice. Was particularly sharp comments on the Schultz -Hoff decision by former federal judge Wolfgang leash man. Leash man, from 1991 to 2001 Chairman of the charge of the right to leave 9th Division of the Federal Labour Court, said the verdict was " worthless for the realization of legal relationships ." After all it is capable of as " to serve illustrative material for the low point of the state of the law on which the European Union is now due to the jurisprudence of the European Court of Justice".

Employers were advised to consider a termination of employment in permanent diseased workers. This could be avoided financial burdens that would otherwise arise by necessary holiday settlements. Is not detectable if it has actually come as a result of Schultz -Hoff decision to increased terminations of long -term illness workers. The labor justice leads to no statistics.

As a result of the changed -law employees could make higher leave allowance claims. Thus spoke, for example, the Hessian Regional Labour Court a cook who had lost their jobs because of illness, to a leave allowance in the amount of EUR 29198.23.

KHS decision

In November 2011, the European Court relativized with the KHS decision ( also decision Schulte- called ) its decisions taken in Schultz- Hoff case statements: In Case C-214/10 - KHS against Winfried Schulte - it was about the settlement of leave entitlement for the years 2006, 2007 and 2008., the ECJ noted that the Working Time Directive does not require that vacation should be accumulated indefinitely. A specific time limit should not be exceeded. About such a limit, the annual leave lacks namely its positive effect for the worker as recovery time. In addition, the employer must be protected against the danger of accumulation of too long absence periods and the difficulties that might arise from the organization of work.

An expiration of leave entitlement under national law is admissible when the transfer period clearly may exceed that period. On the merits, KHS against Schulte transmission period was fifteen months, the period twelve months. This left the Court sufficient; leave entitlement by Winfried Schulte for the year 2006 was thus void. On the merits, Schultz -Hoff and the transfer period had only been six months.

The KHS decision of employer- lawyers welcomed as a " necessary correction of Schultz -Hoff ", which should have led the Federal Labour Court in Erfurt to " great relief ".