Case C-569/16, Bauer – an heir’s accrued leave rights post-Bollacke but contra legem

After the CJEU’s labour law Bollacke judgment, if a worker had accrued paid annual leave but had died before taking it, then it looked like the heir to his estate could claim a cash equivalent from the employer. Yet the effect of this new EU labour law right seems to be drained by old German inheritance law. Thus, what is a German labour law judge to do? Applying the EU’s ‘working time’ Directive 2003/88/EC or Article 31(2) of the EU Charter would clearly be contra legem so there is no obligation on the national court to give effect to it. However, if EU labour law prevails, then does it matter that the employer was a public body (Case C-569/16) or a private company (Case C-570/16)?

If a worker accrues paid annual leave but dies before taking it, then the heir to his estate can claim a cash equivalent from the employer by dint of the EU’s ‘working time’ Directive 2003/88/EC (OJ [2003] L299/9). At least, that seemed to be the significance of the CJEU’s 2014 judgment in Case C-118/13, Bollacke ECLI:EU:C:2014:1755.

However, two years on from Bollacke and now Germany’s highest labour court has made two references about the correct application of EU law in respect of a widow’s right to the accrued but unused leave of her dead husband.

Case C-569/16, Bauer
The heir in this case is claiming 6 000 euro from her dead husband’s public-sector employer in lieu of the holiday rights and leave he had accrued but not used at the time of his death.

The widow believes she is entitled to that amount by dint of the annual leave rules in Article 7 of the ‘working time’ directive, which provides:

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 of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

She also relies on the CJEU’s Bollacke ruling, in which the CJEU had said:

24 Finally, it should be noted that receipt of financial compensation if the employment relationship has ended by reason of the worker’s death is essential to ensure the effectiveness of the entitlement to paid annual leave granted to the worker under Directive 2003/88.

30 It follows from the foregoing considerations that the answer to the questions referred is that Article 7 of Directive 2003/88 must be interpreted as precluding national legislation or practice, such as those at issue in the main proceedings, which provide that the entitlement to paid annual leave is lost without conferring entitlement to an allowance in lieu of leave outstanding, where the employment relationship is terminated by the death of the worker. Receipt of such an allowance is not to be dependent on a prior application by the interested party.

However, the employer denies it is under a legal obligation to pay the estate because it cannot do so by dint of the rules of German inheritance law. Those rules stop the holiday rights and accrued leave from belonging to the dead man’s estate. The employer adds that since this is a feature of German inheritance law, there is no obligation on a national court to apply EU law contra legem. Furthermore, it is up to German courts to determine whether German domestic law can bear an EU-conforming interpretation (BVerfG 26 September 2011, 2 BvR 2216/06, 2 BvR 469/07).

In light of those arguments, the judges at Germany’s highest labour court do not know what the correct interpretation of EU law should be. On the one hand, the CJEU’s case law to date has emphasised the purpose of the Directive as being to ensure that the worker rests, relaxes, and enjoys a period of leisure.
An example of the CJEU’s reasoning is to be found in Case C-194/12, Maestre Garcia in which the CJEU said:

18 It is, moreover, common ground that the purpose of entitlement to paid annual leave is to enable the worker to rest and to enjoy a period of relaxation and leisure. The purpose of entitlement to sick leave is different. Sick leave is given to the worker so that he can recover from an illness that has caused him to be unfit for work (see Case C-78/11 ANGED [2012] ECR, paragraph 19).

On the other hand, that premiss looks wrong: a dead worker cannot benefit from the right to rest, relaxation and leisure. In that context, the CJEU’s Grand Chamber had also said in C‑214/10, KHS (ECLI:EU:C:2011:761):

43 In the light of the foregoing it may reasonably be considered that a period of 15 months for carrying over the right to paid annual leave, such as the period at issue in the main proceedings, is not contrary to the purpose of that right, in that it ensures that the latter retains its positive effect for the worker as a rest period.

Judge Brühler and four others sitting on the bench decided to make a preliminary reference to the CJEU.

In anticipation of the CJEU’s official translation, the gist of the question in Bauer is whether either Article 7 of the working time Directive or Article 31(2) of the EU Charter precludes the German civil code stopping the heir to a dead worker’s estate claiming from the employer a cash equivalent for accrued but unused holiday.

Case C-570/16, Willmeroth
This sad case also stems from the death of a worker. It differs from Bauer in so far as the employer in question was a private company. Thus, a second question has been added on to the Willmeroth reference. Judge Brühler and four others sitting on the bench would like to know whether either Article 7 of the working time Directive or Article 31(2) of the EU Charter can be invoked by a private person against a private company. The key to this question being paragraph 20 of the CJEU’s ruling in Case C-91/92, Faccini Dori.

The ability of a national court not to apply EU law contra legum occasionally features in preliminary references made to the CJEU. However, in one of the CJEU’s judgments, the CJEU’s judges slightly reformulated the law in this area. The case concerned EU database law and Dutch law. For a brief discussion of the reformulation; see further, ‘Autonomy, Comparison Websites and Ryanair (2015) Intellectual Property Quarterly 386-406.

Readers of EU Law Radar interested in labour law may also like to know that since those two post-Bollacke cases have been referred to the CJEU, a third has been made by a different German court. This case concerns an academic who is alive but was retired before he could take the 51 days of leave he had accrued. There could be a link to the CJEU’s eventual judgments in Bauer and Willmeroth in so far as the academic had been working for the Max Planck Institute – an institute that is a private body, whose financing generally comes from public monies, and whose charter applies to private law relations. The case is docketed as Case C-684/16, Max-Planck-Gesellschaft zur Förderung der Wissenschaften.

In that context, the ability of a person to invoke EU law against an emanation of the state is currently at stake in Case C-413/15, Farrell (No.2) – identifying an emanation of the state.