A worker unlawfully dismissed and reinstated has the right to receive the allowance in lieu of leave not taken

Prepared by Francesca Tironi and Valentina Panettella

With the judgment No. 6319 of March 8, 2021, the Court of Cassation, on the issue of compensation for damages in case of unlawful dismissal, transposes the ruling of the Court of Justice of the European Union with the judgment of June 25, 2020, Joined Cases C-762/18 and C-37/19, according to which, in the time interval between the date of dismissal and the date of reinstatement, the worker is entitled to receive the allowance in lieu of holidays and leave not taken.

According to the Luxembourg judges, the right to leave, provided for in Article 31(2) of the Charter of Fundamental Rights of the European Union and Directive 2003/88/EC, as interpreted by the Court of Justice, cannot be made conditional on the actual performance of work where such performance is prevented by unforeseeable factors beyond the employee’s control, including the employer’s initiative, which has proved to be unlawful.

The Court of Cassation’s consolidated position (Court of Cassation, section of labour, no. 18707/08; Court of Cassation, section of labour, no. 24270/16), on the other hand, excluded the replacement indemnity for holidays and leave not taken in view of the fact that its recognition was closely linked to the performance of work (while the worker unlawfully dismissed, in the period of time between dismissal and reinstatement, is in a situation, albeit forced, of “rest from work”).

According to the Court of Justice, on the contrary, the right to paid annual leave not only has the status of a principle of EU social law, but is also expressly enshrined in Article 31(2) of the Charter, to which Article 6(1) TEU gives the same legal value as the Treaties.

Although the purpose of the right to leave is dual, i.e. to allow the worker to rest from the performance of the tasks assigned to him under his contract of employment and to benefit from a period of relaxation and recreation, the Court of Justice has emphasised that in certain specific situations, where the worker is unable to carry out his duties, the right to paid annual leave cannot be made conditional by a Member State on the obligation to have actually worked.

The Court equated the situation of a worker who finds himself in the period between wrongful dismissal and reinstatement with that of the occurrence of incapacity for work due to illness (both of which are unforeseeable and beyond the worker’s control), so that the period between the date of wrongful dismissal and the date of the worker’s reinstatement in his post must be treated as a period of actual work for the purposes of determining annual leave entitlement.

Let’s Talk

For a deeper discussion, please contact:

Francesca Tironi

PwC TLS Avvocati e Commercialisti