The Right of Unused Leave


In a judgement the Court of Justice of the European Union has confirmed that an employee remains entitled to an allowance by way of compensation for any days of annual leave which have not been availed of during the period of employment.

Prior to entering into the merits of the case, it is important to note that the EU’s Working Time Directive is applicable to all member states, Malta included. The Directive establishes that every worker has the right of four weeks’ paid leave and such paid leave may be replaced by an allowance in lieu where the employment relationship has been terminated.

The case in question was in respect of an Austrian civil servant who retired from his job, and prior to him retiring, while he was meant to be on vacation leave, he fell ill and instead availed of his sick leave.

The Court stated that the Directive provides that every worker has the right to the four weeks of paid leave, irrespective of the state of their health and no matter how the working relationship had ended. The Court in fact noted that the Directive specifically safeguards’ the employee’s position by stating that such allowance for vacation leave may be availed of in lieu such the relationship between the employer and the employee be severed. In a way this allows an employee who has not been able to ‘enjoy’ the vacation leave during the employment, but can do so after.

The Court also went on to say the fact that the employment relationship ended due to retirement age, did not change anything and that the employee would still be entitled to his vacation leave in lieu.

The Court also went on to say that the right to vacation leave in respect of employees is twofold:

  1. For the employee to have a break from his work; and
  2. To enjoy the period off and to relax.