Opinion of Advocate General Ćapeta delivered on 23 March 2023.

• Jurisdiction: European Union
• Date: 23 March 2023
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

ĆAPETA

delivered on 23 March 2023(1)

Joined Cases C‑271/22 to C‑275/22

XT (C‑271/22)

KH (C‑272/22)

BX (C‑273/22)

FH (C‑274/22)

NW (C‑275/22)

v

Keolis Agen SARL,

joined party:

Syndicat national des transports urbains SNTU-CFDT

(Request for a preliminary ruling from the Conseil de Prud’hommes d’Agen (Labour Tribunal, Agen, France))

(Reference for a preliminary ruling – Social Policy – Organisation of working time – Charter of Fundamental Rights of the European Union – Article 31(2) – Directive 2003/88/EC – Article 7 – Whether it may be relied upon in a dispute between individuals – Right to paid annual leave – Carry-over of paid annual leave due to long-term illness – National case-law allowing carry-over of leave without any time limit)

I. Introduction

1. Can a worker accumulate days of unused paid annual leave without any time limit, or does Article 7(1) of the Working Time Directive (2) require Member States to provide for limited carry-over periods? If so, what is a reasonable length for such a period?

2. Those are the main issues raised by the referring court, the Conseil des Prud’hommes d’Agen (Labour Tribunal, Agen, France). In addition, that court asks for clarification of the direct effect of the Working Time Directive in horizontal situations, given that the defendant in the main proceedings is a private operator running a public transport network.

3. The present case arises out of multiple references for a preliminary ruling made in the context of five disputes before the referring court. All of those disputes concern workers currently or formerly employed by Keolis Agen SARL, the company that manages the bus transport network for the urban area of Agen (France). Those workers asked their employer to recognise their entitlements to paid annual leave which they were unable to use during the reference year in which those entitlements arose, and brought disputes before the referring court when the employer rejected those requests. A trade union, the Syndicat national des transports urbains SNTU-CFDT, is intervening in those proceedings in support of the workers.

II. The dispute in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court

4. Keolis Agen is a company governed by private law that provides a public urban transport service of passengers by bus. The five applicants suing that company before the referring court are, or were, its workers.

5. Over the course of their respective employment contracts, all of the applicants were subject to extended periods of sick leave. (3) After their return to work or after termination of their employment contracts due to incapacity to continue their work, the applicants requested that Keolis Agen either allow them to use the days of annual leave which they were deprived of during their periods of sickness or, when the employment contracts were terminated, to pay them allowances in lieu.

6. Keolis Agen refused those requests. On the basis of the French Labour Code, (4) it considered that the applicants were not entitled to annual leave where absence from work lasted for more than a year due to an illness unrelated to work. In its view, that national law could not be set aside even if it were contrary to Article 7 of the Working Time Directive, as that directive does not create obligations for private parties.

7. Keolis Agen claims that due to the liberalisation of transport services in France, (5) the Working Time Directive cannot be relied on against it. Even if it is in the business of providing public transport,the ability of workers to rely directly on the Working Time Directive would place it in a worse competitive position in comparison to other private companies which remain subject to French law and not to that directive.

8. The applicants consider that they can rely on Article 7(1) of the Working Time Directive and Article 31(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’) against their employer and that those EU law provisions provide for their entitlement to annual leave even during periods of prolonged sickness. French law that provides to the contrary should, therefore, be set aside.

9. The dispute about direct effect of the Working Time Directive in the case at hand led to the first question of the referring court.

10. The second and third questions become relevant if the applicants are entitled to paid annual leave in respect of the reference years in which they were on sick leave. Those questions arise because, according to the referring court, French law does not regulate carry-over periods for unused annual leave; it does not specify whether such a right exists or not. It follows from the orders for reference and the observations of the parties that the two highest French courts developed conflicting positions on that issue. On the one hand, the case-law of the Cour de cassation (Court of Cassation, France) (6) suggests that no limit for the carry-over of unused entitlements to annual leave exists under French law. On the other hand, the Conseil d’État (Council of State, France) seems to consider that the right to unused annual leave expires 15 months after the end of the reference year in which the entitlement to that paid annual leave arose. (7) The latter reasoning seems to follow from the case-law of the Court of Justice in which it considered a 15-month period not to be contrary to the Working Time Directive. (8)

11. In the main proceedings, the referring court asks whether EU law contains such a requirement to provide for a carry-over period. If that is so, it also wonders what constitutes a ‘reasonable period,’ after which the entitlement to annual leave may lapse. In that respect, it explains that the claims for unused annual leave in the case at hand were all filed less than 15 months after the end of the reference period during which those entitlements arose.

12. Keolis Agen requested the referring court to refer the disputed questions to the Court of Justice. The applicants deemed that reference unnecessary and opposed that request.

13. In those circumstances, the Conseil de prud’hommes d’Agen (Labour Tribunal, Agen) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling (the questions are identical in all five joined cases):

‘(1) Must Article 7(1) of [the Working Time Directive] be interpreted as being directly applicable in relations between a private transport operator, with a single public service delegation, and its workers, in the light, in particular, of the liberalisation of the rail passenger transport sector?

(2) What is a reasonable carry-over period in respect of the acquired entitlement to four weeks’ paid annual leave within the meaning of Article 7(1) of [the Working Time Directive], in so far as the time during which annual leave may be accrued is one year?

(3) Is the application of an unlimited carry-over period in the absence of a provision of national law, a regulation or convention governing that period contrary to Article 7(1) of [the Working Time Directive]?’

14. Written observations were submitted to the Court by the applicants in the main proceedings and the Syndicat national des transports urbains SNTU-CFDT (together, ‘the applicants’), Keolis Agen, the French Government and the European Commission. No hearing was held.

III. Analysis

15. In recent years, there has been an increase in the number of cases related to paid annual leave coming before the Court of Justice. (9)

16. The present reference offers the Court another opportunity to contribute to a better understanding of the Working Time Directive, and to build upon its existing case-law on the matter.

17. The referred questions can be divided into two parts: the first question relating to the well-established concept of the direct effect of directives (A), and questions two and three, which I shall address jointly, concerning the carry-over periods in respect of unused paid annual leave (B).

A. On the direct effect of the Working Time Directive in horizontal situations

18. It follows from the orders for reference that the French Labour Code prevents a worker on sick leave for more than a year, which is unrelated to work, from acquiring an entitlement to annual leave. (10)

19. That national law would stand in contrast to Article 7 of the Working Time Directive, as interpreted by the Court. This clearly would follow from the judgment in Dominguez. (11)

20. In that case, which arose from the application of the same French law, the Court, building on its earlier case-law, (12) ruled that the Working Time Directive does not allow for the entitlement to paid annual leave to be made subject to the condition that the worker has actually worked. No worker, whether they are on sick leave during the reference period as a result of an accident at the place of work or elsewhere, or as the result of sickness of whatever nature or origin, can be denied the right to at least four weeks of paid annual leave. (13)

21. In short, the entitlement to paid annual leave results from the employment relationship and cannot be made subject to conditions. Member States may impose conditions for exercising the right to paid annual leave, but cannot make its very existence subject to conditions, including the requirement that the worker has actually worked. (14)

22. It is, therefore, clear from previous case-law that, directly on the basis of Article 7 of the Working Time Directive, the applicants acquired entitlements to paid annual leave during the years in which they were on sick leave.

23. The defendant does not deny or try to change that interpretation of the Working Time Directive. However, it argues that that directive cannot be applied to the case at hand to create an obligation for it, because the defendant is a company governed by...