On 25 November 2021 (C-233/20), the ECJ ruled that Sec. 10 par. 2 of the Austrian Act on Paid Leave is contrary to Union law. The matter underlying the ruling is a case from 2018, in which the employee claimed compensation for about 7 days of unused leave after he had resigned from his job. His resignation was unfounded (without cause).
The Austrian legal situation:
Under Sec. 10 par. 2 of the Austrian Act on Paid Leave, there is no entitlement to compensation for unused paid leave if the employee resigns early without cause. Sec. 10 par. 2 of the Austrian Act on Paid Leave refers to the leave year in which the unfounded early resignation occurs, but not to previous leave years and leave entitlements from these. In the event of early resignation for cause, compensation for unused paid leave is due. The Act on Paid Leave draws distinctions as to when an employee is entitled to compensation for unused paid leave.
From the grounds for the ECJ's ruling:
The ECJ ruled that the reason for the termination of employment was not decisive with regard to the compensation for unused paid leave. According to the ECJ, the purpose of leave would precisely be to allow employees to recuperate and have a period of relaxation and leisure after performing the activities incumbent on them under their employment contracts. It would also be irrelevant whether an employee could have used up the leave while the employment relationship was ongoing. It would therefore not for the national courts to determine whether it was impossible for an employee to use up leave.
Practical significance of the ruling
According to the ECJ's ruling, employees are therefore also entitled to compensation for unused days of paid leave in case of unfounded early resignation. The following prerequisites have to be fulfilled:
- the employee has actually performed work during the period covered by the claim,
- the employment relationship has ended, and
- the employee has not used up all his/her leave.
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