Mrs Bauer is the sole legal heir of her husband, who died on 20 December 2010. Mrs Broßonn is the sole legal heir of her husband, who died on 4 January 2013. Each of their husbands had accrued but untaken annual leave with their employers at the time of their deaths. Both women brought claims, arguing that a payment in lieu of their husbands’ accrued but untaken annual leave should be paid to their estates.
Can financial compensation be granted to form part of the estate of the deceased? Does the heir of a worker have a right to financial compensation in lieu of the deceased worker’s untaken paid annual leave?
The CJEU found that an heir does have the right to payment in lieu of a deceased worker’s untaken annual leave. It set out that whilst the worker’s death inevitably means that annual leave will not be taken, that does not mean it should be accepted that this means a total loss to the entitlement of payment for that annual leave. The Court gave the example that if a worker were to retire and upon retirement it was noted that they were unable to take their annual leave because of illness, they would nevertheless be entitled to the financial aspect of paid annual leave not taken. A worker in such circumstances is unable to enjoy the period of leave as it is intended nor can he perform his occupational duties. The period of occupational inactivity means that the worker is only ever able to benefit from the financial aspect of the payment in lieu.
The CJEU went on to state that losing the right to paid annual leave on death when a worker has been prevented from taking leave due to illness leading up to death would undermine the very substance of the right to annual leave. Moreover, the right to paid annual leave is pecuniary in nature and is therefore intended to become part of that worker’s assets.
This unusual case gives the right to paid annual leave on death in the same circumstances as if a worker had retired or if their employment had been terminated.
As a CJEU decision, it will be interesting to see how the UK employment tribunal system applies it. It could be that it is only applied to the first 20 days of leave guaranteed by the European Working Time Directive.