The case concerned a German worker who, following the termination of the employment relationship, requested the payment of an allowance corresponding to 101 days of paid annual leave accumulated between 2013 and 2017 and not taken.

The employer refused to pay the allowance, and the worker filed a case. 

The German Federal Labour Court requested the incidental intervention of the Court of Justice for a preliminary ruling concerning the interpretation of Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 and Article 31(2) of the Charter of Fundamental Rights of the European Union.

According to Article 7(1) of Directive 2003/88, Member States are to take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks by the conditions for entitlement to, and granting of, such leave laid down by national legislation and practice. Under Article 7(2) thereof, the minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

The Court stated that the right to paid annual leave acquired by a worker is time-barred after three years - which begins to run at the end of the year in which that right arose - only where the employer has put the worker in a position to exercise that right.

The Court underlined that the worker must be regarded as the weaker party in the employment relationship. The burden of ensuring that the right to paid annual leave is exercised should not rest fully on the worker. It follows that the loss of the right to paid annual leave at the end of a given leave year or carry-over period can occur only that the worker concerned has had the opportunity to exercise that right in good time.

The Court also addressed the employer's plea of limitation based on Section 195 of the German Civil Code, under which a creditor's claims are time-barred three years after the end of the year in which his right arose. 

Recalling its previous judgment of 6 November 2018 in Case No. C-684/16 notes that allowing an employer to invoke the statute of limitations of an employee's rights without actually putting the employee in a position to exercise them would lead to unlawful enrichment of the employer to the detriment of the objective of respect for the health of the employee, enshrined in Article 31(2) of the Charter of Fundamental Rights of the European Union.

It is therefore important for employers to make employees take, or at least put them in a position to take, their accrued holidays year by year.