Case C‑539/12

Z.J.R. Lock

v

British Gas Trading Limited

(Request for a preliminary ruling from the Employment Tribunal, Leicester)

‛Social policy — Organisation of working time — Directive 2003/88/EC — Right to paid annual leave — Composition of remuneration — Basic salary and commission according to turnover realised’

Summary — Judgment of the Court (First Chamber), 22 May 2014

1. Social policy — Protection of the safety and health of workers — Organisation of working time — Right to paid annual leave — A particularly important principle of European Union social law

   (Art. 6(1) TEU; Charter of Fundamental Rights of the European Union, Art. 31(2); European Parliament and Council Directive 2003/88; Council Directive 93/104)

2. Social policy — Protection of the safety and health of workers — Organisation of working time — Right to paid annual leave — Allowance for leave calculated exclusively on the basis of basic salary, without taking into account commission constituting part of the remuneration

   (European Parliament and Council Directive 2003/88, Art. 7)

3. Social policy — Protection of the safety and health of workers — Organisation of working time — Right to paid annual leave — Assessment by the national court or tribunal of the methods of calculation of the financial allowance in respect of leave where the remuneration consists of several components — Criteria set out by the case-law of the Court of Justice and objective pursued by Article 7 of Directive 2003/88 to be taken into account

   (European Parliament and Council Directive 2003/88, Art. 7)

1.  See the text of the decision.

   (see para. 14)

2.  Article 7(1) of Directive 2003/88 concerning certain aspects of the organisation of working time must be interpreted as precluding national legislation and practice under which a worker whose remuneration consists of a basic salary and commission, the amount of which is fixed by reference to the contracts entered into by the employer as a result of sales achieved by that worker, is entitled, in respect of his paid annual leave, to remuneration composed exclusively of his basic salary.

   The purpose of providing payment for annual leave is to put the worker, during such leave, in a position which is, as regards his salary, comparable to periods of work.

   Admittedly, the conditions laid down in Article 7 of Directive 2003/88 appear to be observed by the national legislation and practice in so far as, during the period of his annual leave, the worker receives a total amount comparable to that earned during periods of work. Thus, that amount paid in respect of both his annual leave and the sales achieved by him during the weeks preceding the period of his annual leave enables the worker to take the leave to which he is entitled.

   However, notwithstanding the remuneration received by the worker during the period in which he actually takes his annual leave, he may be deterred from exercising his right to annual leave, given the financial disadvantage which, although deferred, is nonetheless genuinely suffered by him during the period following that of his annual leave.

   (see paras 17, 20, 21, 24, operative part 1)

3.  The methods of calculating the commission to which a worker, whose remuneration consists of a basic salary and of commission, the amount of which is fixed by reference to the contracts entered into by the employer as a result of sales achieved by that worker, is entitled in respect of his annual leave must be assessed by the national court or tribunal on the basis of the rules and criteria set out by the case-law of the Court of Justice and in the light of the objective pursued by Article 7 of Directive 2003/88 concerning certain aspects of the organisation of working time.

   Any inconvenient aspect which is linked intrinsically to the performance of the tasks which the worker is required to carry out under his contract of employment and in respect of which a monetary amount is provided and included in the calculation of the worker’s total remuneration must necessarily be taken into account for the purposes of calculating the amount to which the worker is entitled during his annual leave.

   In addition, all components of total remuneration relating to the professional and personal status of the worker must continue to be paid during his paid annual leave. Thus, any allowances relating to seniority, length of service and to professional qualifications must be maintained.

   By contrast, the components of the worker’s total remuneration which are intended exclusively to cover occasional or ancillary costs arising at the time of performance of the tasks which the worker is required to carry out under his contract of employment need not be taken into account in the calculation of the payment to be made during annual leave.

   (see paras 29-31, 35, operative part 2)

Case C‑539/12

Z.J.R. Lock

v

British Gas Trading Limited

(Request for a preliminary ruling from the Employment Tribunal, Leicester)

‛Social policy — Organisation of working time — Directive 2003/88/EC — Right to paid annual leave — Composition of remuneration — Basic salary and commission according to turnover realised’

Summary — Judgment of the Court (First Chamber), 22 May 2014

1. Social policy — Protection of the safety and health of workers — Organisation of working time — Right to paid annual leave — A particularly important principle of European Union social law

   (Art. 6(1) TEU; Charter of Fundamental Rights of the European Union, Art. 31(2); European Parliament and Council Directive 2003/88; Council Directive 93/104)

2. Social policy — Protection of the safety and health of workers — Organisation of working time — Right to paid annual leave — Allowance for leave calculated exclusively on the basis of basic salary, without taking into account commission constituting part of the remuneration

   (European Parliament and Council Directive 2003/88, Art. 7)

3. Social policy — Protection of the safety and health of workers — Organisation of working time — Right to paid annual leave — Assessment by the national court or tribunal of the methods of calculation of the financial allowance in respect of leave where the remuneration consists of several components — Criteria set out by the case-law of the Court of Justice and objective pursued by Article 7 of Directive 2003/88 to be taken into account

   (European Parliament and Council Directive 2003/88, Art. 7)

1.  See the text of the decision.

   (see para. 14)

2.  Article 7(1) of Directive 2003/88 concerning certain aspects of the organisation of working time must be interpreted as precluding national legislation and practice under which a worker whose remuneration consists of a basic salary and commission, the amount of which is fixed by reference to the contracts entered into by the employer as a result of sales achieved by that worker, is entitled, in respect of his paid annual leave, to remuneration composed exclusively of his basic salary.

   The purpose of providing payment for annual leave is to put the worker, during such leave, in a position which is, as regards his salary, comparable to periods of work.

   Admittedly, the conditions laid down in Article 7 of Directive 2003/88 appear to be observed by the national legislation and practice in so far as, during the period of his annual leave, the worker receives a total amount comparable to that earned during periods of work. Thus, that amount paid in respect of both his annual leave and the sales achieved by him during the weeks preceding the period of his annual leave enables the worker to take the leave to which he is entitled.

   However, notwithstanding the remuneration received by the worker during the period in which he actually takes his annual leave, he may be deterred from exercising his right to annual leave, given the financial disadvantage which, although deferred, is nonetheless genuinely suffered by him during the period following that of his annual leave.

   (see paras 17, 20, 21, 24, operative part 1)

3.  The methods of calculating the commission to which a worker, whose remuneration consists of a basic salary and of commission, the amount of which is fixed by reference to the contracts entered into by the employer as a result of sales achieved by that worker, is entitled in respect of his annual leave must be assessed by the national court or tribunal on the basis of the rules and criteria set out by the case-law of the Court of Justice and in the light of the objective pursued by Article 7 of Directive 2003/88 concerning certain aspects of the organisation of working time.

   Any inconvenient aspect which is linked intrinsically to the performance of the tasks which the worker is required to carry out under his contract of employment and in respect of which a monetary amount is provided and included in the calculation of the worker’s total remuneration must necessarily be taken into account for the purposes of calculating the amount to which the worker is entitled during his annual leave.

   In addition, all components of total remuneration relating to the professional and personal status of the worker must continue to be paid during his paid annual leave. Thus, any allowances relating to seniority, length of service and to professional qualifications must be maintained.

   By contrast, the components of the worker’s total remuneration which are intended exclusively to cover occasional or ancillary costs arising at the time of performance of the tasks which the worker is required to carry out under his contract of employment need not be taken into account in the calculation of the payment to be made during annual leave.

   (see paras 29-31, 35, operative part 2)