DS v Koch Personaldienstleistungen GmbH

In this case, the Court of Justice of the European Union (CJEU) found that EU law precludes a provision in a Collective Agreement for temporary employment (MTV) excluding paid annual leave from the calculation of working time for the purpose of establishing entitlement to an overtime bonus.

The facts concern DS, a Koch employee who challenged the practice of not including paid annual leave in the number of hours worked when calculating his overtime bonus – a practice in line with the MTV. After his action was dismissed at first instance and on appeal, DS brought an appeal on a point of law (Revision) before the German Federal Labour Court which in turn lodged a request for preliminary ruling with the CJEU.

The CJEU was requested to address the compatibility of the provision in the MTV with Article 7(1) of Directive 2003/88/EC concerning certain aspects of the organisation of working time, read in the light of Article 31(2) of the Charter of Fundamental Rights of the European Union.

It was held that the provision foreseen in the MTV could be considered a potential obstacle to the enjoyment of the worker’s right to annual leave as taking one’s leave may result in a financial disadvantage for the worker. The CJEU found that any such practice or omission by an employer that may potentially deter a worker from taking his or her annual leave is incompatible with the purpose of the right to paid annual leave [para. 32]. 

The CJEU concluded that Article 7(1) of Directive 2003/88/EC, read in the light of Article 31(2) of the Charter, must be interpreted as precluding a provision in a collective labour agreement under which, in order to determine whether the threshold of hours worked granting entitlement to overtime pay is reached, the hours corresponding to the period of paid annual leave taken by the worker are not to be taken into account as hours worked [para. 47].

In its decision, the CJEU reiterated that every worker’s right to paid annual leave must be regarded as a particularly important principle of EU social law from which there may be no derogations [para. 23]. The CJEU also underscored the importance of paid annual leave as a principle of EU social law as expressly laid down in the Charter of Fundamental Rights of the European Union for which compliance must be observed [paras. 24-25].

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Although the Federal Labour Cour did not formally raise the question of discrimination of temporary workers in its referral, the applicants also argue that this provision in the temporary workers collective agreement (MTV) implies a discrimination of temporary workers which is contrary to Art. 5 of Directive 2008/104/EC.

A referral to the Court dealing exactly with this question of discrimination is forthcoming.