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Right to paid annual leave for the period from the wrongful dismissal to the reinstatement into the previous position

Every employee is entitled to paid annual leave for at least four weeks (twenty working days). The pecuniary compensation of the unused annual paid leave is forbidden to the exception of cases of termination of the employment agreement.

These rules are provided in Directive 2003/88 of the European Parliament and Council and are adopted in the legislations of the Member States of the European Union.

The rules seem very clear when applied to cases of valid or lawfully terminated employment agreements.

The application of the same rules in cases of wrongful dismissal and subsequent reinstatement into previous job position however led to many problems. The following specific issues were controversially addressed:

In its judgment dated 25.06.2020 the Court of the European Union (the “Court”) gave positive response to the both questions. The Court also determined whether, who (the previous or new employer) shall pay the compensation for the unused paid annual leave.

What are the facts that led to the questions to the Court

The Court replied in a common judgment to inquiries of the Regional Court of Haskovo from 2018 and the Supreme Court of Cassation of Italy from 2019 under two separate cases.

The case in Bulgaria briefly:

The case in Italy briefly:

How did the Court answer?

The Court established the following regarding the right:

The Court established the following regarding the compensation:

What is the meaning of the Court’s judgement for Bulgaria?

The Court’s judgment reverses the settled case law in Bulgaria that the right to use paid annual leave should be bound to the actual working for the employer.

From now on, an employee wrongfully dismissed and reinstated into position will be entitled to paid annual leave for the period where he did not work for the employer. If the employment agreement is terminated again, regardless of the grounds for that, the individual will be entitled to compensation for unused paid annual leave.

The article above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.