Monday, 8 December 2008

European Union: Paid holiday schemes

Social dumping or healthy regulatory competition? Differences in pay, social contributions and working time between the member states of the European Union have certain consequences for the competitiveness of businesses located in different countries and for the well-being of their employees.

Worries about distortions have led to a separate treaty Article on the equivalence of paid holiday schemes within the European Community (European Union).

Although the specific provision is pale and ineffectual, EC (EU) labour law including working time can give rise to heated passions and protracted procedures.


Article 142 TEC

Article 142 (ex Article 119a) of the Treaty establishing the European Community (TEC) lays down a programmatic wish to maintain the existing equivalence between paid holiday schemes in the EU member states.

The current Article 142 TEC, as published in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/110:

Article 142 TEC

Member States shall endeavour to maintain the existing equivalence between paid holiday schemes.


Original Lisbon Treaty (ToL)

Article 2, point 119 of the original Treaty of Lisbon (ToL) amends Article 140 TEC and point 120 concerns Article 143 TEC, so there are no specific amendments to Article 142 TEC (OJ 17.12.2007 C 306/82).

No horizontal amendments apply. The contents of Article 142 remain unchanged.


Renumbering ToL

The Table of equivalences of the original Treaty of Lisbon tells us that the social policy title was to be renumbered Title X and that the Article 142 TFEU (ToL) was to be renumbered Article 158 TFEU in the consolidated versions of the amending treaties (OJ 17.12.2007 C 306/216).


Consolidated Lisbon Treaty

Following renumbering, the unchanged Article 158 of the Treaty on the Functioning of the European Union (TFEU), in the consolidated TFEU published in the Official Journal of the European Union, OJ 9.5.2008 C 115/118, appears as follows:


Article 158 TFEU
(ex Article 142 TEC)

Member States shall endeavour to maintain the existing equivalence between paid holiday schemes.


Charter of Fundamental Rights

The Charter of Fundamental Rights of the European Union has been politically binding on the EU institutions since it was proclaimed in Nice in December 2000.

The Charter was an integrated part of the Constitutional Treaty (as Part II), but it did not become legally binding because the ratification processes of the Constitution petered out after the negative referendums in France and the Netherlands.

The Treaty of Lisbon does not incorporate the text of the Charter, but the European Union ‘recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties’ (Article 6 TEU).

The Charter does not introduce new rights, but it brings together existing ones in an orderly manner. Thus, it clarifies existing rights and makes them more visible, although a bit less as a separate document than when it was an integral part of the Constitution.

Rights pertaining to work, social protection and health have been collected under the umbrella of Title IV Solidarity. Article 31.2 sets out some generally worded principles (OJ 14.12.2007 C 303/8):

Article 31
Fair and just working conditions

1. Every worker has the right to working conditions which respect his or her health, safety and dignity.

2. Every worker has the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave.


Charter explanations

The Charter of Fundamental Rights was originally drawn up by the first Convention. During the European Convention the praesidium issued updated explanations. They have been technically adjusted but not materially updated since then. The latest version concerning Article 31 was published in OJ 14.12.2007 C 303/24, and the explanations often serve as a useful first reference to the Charter text:

Explanation on Article 31 — Fair and just working conditions

1. Paragraph 1 of this Article is based on Directive 89/391/EEC on the introduction of measures to encourage improvements in the safety and health of workers at work. It also draws on Article 3 of the Social Charter and point 19 of the Community Charter on the rights of workers, and, as regards dignity at work, on Article 26 of the revised Social Charter. The expression ‘working conditions’ is to be understood in the sense of Article 156 of the Treaty on the Functioning of the European Union.

2. Paragraph 2 is based on Directive 93/104/EC concerning certain aspects of the organisation of working time, Article 2 of the European Social Charter and point 8 of the Community Charter on the rights of workers.


EC (EU) labour law

Article 142 TEC and Article 158 TFEU are vague enough concerning paid holiday schemes, and they contain no specific legal base for legislation.

On the other hand, Article 137 TEC and Article 153 TFEU provide for directives setting minimum requirements concerning various aspects of labour law.

The Commission’s DG Employment, Social Affairs and Equal Opportunities offers a number of web pages on Labour law and work organisation, starting from:

There are links to pages with News, Labour law directives (with working time under working conditions), Labour law documentation by topic (with information about the later stages of updating the Working Time Directive), Implementation reports on labour law directives, Publications on the (historical) evolution of labour law in the member states, the Commission’s Green Paper on labour law including the Commission’s 24 October 2007 Communication on the "Outcome of the Public Consultation on the Commission’s Green Paper “Modernising labour law to meet the challenges of the 21st century“ (COM/2007/0627), Workers posted temporarily to another EU country, Work organisation etc.


Working time

Holidays constitute one element affecting annual working time.

The consolidated Working Time Directive, more precisely Directive 2003/88/EC of the European Parliament and the Council of 4 November 2003 concerning certain aspects of working time includes a minimum provision on annual paid leave (OJ 18.11.2003 L 299/9):

Article 7
Annual leave

1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.

2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.


Reforming the Working Time Directive

Although outside the primary scope of this blog post, reforming elements of the Working Time Directive has been a contested and drawn-out issue.

Eurofound’s European industrial relations observatory (EIRO) offers an article Political agreement reached on working time and temporary work directives, by Stefan Lücking (last update 15 October 2008):

The Commission’s 10 June 2008 press release Commission strongly welcomed the political agreement on Working Time and Working conditions for Temporary Agency Workers. It can be read here:

Although the Council has agreed, the European Parliament has not rejoiced. The European Trade Union Confederation (ETUC) presents an opposing view to the member states’ agreement ahead of the following vote by the EP plenary session. At the same time it offers a background view and highlights controversial points:

Ralf Grahn