Judgment;Summary — ECLI:EU:C:2022:19
Date: 2022-01-13
Language of the case: German
Court formation: Seventh Chamber
Subject matter: Approximation of laws;Social Policy;Free movement of workers;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
13 October 2020 
Referring court: 
Bundesarbeitsgericht (Germany) 
Date of the decision to refer: 
17 June 2020 
Applicant, appellant and appellant on a point of law: 
DS 
Defendant, respondent and respondent in the appeal on a point of law: 
Koch Personaldienstleistungen GmbH 
  
Subject matter of the main proceedings 
Entitlement to overtime pay when taking minimum annual leave 
Subject matter and legal basis of the reference 
Interpretation of EU law, Article 267 TFEU 
Question referred for a preliminary ruling 
Do Article 31(2) of the Charter of Fundamental Rights of the European Union and 
Article 7 of Directive 2003/88/EC preclude a provision in a collective labour 
agreement which, for the purpose of calculating whether an employee is entitled 
to overtime pay and for how many hours, takes account only of the hours actually 
worked and not also of the hours during which the employee takes his paid 
minimum annual leave? 
EN 
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Provisions of EU law cited 
Charter of Fundamental Rights of the European Union (‘the Charter’), Article 31 
Directive 2003/88/EC of the European Parliament and of the Council of 
4 November 2003 concerning certain aspects of the organisation of working time 
(OJ 2003 L 299, p. 9) 
Provisions of national law cited 
Mindesturlaubsgesetz für Arbeitnehmer (Federal law on minimum leave for 
workers; ‘the Bundesurlaubsgesetz’ or ‘BUrlG’), Paragraphs 1, 3, and 13 
Manteltarifvertrag für die Zeitarbeit (Framework Collective Agreement for 
temporary employment; ‘MTV’) in the version of 17 September 2013, 
Paragraphs 3, 4, and 6a 
Summary of the facts and proceedings 
1 The applicant is a temporary worker and is employed by the defendant on a full-
time basis for a gross hourly wage of EUR 12.18. The defendant runs an 
employment agency. The employment contract between the parties is governed by 
the MTV. 
2 In accordance with Paragraph 3.1.1 of the MTV, the regular monthly working 
hours for a full-time employee are 151.67 hours. This equates to an average of 
35 hours per week. In order to calculate the regular working hours for a given 
month, the number of working days is multiplied by seven hours in accordance 
with Paragraph 3.1.2 of the MTV. For part-time employment, the regular working 
hours per month are calculated pro rata. 
3 Working hours in excess of the regular monthly working hours are regarded as 
‘overtime’ in accordance with Paragraph 4.1.1 of the MTV. A higher hourly wage 
rate is paid for overtime above a certain threshold in accordance with 
Paragraph 4.1.2 of the MTV. To calculate this threshold, the number of working 
days is multiplied by eight hours, which, according to the wording of this 
provision, depends on the hours ‘worked’. Furthermore, it emerges from 
Paragraph 4.1.2 of the MTV that the additional allowance for overtime is 25% and 
that these provisions apply ‘equally’ to part-time employees. 
4 In the month of August 2017, which included 23 working days (161 regular 
working hours), the applicant worked 121.75 hours and took minimum annual 
leave within the meaning of Article 31(2) of the Charter and Article 7(1) of 
Directive 2003/88. The defendant deducted ten annual leave days amounting to 
84.7 hours for August 2017; in doing so, it applied Paragraph 6a of the MTV, in 
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accordance with which the average working hours during the three months prior to 
taking leave are used for the purpose of calculating holiday pay. 
5 In accordance with Paragraph 4.1.2 of the MTV, overtime pay should have been 
paid for hours in August 2017 that exceeded the 184 hours worked. 
6 The applicant holds the view that the hours deducted for leave should have been 
included when calculating overtime pay. The calculation should therefore be 
based on a total of 206.45 hours worked for August 2017. This means that the 
threshold of 184 worked hours was exceeded, with the result that he is entitled to 
overtime pay. 
7 The applicant requests that the defendant be ordered to pay him EUR 72.32 gross 
plus interest on arrears. 
8 The defendant submits that, according to the wording of the MTV, only hours 
actually worked should be included when calculating overtime pay; on the other 
hand, leave should not be taken into account. It claims that the applicant is not 
entitled to overtime pay because he did not work more than 184 hours in August 
2017. 
9 The action was dismissed by the lower courts. The applicant continues to seek the 
same form of order for payment by way of the appeal on a point of law admitted 
by the referring court. 
Brief summary of the grounds for the reference 
Assessment of the case on the basis of national law 
10 In the course of interpreting Paragraph 4.1.2 of the MTV, the referring court 
reached the conclusion that the applicant has no entitlement to overtime pay for 
August 2017. 
11 This is initially evident from the wording of that provision. According to general 
language use, the term ‘worked hours’ is understood to mean hours in which work 
is actually carried out. 
12 The outcome is the same if a teleological interpretation is applied. The referring 
court assumes that the purpose of the overtime pay provided for in the MTV is to 
compensate for the particular work-related strain that arises once certain limits of 
working hours are exceeded. In principle, the purpose of such allowances could 
also be to protect generally the employee’s leisure time, but in the case of the 
MTV there is nothing to suggest that the parties to the collective labour agreement 
had this intention in mind. This is particularly evident from Paragraph 4.1.2. of the 
MTV, in accordance with which the rules relating to overtime pay apply ‘equally’ 
to part-time employees, with the result that these employees become entitled to 
overtime pay only once the same limits as for full-time employees are exceeded. 
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13 The question also arises as to whether the rules in the collective labour agreement 
on the calculation of overtime pay would form the basis of an improper financial 
incentive for employees not to take their leave. According to the case-law of the 
referring court, certain incentives to forego leave may contravene Paragraph 1 of 
the BUrlG, under which all employees are entitled to paid leave for purposes of 
rest. Collective labour agreements are not permitted to deviate from this provision 
(Paragraph 13(1)(1) of the BUrgG). If the applicant had not taken leave in August 
2017, but had actually worked the hours deducted for the leave period, he would 
have earned an entitlement under the MTV to overtime pay for 22.45 hours of 
EUR 68.36 gross (22.45 hours x EUR 12.18 gross x 25%). This negative effect of 
leave is built into the system of the MTV. If employees initially work overtime 
and then take leave in the same month, the overtime pay may be reduced or be 
completely cancelled out. 
14 However, the MTV contains certain features whereby financial disadvantages as a 
result of taking leave occur only in particular circumstances. On the one hand, in 
accordance with Paragraph 4.1.2. of the MTV, payment of overtime is not 
required until average working hours of 40 hours per week are exceeded. The 
regular weekly working hours are 35 hours, however. Therefore, overtime pay 
does not become payable until more than eight sevenths of the regular monthly 
working hours have been worked within the month. On the other hand, the 
number of hours for which overtime pay is payable is limited by the fact that, in 
accordance with Paragraph 3.2.1. of the MTV, hours in excess of the regular 
monthly working hours must be paid into a working time account. An upper limit 
of 150 additional hours applies in accordance with Paragraph 3.2.2 of the MTV, 
which is soon reached if an employee works overtime on a frequent basis. 
15 The overtime pay that is ‘at risk’ as a result of taking annual leave as a proportion 
of the total gross monthly salary is comparatively small in typical sets of 
circumstances. In the applicant’s case, it is about 2.7% for the month of August 
2017. 
Assessment of the case under EU law 
16 In the view of the referring court, the decision in the main proceedings depends on 
whether Article 31(2) of the Charter and Article 7 of Directive 2003/88/EC 
preclude a provision such as Paragraph 4.1.2. of the MTV. The Court of Justice 
has previously ruled that EU law can also conflict with rules in collective labour 
agreements (see, among others, the judgment of 23 April 2020, Land 
Niedersachsen (Previous periods of relevant activity), C-710/18, EU:C:2020:299, 
paragraph 22 et seq.). 
17 Whether a rule such as Paragraph 4.1.2. of the MTV creates incentives for 
foregoing leave that are incompatible with Article 31(2) of the Charter and 
Article 7 of Directive 2003/88/EC is not clear from the outset (acte clair), nor has 
it been clarified by the case-law of the Court of Justice in a manner that removes 
all reasonable doubt (acte éclairé). 
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18 The case-law of the Court of Justice does indicate, on the one hand, that a 
contravention of these EU-law provisions may have occurred. 
19 The Court of Justice has highlighted the special significance of the minimum 
period of annual leave in numerous decisions. In accordance with its case-law, 
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 and 
the implementation of which by the competent national authorities must be 
confined within the limits expressly laid down by […] Directive 2003/88 
(judgments of 12 June 2014, Bollacke, C-118/13, EU:C:2014:1755, paragraph 15, 
and of 20 January 2009, Schultz-Hoff and Others, C-350/06 and C-520/06, 
EU:C:2009:18, paragraph 22 and the case‑ law cited). This principle is expressly 
guaranteed in Article 31(2) of the Charter, which Article 6(1) TEU recognises as 
having the same legal value as the Treaties (judgments of 30 June 2016, 
Sobczyszyn, C-178/15, EU:C:2016:502, paragraph 20, and of 8 November 2012, 
Heimann and Toltschin, C-229/11 and C-230/11, EU:C:2012:693, paragraph 22). 
20 The dual purpose of the right to paid annual leave is to enable the worker to rest 
and to enjoy a period of relaxation and leisure (judgment of 20 July 2016, 
Maschek, C-341/15, EU:C:2016:576, paragraph 34 and the case‑ law cited). For 
this reason, a worker must not be faced with circumstances during his annual 
leave that are liable to give rise to uncertainty as to the remuneration owed to him 
(judgment of 29 November 2017, King, C-214/16, EU:C:2017:914, paragraph 37 
et seq.). 
21 Finally, the Court of Justice has ruled that Article 7 of Directive 2003/88 further 
defines the meaning of the rule in Article 31(2) of the Charter. Article 31(2) of the 
Charter expresses the fundamental right to paid annual leave affirmed by EU law 
(judgments of 6 November 2018, Bauer and Willmeroth, C-569/16 and C-570/16, 
EU:C:2018:871, paragraphs 38 and 85, and of 6 November 2018, Max-Planck-
Gesellschaft zur Förderung der Wissenschaften, C-684/16, EU:C:2018:874, 
paragraphs 31, 74 and 75). If a national rule cannot be interpreted in a manner 
consistent with Article 31(2) of the Charter and Article 7 of Directive 2003/88, the 
national court or tribunal must disapply that national rule. This obligation on the 
national court arises from Article 7 of Directive 2003/88 and Article 31(2) of the 
Charter if a party in the legal dispute is an employer with the status of a public 
authority. This obligation follows from Article 31(2) of the Charter if a party in 
the legal dispute is an employer who is a private individual (judgments of 
6 November 2018, Bauer and Willmeroth, C-569/16 and C-570/16, 
EU:C:2018:871, paragraph 64 et seq., and of 6 November 2018, Max-Planck-
Gesellschaft zur Förderung der Wissenschaften, C-684/16, EU:C:2018:874, 
paragraph 62 et seq.). 
22 In view of the special significance of the entitlement to paid annual leave, doubts 
arise as to whether disadvantages relating to the amount of overtime pay on the 
basis of the minimum leave taken are compatible with Article 31(2) of the Charter 
and Article 7 of Directive 2003/88. The Court of Justice has held that the creation 
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of incentives to forego minimum annual leave is not permitted. Employees must 
also not be encouraged to do so. This would be at variance with the objectives of 
the right to paid annual leave relating in particular to the need to ensure that 
workers enjoy a period of actual rest, with a view to ensuring effective protection 
of their health and safety (judgments of 6 November 2018, Max-Planck-
Gesellschaft zur Förderung der Wissenschaften, C-684/16, EU:C:2018:874, 
paragraph 42; of 6 November 2018, Kreuziger, C-619/16, EU:C:2018:872, 
paragraph 49; and of 6 April 2006, Federatie Nederlandse Vakbeweging, 
C-124/05, EU:C:2006:244, paragraph 32). 
23 In the Lock case (judgment of 22 May 2014, C-539/12, EU:C:2014:351), the 
Court of Justice ruled on a set of circumstances similar to those obtaining in the 
present case. In addition to his basic salary, the employee received commission for 
concluded purchase contracts, which was paid several weeks or months after each 
contract in question had been concluded. While on leave, he received his basic 
salary. Commission for contracts concluded in the past continued to be paid. 
However, the employee was unable to earn new commission from concluding 
contracts during his leave. For this reason, his pay was reduced in the period after 
taking that leave. 
24 The Court ruled that Article 7(1) of Directive 2003/88 precludes such a rule. The 
employee may be deterred from exercising his right to annual leave, given the 
financial disadvantage. This is all the more likely given that the commission 
represented, on average, over 60% of the remuneration. Such a reduction in a 
worker’s remuneration in respect of his paid annual leave is contrary to the 
objective pursued by Article 7(1) of Directive 2003/88. The fact that the reduction 
in remuneration occurs after the period of annual leave is irrelevant (judgment of 
22 May 2014, Lock, C-539/12, EU:C:2014:351, paragraph 21 et seq.). 
25 In the Lock case, the disadvantages in respect of remuneration entitlements 
occurred more regularly and to a greater extent than in the case on which the 
referring court now has to rule. However, a contravention of EU law cannot be 
discounted merely due to the fact that the potential financial disadvantages are 
smaller. 
26 On the other hand, there is case-law of the Court of Justice which suggests that the 
negative incentive effect of Paragraph 4.1.2 of the MTV is not sufficient to 
constitute a breach of Article 31(2) of the Charter and Article 7 of Directive 
2003/88. Such indications can be found in the Court’s rulings on normal 
remuneration that must continue to be paid to workers while they are taking leave 
(judgments of 13 December 2018, Hein, C-385/17, EU:C:2018:1018, 
paragraph 32 et seq.; of 22 May 2014, Lock, C-539/12, EU:C:2014:351, 
paragraph 16 et seq.; and of 15 September 2011, Williams and Others, C-155/10, 
EU:C:2011:588, paragraph 19 et seq.). 
27 Remuneration in respect of annual leave must, in principle, be determined in such 
a way as to correspond to the normal remuneration received by the worker. Where 
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the remuneration received by the worker is composed of several components, the 
determination of that normal remuneration and the amount to which that worker is 
entitled during his annual leave requires a specific analysis (judgment of 
15 September 2011, Williams and Others, C-155/10, EU:C:2011:588, 
paragraphs 21 and 22). 
28 In the Hein case, the Court concerned itself with the question of whether the 
overtime worked by the employee had to be taken into account when calculating 
remuneration for annual leave. The Court noted that, given its exceptional and 
unforeseeable nature, remuneration received for overtime does not, in principle, 
form part of the normal remuneration that the worker may claim in respect of the 
paid annual leave provided for in Article 7(1) of Directive 2003/88. However, 
when the obligations arising from the employment contract require the worker to 
work overtime on a broadly regular and predictable basis, and the corresponding 
pay constitutes a significant element of the total remuneration that the worker 
receives for his professional activity, the pay received for that overtime work 
should be included in the normal remuneration (judgment of 13 December 2018, 
Hein, C-385/17, EU:C:2018:1018, paragraphs 46 and 47). 
29 Whether or not it is strictly required that broadly regular and predictable overtime, 
for which remuneration constitutes a significant element of the total remuneration, 
should be included in normal remuneration, has not yet been fully clarified. The 
wording, to the effect that remuneration for this overtime ‘should’ be included in 
the calculation of remuneration in respect of annual leave (judgment of 
13 December 2018, Hein, C-385/17, EU:C:2018:1018, paragraph 47), argues 
against a mandatory requirement to include overtime. However, the comparison 
between remuneration for unforeseeable overtime of an exceptional nature, and 
broadly regular and predictable overtime, the remuneration for which constitutes a 
significant element of overall remuneration, supports such a requirement. 
30 There is much evidence in the present case to suggest that it concerns overtime of 
an exceptional and unforeseeable nature. There are no indications in the collective 
labour agreement nor in the details of the main proceedings to suggest that the 
overtime is broadly regular and predictable and that the remuneration for these 
hours constitutes a significant element of the total remuneration. If remuneration 
for such overtime is not strictly required to form part of the calculation of 
remuneration for annual leave, it seems likely that a comparable financial 
disadvantage in the calculation of overtime pay as a result of having taken annual 
leave does not infringe Article 31(2) of the Charter and Article 7 of Directive 
2003/88. 
31 The referring court takes the view that the Court of Justice must rule as to whether 
the criteria that apply to normal remuneration that must continue to be paid during 
the minimum period of leave can be applied to the calculation of overtime pay. 
The financial disadvantage of lower remuneration due to having taken annual 
leave exists independently of whether it results in lower remuneration for annual 
leave during the leave period or whether the disadvantage affects remuneration for 
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overtime in periods prior to or after the leave period. The financial incentive to 
forego annual leave is comparable in both cases.