In the Court’s interpretation, the right to an allowance in lieu of untaken leave, at the end of the
employment relationship, is intrinsically linked to the right to paid annual leave
In its ruling no. 21781/2022, published last 8 July, the Court of Cassation, Labour Section, ruled (along with several other issues on public employment) on a topic widely debated in legal practice and theory, namely the limits on the worker’s right to receive an allowance in lieu of untaken leave upon employment termination.
The worker’s right to take paid annual leave is under Art. 36, paragraph 3) of our Constitution, which states that leave “cannot be waived.” The right to holidays is further defined in the Italian Civil Code, Art. 2109 and in Legislative Decree no. 66 of 8/4/2003, which confirm the impossibility to waive the right to paid leave and its unexchangeability with a monetary compensation in lieu, except upon employment termination.
For a better understanding of the ruling, which concerns an employment relationship with a public administration, it is necessary to mention Art. 5, paragraph 8, of Decree Law no. 95 of 6 July 2012, converted with amendments into Law no. 135 of 7 August 2012, according to which holidays, rest days and leaves of absence due to public administration personnel included in its consolidated statement of income are compulsorily taken and do not give rise to the payment of compensation in lieu, even in employment termination cases.
A case submitted to the Supreme Court involved the Abruzzo Region and an employee who, at first instance, obtained from the Court of Labour of L’Aquila the granting of her request to ascertain the subordinate nature of her employment relationship with the Region under a series of continuative and coordinated service contracts between 2002 and 2010, and the payment of differences in salary.
The Court of Appeal of L’Aquila, reforming the ruling under appeal, deducted from the differences in remuneration paid by the Court of First Instance, the amount calculated as compensation in lieu of holidays and leave not taken by the employee.
In justifying its decision, the local court, referred to Court of Cassation case law (Court of Cassation ruling no. 10701/2015; Court of Cassation ruling no. 8791/2015 and Court of Cassation, ruling no. 4855/2014) and stated that there is a twofold burden of proof incumbent on a worker who takes legal action to request payment of compensation in lieu of untaken leave. This must prove that: (i) the work performance was carried out on the days set aside for leave; (ii) failure to take leave was due to exceptional and justified service requirements or force majeure.
The decision of the Court of Appeal of L’Aquila, as stated in the ruling, appears to be in line with established case law, under which a worker who takes legal action to request payment of the compensation in lieu of untaken leave has the burden of proving that they worked on the days set aside for such leave. This is because the performance of additional work to the normal annual work constitutes grounds for the above compensation. In contrast, the burden of proving the payment rests with the employer (Civil Court of Cassation, labour section, 26 May 2020, no. 9791; Civil cassation, labour section, 6 April 2020, no. 7696).
Continue reading the full version published in Norme & Tributi Plus Diritto of Il Sole 24 Ore.
