The case concerns a retired worker who filed a lawsuit against his former employer to obtain compensation for paid leave not taken during his employment, which amounted to 79 days. The employer replied that, under current legislation, the annual leave of public sector workers, does not entitle them to receive any financial compensation if not taken.

The Court of Lecce asked the Court of Justice of the European Union for a preliminary ruling on whether this domestic legislation is contrary to the EU Working Time Directive. The Advocate General of the European Court of Justice stated that Article 7 of the Working Time Directive precludes workers from the monetisation of unused paid annual leave at the end of the employment relationship, where:

• the prohibition to require allowance in lieu of annual leave does not cover the right to annual leave acquired in the reference year in which the termination of work happens;
• the worker had the opportunity to take paid annual leave in the previous reference years, including during the minimal carry-over period;
• the employer has encouraged the worker to take paid annual leave;
• the employer has informed the worker that unused paid annual leave cannot be cumulated to be replaced by an allowance in lieu at the termination of the employment relationship.

Moreover, Article 7(2) of Directive 2003/88 requires that the employer demonstrate that it enabled and encouraged the worker to take the leave and informed him or her that the monetisation would not be possible at the moment of the employment relationship's termination. Nevertheless, the worker chose not to take the annual leave.

The court stated that, if the employer fails to do so, compensation should be paid to the worker. It is therefore essential for employers to remind their employees of the importance of taking paid annual leave and to encourage rational planning of such leave.