5.3.3 The Working Time Directive and Dutch law

244. The judgment in Dominguez did not as such have a significant influence on Dutch law. Nonetheless, like the French legislature, the Dutch legislature has struggled with the implementation of the Working Time Directive, especially with regard to the right to paid leave in relation to periods of absence owing to sick leave. Dutch labour law was in conflict with this very Directive until 2012, when a new law entered into force.1 Until that time, employers kept relying on the wrongful implementation measures. This led to a couple of cases that, in view of the preceding sections, are worthy discussing.

In 2009, the Gerechtshof Amsterdam held that Dutch law could not be interpreted in harmony with the Working Time Directive.2 In short, the facts of the case are as follows. Due to illness, an employee is absent from work from April 2004 onwards. He enters a reintegration course, but as from January 2007 his employment contract is terminated by dissolution. The employee claims, amongst others, the compensation of forty days of paid leave. However, the employer relies on (old) Article 7:635(4) BW on the basis of which the days of paid leave are calculated only over the last six months of an employee’s illness instead of over the entire period. Therefore, the employer claims that the employee has a right to compensation of only ten days of paid leave. The employee argued that the Dutch provision regulating the right to paid leave for employees who had been (temporarily) absent due to illness was in conflict with the Working Time Directive and finds support in the Court of Justice’s ruling in Schultz-Hoff.3 Applying this ruling to Dutch law, the employee would have the right to have – compensation for – forty days of paid leave, instead of the ten days of paid leave that he would have under (old) Article 7:635(4) BW.

Ever since the Schultz-Hoff judgment of the Court of Justice, Dutch courts ought to be aware of the fact that this provision was unequivocally in conflict with the Directive. So was the Gerechtshof Amsterdam. However, neither the phrasing of the provision, nor the parliamentary history to the provision4 left any room for consistent interpretation. The limits of the duty of consistent interpretation were encountered and the Gerechtshof could not bring solace to the employee who tried to effectuate his right to compensation of forty days of paid leave, because in this case interpretation would result in interpretation contra legem which, according to the Gerechtshof,is not accepted in Dutch law.5 As a result, the Gerechtshof ordered the employer to compensate ten days of paid leave only, which was in accordance with the (wrongful) Dutch implementation measure. The Gerechtshof noted that it is for the Dutch legislature to take action at this point.6

245. In my view, the statement of the Gerechtshof that contra legem interpretation is not possible in Dutch law requires nuance.7 After all, by employing the restrictive effect of reasonableness and fairness, adopted in Article 6:2(2) BW and Article 6:248(2) BW, a national court can disapply contractual clauses and legislative provisions – even those of a mandatory nature8 – when the application of the particular clause or legislative provision would be unacceptable (onaanvaardbaar) in view of all the concrete circumstances of the case.9 National courts are expected to adopt a very reluctant approach towards the restrictive effect of reasonableness and fairness10 – and even more reluctant in relation to the potential disapplication of a rule of mandatory law.11

Hence, if the outcome of the application of the provision that was found to be incompatible with the Directive would have been unacceptable in view of the circumstances of the case, the Gerechtshof could have set aside the particular provision and interpreted national law contra legem and in conformity with the Directive, insofar as this would not be in conflict with general principles of Union law12. In this specific case the question should be answered whether the application of a legislative provision on the basis of which an employee wrongfully misses thirty days of paid leave – or compensation thereof – is unacceptable. According to Article 6:248(2) BWall the relevant circumstances of the case have to be taken into account. If, in view of those circumstances, the application of the legislative provision would be unacceptable that provision must be disapplied, which would amount to the technique of contra legem interpretation which then thus is accepted under Dutch law. It should be borne in mind that in the case at hand the question whether the national provision should be disapplied is governed by national law and that cases in which a national court interprets national law contra legem differ from cases like Mangold, Kücükdeveci and Dansk Industri from which it has become clear that Union law obliges national courts to disapply national provisions incompatible with Article 21 Charter. At the time when the Dutch case at hand and the case between Dominguez and CICOA took place, it was not yet clear that the Working Time Directive and Article 31(2) Charter could be invoked by a private party to claim the disapplication of an incompatible national provision in horizontal proceedings.13 That Article 31(2) Charter has that effect only became clear in Bauer and Broûonn.14 Besides this interpretation of Article 31(2) Charter, the moment of the entering into effect of the Charter is also relevant. Although the Court has repeatedly stressed that Article 31(2) Charter is a “particularly important principle of EU social law”, it has never held that it also is a general principle of Union law. This implies that, unlike the principle prohibiting age discrimination15, the right to paid leave or allowance in lieu can be invoked as such only in legal situations that took place after 1 December 2009 and not in ones occurring before that date.16 That means that pursuant to Union law a national court in a case like the one in question is not obliged to disapply the provision, but that on the basis of Article 6:248(2) BW it may still arrive at the conclusion that in the concrete circumstances of the case the application of the problematic provision would be unacceptable and that it therefore should be set aside, so that the right to paid leave can be effectuated. Also, as the case falls within the scope of Union law, the national court has to respect the principles of effectiveness and equivalence.

246. In that respect, it would be relevant to inquire whether the employer applied the wrongful legislation in good faith. The potential lack of good faith on the side of the employer may play a considerable role in the assessment of the case. Even though a directive cannot as such impose obligations upon a private party, when a private party knows that a national provision is incompatible with a directive and nevertheless relies upon this provision to the detriment of another private party, this may lead to the conclusion that the application of this provision is unacceptable and that it therefore should be disapplied on the basis of the restrictive effect of reasonableness and fairness. Or, even more incongruous, imagine that shortly before a correct implementation measure enters into force, an employer consciously makes an effort to cash in on a wrongful implementation measure – for example by suddenly hiring (many) new employees or renewing the employment contracts of current employees at an early stage to ascertain that the old law applies to their employment contracts rather than the new implementation measure.17 In such an event it could be argued that the new, correct implementation act should be anticipated and that such opportunistic behaviour of the employer – namely entering into employment agreements with the aim of circumventing new rules – cannot be accepted. The application of a clause relying on a wrongful Dutch implementation measure in an employment agreement that came about exactly with the purpose to dodge a revised implementation measure soon coming into force may in such an exceptional case be unacceptable (onaanvaardbaar) according to the standards of reasonableness and fairness.18