If a citizen suffers a loss because an EU member state fails to implement EU law correctly, the member state may incur liability under certain circumstances. In this case, the question before the Danish Supreme Court was whether the Danish Ministry of Employment was to pay compensation to a Danish citizen because an amendment of the Danish Holiday Act that was required for compliance with the Working Time Directive following a judgment from the EU Court had not been implemented already in the summer of 2010.
The case concerned an employee who fell sick while on summer holiday in 2010. His sickness lasted 11 days, and on returning to work he demanded 11 days of paid replacement holiday. His employer refused, citing the provisions of the then Holiday Act, according to which the employees themselves bore the risk of falling sick during their holiday.
However, the EU Court had ruled in Pereda (C-277/08) in September 2009 that under the Working Time Directive employees are entitled to replacement holiday if they fall sick during any holiday they are entitled to take under the Directive. The employee therefore issued proceedings against the Ministry of Employment, claiming that the Ministry should have brought the Danish Holiday Act into line with the Working Time Directive already in the summer of 2010.
Relatively simple amendment
Before the Supreme Court, the employee argued that he would have been entitled to replacement holiday if the Ministry had brought the state of the law into line with EU law immediately after Pereda and that the Ministry should therefore compensate him for the value of the holiday he would have been entitled to take had the amendment been implemented at that point in time.
The Supreme Court noted that in order for an EU member state to incur liability for violating Community law, the violation must be sufficiently qualified and in this test it will be taken into account whether the member state in question has manifestly and grossly exceeded the boundaries of its discretionary powers.
The Supreme Court noted that the EU Court's judgment caused such doubt as to the compatibility of the Danish holiday regime with EU law as to require the Danish authorities to clarify the need for a statutory amendment as quickly as possible. However, the Supreme Court believed it had been a valid decision to carry out the studies and analysis that had been carried out in light of Pereda by the working party of the Parliamentary Implementation Committee for the purpose of obtaining an adequate basis on which to make this decision. The Committee issued its report in September 2010, and as the report suggested that only a limited and relatively simple amendment of the Danish Holiday Act was needed, the Supreme Court held that the amendment should have been implemented already with effect from 1 January 2011.
A hearing on the draft Bill to amend the Holiday Act was not launched until January 2012, and the amendment did not take effect until April 2012. On that basis, the Supreme Court held that the Danish authorities had incurred liability by not having aligned the Holiday Act with EU law with effect from 1 January 2011 so as to entitle employees to replacement holiday for any periods of sickness suffered during their holiday with effect from this date. As the employee's sickness had occurred already in the summer of 2010, however, the employee in question was not entitled to compensation.