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B e f o r e :
Case No: EATRF 1999/0346/A1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 21st June, 2000
LORD JUSTICE PILL
LORD JUSTICE BROOKE
LORD JUSTICE MUMMERY
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EAST RIDING OF YORKSHIRE COUNCIL
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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
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Mr John Bowers QC & Mr Jeremy Lewis (instructed by Head of Legal
Services, East Riding of Yorkshire Council for the Appellant)
Mr Jeremy McMullen QC & Miss Jennifer Eady (instructed by Adam
Creme, Director of Legal Services, Unison for the Respondent)
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As Approved by the Court
Crown Copyright ©
Lord Justice Mummery:
The only question on this appeal is whether the Employment Tribunal sitting at
Hull erred in law when it held, on dismissing the complaint by Mrs Lorraine
Gibson against the East Riding of Yorkshire Council (the Council), that Article
7 of the Working Time Directive (93/104/EC) (the Directive) relating to minimum
annual leave does not have direct effect. The Employment Appeal Tribunal took a
different view when it allowed Mrs Gibson's appeal on 29 January 1999 and held
that she was entitled to four weeks paid leave under her contract.
Despite this difference of judicial opinion neither side has contended on this
appeal by the Council that it is necessary to seek a ruling from the European
Court of Justice on the interpretation of Article 7 of the Directive in order
to determine Mrs Gibson's complaint.
Mrs Gibson is employed as a part time swimming instructor at Haltemprice
Leisure Centre, Anlaby, Hull. She works 11.5 hours a week under that contract.
She works under a separate contract for 14 hours a week during term time as a
school swimming instructor. She is paid an hourly rate. Neither contract
entitles her to annual leave. Clause 12 of the school instructor contract
expressly states "There is no annual leave entitlement attached to this post."
She has never been paid any holiday pay.
From 31 July 1986 until 1 April 1996 her employer was the Beverley Borough
Council. As a result of local government re-organisation with effect from 1
April 1996 the Council became and remains her employer.
On 14 July 1997 Mrs Gibson presented a complaint to the tribunal that the
Council had failed to supply her with a proper statement of the terms and
conditions of her employment under section 11 of the Employment Rights Act
1996. She also sought redress for unauthorised deductions from her wages under
section 13 of the 1996 Act on the basis that she had not received payments for
The only remaining issue on the section 11 claim is entitlement to annual
leave. Its resolution depends solely on whether Article 7 is directly
effective against the Council. The claim cannot be based on contract. Neither
contract provides for annual leave. There was no legislation in force in the
United Kingdom at the material time entitling Mrs Gibson or other workers to
annual leave or holidays. There was no evidence before the Employment Tribunal
of national practice or custom, nor any finding of fact by that tribunal as to
the conditions for entitlement to and the granting of annual leave or
The Working Time Regulations 1998 (SI 1998 No 1833) (the Regulations), which
are the implementing measures relating to the organisation of working time in
the United Kingdom, now prescribe the conditions under which entitlement to
paid annual leave arises. The Regulations were made on 30 July 1998. They came
into force on 1 October 1998. Mrs Gibson contends that Article 7 of the
Directive, which should have been implemented by member states by 23 November
1996, can be relied on by her in the Employment Tribunal as directly effective
against the Council in respect of the period 23 November 1996 to 1 October
It is agreed that the Council is an emanation of the state; that Mrs Gibson
is a "worker" within the meaning of the Directive; and that, if Article 7 has
direct effect, it would follow that (a) the Council would not be entitled to
plead, as against Mrs Gibson, the failure of the state to perform its own
obligation to adopt implementing measures within the prescribed period and (b)
the Article would be enforceable in proceedings against the Council by Mrs
Gibson in the Employment Tribunal.
Article 7 provides that
" (1) Member States shall take the measures necessary to ensure that every
worker is entitled to paid annual leave of at least four weeks in accordance
with the conditions for entitlement to, and granting of, such leave laid down
by national legislation and/or practice.
(2) The minimum period of paid annual leave may not be replaced by allowance in
lieu, except where the employment relationship is terminated."
The contention that that provision has direct effect was rejected by the
Employment Tribunal in its extended reasons sent to the parties on 23 July
1998. But it was accepted by the Employment Appeal Tribunal which allowed Mrs
Gibson's appeal on 29 January 1999. It held that she was entitled to four weeks
annual paid leave. The judgment of the Appeal Tribunal given by Morison J is
reported at  ICR 622.
The Legal Principles
There is no dispute about the relevant principles for determining whether an
article in a directive is directly effective in the courts and tribunals of
member states. Morison J set them out in a valuable exposition on pages
627C-628 G. It is unnecessary to repeat the entire passage, as the arguments on
this appeal have focused only on the following principles:-
(1) A provision of a directive may have direct effect in member states if it
is unconditional and sufficiently precise. This is a matter of interpretation
of the relevant provision in the context of the whole directive, having regard,
in particular, to its purpose. It is necessary to examine the nature, general
scheme and wording of the provision in question .
(2) A provision of a directive is sufficiently precise, even if it would
require the Court of Justice to answer a difficult question on its
(3) In the employment field a provision in a directive is sufficiently precise
if it identifies (a) the beneficiaries of the right; (b) the persons under a
duty to give effect to the right; and (c) the nature and extent, or content,
of the right.
(4) The fact that the directive permits precise derogations from its terms by
member states does not of itself render the directive conditional. A provision
is unconditional if there is no need for further action by Community
institutions or by member states in order to define its content.
(5) The fact that some articles of a directive may lack sufficient precision
and be incapable of having direct effect does not prevent others which are
sufficiently precise from having direct effect standing on their own.
Application of the Principles.
The difficulties in the application of the legal principles to this case were
recognised by the Appeal Tribunal which, on reversing the decision of the
Employment Tribunal, stated at page 628G that
" There is much to be said in favour of the conclusion reached by the
The Appeal Tribunal stated no less than five arguments against the direct
effect of the Directive ( p.628 G-629C)-
"In the first place, Directive 93/104 permits national governments to give
effect to its terms through the collective bargaining process, as an
alternative to the normal legislative process. Second, extensive derogations
are permitted under article 17, and an undefined discretion to provide
"appropriate protection" in lieu, in cases to which article 17 (2) applies.
Third, derogations are permitted "by means of collective agreements." Fourth,
the English text of the Directive suggests that article 2 (1) which defines
working time was not drafted with the precision to be expected of a Directive
which is capable of conferring rights on certain categories of workers. The
lack of clarity has prompted a reference from a Spanish tribunal to the Court
of Justice seeking the court's guidance as to the proper interpretation of that
definition. Fifth, articles 10,16,18 (3) and (4) permit ("may") member states
"to make the work of certain categories of night workers subject to certain
guarantees," to lay down reference periods, to lay down rules to be applied in
the collective bargaining process, and give them an option to extend the
reference periods. This shows, it may be argued, that the Directive cannot be
seeking to harmonise the laws of member states by introducing minimum
Nevertheless the Appeal Tribunal concluded that "on balance,....article 7 has
direct effect so that during the period from 23 November 1996 to 1 October 1998
an employee of an emanation of the state may take advantage of its protection"
(p.629C) and that
" the structure of the Directive is consistent with it having direct effect. It
is designed to require member states to confer minimum rights upon workers in a
way which can be said to be unconditional"
The essence of the reasoning of the Appeal Tribunal is in the following
passage at page 630 A-C in which the EAT responded to specific objections to
direct effect in these circumstances:-
" Article 7 is clear and precise and, in our view, admits of no ambiguity or
conditionality. In the lay members' experience, custom and practice in the
workplace will invariably fill the gap if there were doubts as to the start and
end of a "leave year." It may well be that the employers have a defined leave
year, which would be appropriately applicable to the applicant. No derogations
are permitted from the article. It applies to all workers, both private and
public, other than those engaged in the sectors stipulated in article 1(3). It
gives effect to paragraph 8 of the Community Charter of the Fundamental Social
Rights of Workers adopted by the European Council on 10 December 1989. It also
gives effect to the purpose of the Directive which insists ("must") that
Community workers be granted minimum annual periods of rest."
I disagree with the conclusion of the Appeal Tribunal. In my judgment the
provisions of Article 7 are not sufficiently precise to have direct effect. The
Employment Tribunal rightly rejected Mrs Gibson's claim. I would allow the
(1) The Wider Context.
I agree that, although this case is only concerned with the interpretation of
Article 7, it is necessary to examine it in the wider context of the nature,
general scheme and wording of the Directive.
The Directive concerns "certain aspects of the organisation of working
The preambles to the Directive refer to Article 118a of the Treaty according
to which "the Council shall adopt, by means of directives, minimum requirements
for encouraging improvements, especially in the working environment, to ensure
a better level of protection of the safety and health of workers" and quote the
Community Charter of the Fundamental Social Rights of Workers (9 December 1989)
in which it was declared that
"8. Every worker in the European Community shall have a right to...annual paid
leave, the duration of which must be progressively harmonised in accordance
with national practices."
The preambles recognise the need to provide for " flexibility in the
application of certain provisions of this Directive whilst ensuring compliance
with the principles of protecting the safety and health of workers " and the
need " to provide that certain provisions may be subject to derogations
implemented, according to the case, by the member states or the two sides of
The purpose of the Directive is to lay down
"....minimum safety and health requirements for the organisation of working
That is stated in Article 1 of Section I of the Directive on "Scope and
Definitions" which applies to minimum periods of annual leave as well as to
minimum periods of daily and weekly rest, to breaks, to maximium weekly working
time and to certain aspects of night work, shift work and patterns of work.
Article 2 contains the following definition of "working time."
"....any period during which the worker is working, at the employer's disposal
and carrying out his activity or duties, in accordance with national laws
I regard that definition, imprecisely framed and coupled with an express
reference to " working....in accordance with national laws and/or practice", as
specially important in the context of Section II of the Directive which
contains Article 7 "Annual Leave." Section II deals with "Minimum Rest
Periods-Other aspects of the Organisation of Working Time."
Article 17 permits derogations by Member States from various Articles, but
not from Article 7.
In the "Final Provisions "in Article 18 it is stated in 1 (a) that
"Member States shall adopt the laws, regulations and administrative provisions
necessary to comply with this Directive by 23 November 1996, or shall ensure by
that date that the two sides of industry establish the necessary measures by
agreement, with Member States being obliged to take any necessary steps to
enable them to guarantee at all times that the provisons laid down by this
Directive are fulfilled."
Article 18 1. (b) (ii) also provides for an option relevant to the length of
the period of annual leave claimed by Mrs Gibson-
"....Member States shall have the option, as regards the application of Article
7, of making use of a transitional period of not more than three years from the
date referred to in (a), provided that during that transitional period:
-every worker receives three weeks' paid annual leave in accordance with the
conditions for the entitlement to, and granting of, such leave laid down by
national legislation and/or practice,... "
(2) Insufficiently Precise.
I agree with the submission of Mr Bowers QC, who appeared on behalf of the
Council, that Article 7 does not have direct effect so as to be enforceable by
individual workers in national courts against state employers because it leaves
unanswered key questions affecting individual entitlement to annual leave.
In a sense Article 7 is precise: the length of the minimum period of paid
annual leave is a precise period of four weeks. But it does not follow from the
precision of the length of the period of leave that the obligation in the
article is sufficiently precise for a national court to enforce it at the
instance of an individual without more.
The first basic question for the national court is: what is the period of
"working time" for which the worker must have worked before he becomes entitled
to annual leave under Article 7? Annual leave is leave from "working time" .
The concept of "working time " is not precisely defined. To what period of
"working time" does the specified period of annual leave relate? This question
is not answered by Article 7 itself or by any other provisions in the
Directive. How then is it possible for a national court to decide which
workers are entitled to annual leave?
The Employment Appeal Tribunal was certainly alive to this substantial
difficulty. It sought to meet it and to "fill the gaps" by reference to the
views and experience of the lay members on the custom and practice in the
workplace in this country as to the start and end of a "leave year."
Mr McMullen QC, on behalf of Mrs Gibson, sought to meet the objection that
Article 7 is not sufficiently precise by invoking definitions in Articles 3a
and 3b of the Framework Directive on Health and Safety (89/391/EEC) of 12 June
1989, which preceded the Directive, and by relying on a purposive construction
of the Directive. He contended that the Directive clearly created an
unequivocal and precise obligation as to the result to be achieved.It is a
"condition-free right." It applies to every worker against all employers in
all sectors, both public and private, who organise the working time of their
workers. The content of the right is clear and precise: 4 weeks paid annual
leave. The absence of legislation or national practice as to annual leave in
the United Kingdom could not be relied on by the Council to take away or cut
down the clear and unconditional right to annual leave conferred by the
Directive. Article 7 is not conditional either as to the worker who is entitled
to annual leave or as to the employer who is liable. The problem of the
entitlement of new starters to annual leave is resolved by construction of
"week" and "annual", so that a week's leave does not become due until 12 weeks
have been worked. In that way a week's leave accrues every 13 weeks of working
time. Further, no derogations from Article 7 are allowed by the Directive.
The realistic recognition of the Appeal Tribunal that there are gaps to be
filled is significant on the issue of the direct effect of Article 7. The very
existence of gaps in Article 7, even as viewed in the "wider context" set out
above, is a strong indication that the terms of the Article are
insufficiently precise to have direct effect in the courts and tribunals of
member states. The right which Mrs Gibson wishes to assert against the Council
is quite simply not sufficiently defined in Article 7 to be directly
enforceable by an individual in national courts and tribunals. Further
definition is necessary in implementing measures either by the Community or by
the member state. Without further definition of the conditions for entitlement
to the right how could the tribunal even begin to determine a claim under
Article 7 by a worker, who had worked only for a week or for a month, that he
was entitled to four weeks annual leave? Mr McMullen's submissions on
interpretation appear to be an impermissible process of judicial legislation.
The judicial interpretation of Article 7 and of the other provisions of the
Directive does not yield the answer to basic questions of entitlement.
If Article 7 itself is lacking in sufficient precision and if it is not
possible to provide sufficient precision by reference to other provisions in
the Directive, it is not permissible to interpret the Article as having direct
effect by reference to national practice or custom in the workplace as
perceived by individual members of the Appeal Tribunal. What has to be
construed is the relevant article in the Directive and not the provisions of
the national law or practice in individual member states. Other measures, such
as national legislation of the detailed kind now to be found in the
Regulations, or in collective agreements, are required to enact and define
the essential conditions of entitlement to the rights to be conferred.
(3) The Option in the Transitional Period
If , contrary to my view, Article 7 has direct effect, I would agree with the
Appeal Tribunal that Mrs Gibson is entitled to four weeks' annual paid leave as
provided for in Article 7. The Council is not entitled to rely on the option in
Article 18 1. (b) (ii) for three weeks' paid annual leave. The option was
available only for a transitional period of three years from 23 November 1996
and it was not in fact exercised by the United Kingdom. The Council is not
entitled to invoke the benefit of an unexercised option which the state could
have exercised if it had taken the measures necessary to implement the
Directive , but which is no longer available to the member state.
I would therefore allow the Council's appeal and dismiss Mrs Gibson's
Lord Justice Brooke : I agree.
Lord Justice Pill :
I agree. There is no doubt that Article 7 of Council Directive 93/104/EC
imposes an obligation on member states to ensure that every worker is entitled
to paid annual leave of at least four weeks. That obligation is unqualified.
The existence of the obligation does not, however, answer the question whether
the statement of that obligation in Article 7 creates a right enforceable by an
individual in a national court. That depends in this case on whether it creates
a right "whose contents can be determined sufficiently precisely on the basis
of the provisions of the directive alone" (Francovich v Italian Republic (Cases
C-6 and 9/90  ICR 722).
In my judgment it does not. Mummery LJ has referred to key questions which are
unanswered in the Article. Those include the absence of a precise definition of
"working time", upon which entitlement to leave depends, the absence of
criteria to assess entitlement during the first year, or a part year, of
employment, or where there is more than one employer or part time work or work
on a commission basis. The subject matter, that is paid leave entitlement,
requires precision and detail to define its content and the substance of the
It is submitted that a national court may fill the gaps in the absence of such
detail. The court should give effect to what Mr McMullen describes as a "pure
right" in Article 7. In my judgment that is neither the intention nor the
effect of Article 7. It requires national measures to be adopted but it
contemplates that the existence of the right to enforce depends on national
measures being in place. The nature of the Article is also confirmed by the
wording of the second part of Article 7(1); action is to be taken by member
states to lay down the conditions for entitlement.
I agree that the appeal should be allowed. I also agree with Mummery LJ's
conclusion under his heading 'The option in the transistional period'.
Order: Appeal allowed; order of Employment Tribunal reinstated;
appellant to have the costs of the appeal, to be the subject of a detailed
assessment, but interim payment to be made by the respondent of £8,
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