BUL-2010-3-003
a)  Bulgaria / b)  Constitutional Court / c) / d)  11-11-2010 / e)  12/10 / f) / g)  Darzhaven vestnik (Official Gazette), 91, 19.11.2010 / h) .
 
Keywords of the systematic thesaurus:
 
 
Sources - Categories - Written rules - International instruments - Universal Declaration of Human Rights of 1948.
Sources - Categories - Written rules - International instruments - European Social Charter of 1961.
Sources - Categories - Written rules - International instruments - International Covenant on Economic, Social and Cultural Rights of 1966.
Sources - Categories - Written rules - International instruments - Charter of Fundamental Rights of the European Union of 2000.
General Principles - Social State.
General Principles - Rule of law.
Fundamental Rights - Equality - Criteria of distinction - Differentiation ratione temporis.
Fundamental Rights - Civil and political rights - Non-retrospective effect of law - Social law.
 
Keywords of the alphabetical index:
 
Employment / Paid leave, right, limitation / Retrospective effect.
 
Headnotes:
 
The law amending and supplementing the Labour Code cannot have retrospective effect, especially where a fundamental constitutional right, such as the right to paid leave, is at stake. When a right is created under the authority of the legal system and when the retrospective effects of a later law give rise to legal consequences that are unfavourable for the owners of that right, the fundamental principles of the rule of law enshrined in the Constitution are infringed.
 
The limitation of the right to paid leave is not unconstitutional, as long as it only produces effects in the future.
 
Summary:
 
I. The Court received two independent applications from the President of the Republic and 51 members of Parliament, seeking to establish the unconstitutionality of paragraph 3.e of the transitional provisions of the Labour Code (hereinafter, "TPLC"), paragraph 8.a of the transitional and final provisions of the law on state officials (hereinafter, "TFPLSO"), Articles 176.3 and 224.1 of the Labour Code (hereinafter, "LC") and Articles 59.5 and 61.2 of the law on state officials (hereinafter, "LSO") and the non-conformity of some of these norms with treaties to which Bulgaria is party (the Universal Declaration of Human Rights (hereinafter, "UDHR"), the International Covenant on Economic, Social and Cultural Rights (hereinafter, "ICESCR"), Convention no. 52/1936 of the International Labour Organisation (hereinafter, "ILO"), the European Social Charter (revised) (hereinafter, "ESC"), the EU Charter of Fundamental Rights and Directive 203/88/EC of the European Parliament and the Council).
 
II. Given the nature of the two cases the Court joined them for examination at the same time.
 
Paragraph 3.e of the TPLC provides that all paid annual leave granted in respect of the previous calendar years and not taken at 1 January 2010 may be taken up to 31 December 2011.
 
As of 1 January 1993, the three-year time limit for the taking of paid annual leave was abolished. Employees were able to use untaken paid annual leave until termination of the employment relationship. Certain mechanisms ensured that such leave was taken in due course. The accumulation of untaken leave is due to the law not being strictly applied.
 
Paragraph 3.e of the TPLC governs the use of untaken leave prior to the entry into force of that law.
 
It relates to rights already acquired because the entitlement to paid annual leave was created under another set of legal rules. It opens the way for a new legal assessment of the effects produced by a right introduced by a previous law. In this case, there is an infringement of the fundamental principle of the non-retrospective effect of the law, according to which a law may not have the retrospective effect of revoking rights. The time limit set for employees to use their untaken paid annual leave accrued from previous years is not sufficient.
 
Paragraph 3.e of the TPLC introduces a limitation of a right that is contrary to Article 57.1 of the Constitution, which stipulates that fundamental rights are inalienable. It also infringes the constitutional provisions of Article 16, under which the right to work is guaranteed and protected by the law, of Article 48.1, enshrining the right to work, and of Article 48.5, governing the right to leave. Consequently, the owners of that right are restricted in its exercise.
 
When a fundamental civil right cannot produce the legal effects provided for in the legislation in force at the time of its creation and the retrospective effect of a later law produces unfavourable consequences for the holders of that right, there is a violation of the principles of legal security and predictability, which are essential components of the rule of law. Paragraph 3.e of the TPLC is therefore contrary to Article 4 of the Constitution.
 
It infringes the principles of the welfare state, by introducing a restriction of a social right, which is prohibited by indent 5 of the Preamble to the Constitution.
 
Paragraph 8.a of the TFPLSO governs the conditions in which state officials may take their paid annual leave accrued during previous calendar years. It is identical in content to paragraph 3.e of the TPLC. The arguments of unconstitutionality of paragraph 8 are therefore the same and, on that basis, it is contrary to Articles 48.5; 16; 48.1; 57.1; 4 and indent 5 of the Preamble to the Constitution.
 
Article 176.3 of the LC stipulates that the right to paid annual leave lapses upon expiry of a time limit of two years following the year for which the leave was granted. Where leave is postponed, this time limit commences as from the end of the year during which the grounds preventing the employee from taking it disappear.
 
As a general legal mechanism, the stipulation appeared in the LC up until 1 January 1993.
 
Extinctive limitation provides for a period of inactivity on the part of the owner of a right. Article 176.3 of the LC therefore provides for the extinction of the exercise of the right to leave and not of the right itself.
 
Stipulating an extinctive limitation period is a question of state legal policy. The limitation provided for in Article 176.3 of the LC has no retrospective effect and its role is to encourage the exercise of that right. As a result, it does not contravene the Constitution and the Court dismissed the application.
 
Article 59.5 of the LSO is identical to Article 176.3 of the LC in terms of content and governs the extinction of the exercise of the right to paid annual leave of state officials. The Court dismissed the application of the members of parliament seeking to establish the unconstitutionality of this provision on the basis of the same arguments and conclusions as those set out above.
 
Under Article 224.1 of the LC, upon legal termination of the employment relationship, the worker or official is entitled to a payment to compensate for untaken paid leave granted for the current calendar year which is proportional to the years taken into account for the calculation of length of service and leave not taken owing to the employer's actions or because of maternity, to which entitlement is not extinguished by limitation.
 
Analysis of Article 224.1 of the LC shows that the limitation of the right to a compensation payment relates only to the current calendar year and leave postponed in accordance with Article 176 of the LC. There may be many reasons for not taking paid annual leave. The law states that, in such cases, the right to leave must be exercised before 31 December of the respective year. Article 224.1 of the LC contradicts Article 176.3 of the LC, which provides for a period of limitation of two years. This contradiction between the two provisions is crucial and sufficient justification to rule that Article 224.1 is unconstitutional because it infringes the principles of the rule of law. It is also contrary to Article 48.5 read in conjunction with Articles 16 and  48.1 of the Constitution. The Constitutional Court ruled that the passage in Article 224.1 of the LC reading "…granted for the current calendar year which is proportional to the years taken into account for the calculation of length of service and untaken leave, postponed in accordance with Article 176..." was unconstitutional.
 
Article 61.2 of the LSO is similar to Article 224.1 of the LC and is therefore open to the same arguments of unconstitutionality.
 
The international treaties that have entered into force in respect of Bulgaria are part of domestic law and have primacy over domestic legislative provisions which run counter to them (Article 5.4 of the Constitution).
 
International legal instruments define the general framework governing the right to leave. Under Article 24 of the UDHR everyone has the right to periodic leave with pay. Paragraph 3.e of the TPLC and paragraph 8.a of the TFPLSO deprive workers and officials of the possibility of exercising their right to paid annual leave, which conflicts with Article 24 of the UDHR.
 
They also run counter to the requirements of Article 2.1 of the UDHR which stipulates that everyone is entitled to all the rights and freedoms set forth in the Declaration, without distinction of any kind.
 
Paragraph 3.e of the TPLC and paragraph 8.e of the TFPLSO do not comply with Articles 7.d and  2.2ofthe ICESCR, which recognises, respectively, the right to periodic paid leave and the obligation of States to guarantee that those rights are exercised without discrimination.
 
Nor do they comply with Article 2 of ILO Convention no. 52 on holidays with pay.
 
Article 224.1 of the LC and Article 61.2 of the LSO do not comply with Article 6 of ILO Convention no. 52 with respect to the payment of compensation for paid annual leave not taken upon termination of the employment relationship, whereas the right to such compensation may not be exercised in all cases where the entitlement to leave is not extinguished by limitation. Bulgarian labour legislation provides for the payment of compensation for untaken paid leave in all cases where the employment relationship is terminated and not only for termination for a reason imputable to the employer as stipulated by Article 6 of the Convention.
 
Under Article 2.3 of the ESC (revised) the contracting Parties undertake to provide for a minimum of four weeks' annual holiday with pay. Articles F.1 and G.1 of the ESC provide that derogations from that requirement are possible in time of war or public emergency. Paragraph 3.e of the DTFCT and paragraph 8.a of the TFPLSO prevent the effective exercise of the right to leave, in the absence of grounds justifying such a restriction of this right and therefore clash with the above-mentioned provisions of the ESC.
 
Paragraph 3.e of the DTFCT and paragraph 8.a of the TFPLSO contravene Article 31.2 read in conjunction with Article 52.1 of the EU Charter, providing that all workers have a right to an annual period of paid leave. Any restriction of fundamental rights set forth in the Charter must take account of the principal content of those rights. The relevant argument in this case is that the workers and officials are deprived of a right to leave that they had already acquired. The challenged provisions are therefore contrary to Article 7 of Directive 2003/88/EC of the European Parliament and Council concerning certain aspects of the organisation of working time, which obliges all Member States to take the measures necessary to ensure that every worker is entitled to minimum paid annual leave which may not be replaced by an allowance in lieu, except where the employment relationship is terminated.
 
Languages:
 
Bulgarian.