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9 Aug 2023 Expiry and prescription of leave days: employer's duty of care and information

The Netherlands is currently in the middle of the summer holiday period, but there are also employees who rarely or never take holidays. As a result, there is often a huge amount of leave days accrued that does not shrink much, if at all. Employer and employee should realise these in principle do not simply lapse or become time-barred. Employer has a duty of care and information towards employee.

Legal framework
By law, an employee is entitled to at least four weeks' holiday a year. This amounts to 20 statutory leave days for full-time employment. These statutory holidays expire six months after the year in which they were accrued, unless the employee was unable to take holidays. In that case, a five-year limitation period applies under the law.

The Max Planck ruling: duty of care and information on the part of the employer
The European Court of Justice ruled in 2018 in the Max Planck judgment (in a German case) that the right to holidays cannot simply be lost. This can only be the case if the employer has ensured that the employee actually had the opportunity to take his annual leave. This requires that the employer has informed the employee "in a precise and timely manner" about his holiday entitlements and warned the employee of the moment when the employee will lose these entitlements.

Supreme Court: no limitation period as long as employer does not fulfil its obligations
The Supreme Court recently ruled in a Dutch case in which this was an issue. The employee, who was working as a lawyer, had accumulated a reservoir of holidays over 15 years. Specifically, it involved 186.5 accrued but unused holiday days, including days above the law. The issue was whether statutory holiday days were time-barred after a five-year period.

In this case, the employer had not complied with the duty of care and information mentioned above. According to the Supreme Court, the court had therefore rightly disapplied the five-year limitation period. European law opposes a national regulation in which the right to holiday lapses after five years if the employer did not actually enable the employee to exercise his holiday entitlement.

Because the five-year limitation period was not applied, the employee was entitled to a gross amount of €62,604.32 as compensation for accrued but unused holiday days after the termination of his employment. This amount was further increased by a 10% penalty (the 'statutory increase') and statutory interest.

You can read the judgment here

Holidays are not lost without action by the employer
For holidays to lapse or become time-barred, action by the employer is required. Employers must clearly and timely inform their employees of both the six-month expiry date and the five-year limitation period. As long as the employee has not actually been given the opportunity to take his holidays, the holidays (even after five years) cannot be lost.

Finally, it is important to note that in the event of a dispute, it is up to the employer to prove that it exercised all due diligence to actually enable the employee to take holidays. It is therefore important for employers to keep proper records. These should properly record both the outstanding holiday balance and the warnings sent to the employee.

Questions about expiry or limitation of holidays? Contact the employment lawyers at SPEE advocaten & mediation.

SPEE advocaten & mediation Maastricht


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