We all love holidays. I am personally about to go on a particularly long one. I would be extremely annoyed if my employer said no – you’re not allowed to go, but not only that, come 1 January when my new holiday year starts, your entitlement is lost.
It is a good job therefore that the European Court of Justice steps in to make sure holiday rights are upheld.
In 2 recent cases in the German courts, which I will simply refer to as Kreuziger and Shimizu, the German employers refused to allow employees to receive a payment in lieu of untaken annual leave when they had not taken it all during their employment. In both cases, neither employee had actually requested paid annual leave – they had simply sat tight and waited for their employment to end, following which they asserted a right to a payment in lieu of untaken leave. Mr Shimizu in particular asked for 51 untaken days’ leave dating back 2 holiday years. The question was, if the individuals were entitled and had time to take their leave, should they still be allowed a payment in lieu when their employment ends? This was referred to the ECJ.
The ECJ decided that a worker does not automatically lose accrued but untaken holiday entitlement at the end of the holiday year just because they failed to seek to take that entitlement. Good news therefore for those who would rather work and receive payment in lieu.
However, if the employer provides ‘sufficient information’ to the worker to encourage them to take holiday before the end of the reference period it might then be lawful to refuse to make a payment in lieu.
We are not aware of any cases in the UK where it has been argued a worker should lose the right to payment in lieu because they did not try to take their leave before termination, but in theory the situation could arise. Thank goodness I have booked all my holiday for the rest of the year.
Daniel Kindell – Partner