Charlotte Davies

+44 (0)1223 785267 cdavies@greenwoodsgrm.co.uk

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ECJ finds that worker who does not request holiday does not automatically lose acquired rights to paid holiday

Employment / 12 November 2018

The ECJ has held that a worker who does not request to take paid annual holiday during employment does not automatically lose the right to a payment in lieu of untaken holiday on termination of employment.

ISSUE

The ECJ heard two German cases, both of which looked at whether it was correct that workers should lose untaken holiday from previous holiday years, and payment in lieu of that holiday on termination, where the worker did not ask to take the holiday before the employment ended.

Whilst the case related to the payment of holiday on termination of employment, the decision has wider implications for workers during employment.

KEY DATES

The decision in Kreuziger v Land Berlin and Max-Planck-Gesellschaft zur Förderung der Wissenschaften eV v Shimizu was handed down on 6 November 2018.

IMPACT

The effect of the case is that:

  1. Employers should ensure that workers are actually in a position to take their paid annual leave (by taking the steps in a) to c) below); and
  2. Workers are now likely to be able to carry over holiday from one holiday year to the next, regardless of what the employment  contract says, unless: 
    a) the employer has formally encouraged the worker to take paid annual holiday;
    b) the employer has confirmed that if it is not taken, the holiday will be lost at the end of the relevant carry-over period; and
    c) steps a) and b) have happened “accurately and in good time”.

ACTION

This is yet another difficult holiday pay decision for employers to deal with.  At the very least, employers should, in good time at various points throughout the holiday year, encourage their workers to take their holiday and warn workers that if they do not take it, it will be lost.

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