Accrual of Holidays During Sickness
A continuation of our newsletter of June 2009 (see
here)
Judgment of the European Court of Justice ("the
ECJ")
In January 2009 the European Court of Justice determined that
Dutch legislation concerning the accrual of holidays during
sickness is contrary to the current European Directive ("the
Directive"). Pursuant to current Dutch law (Section 7:635
subsection 4 of the Dutch Civil Code ("BW")) an employee
who is fully unfit for work only accrues holidays over the last six
months of incapacity for work. The ECJ, however, ruled that
pursuant to the Directive a sick employee accrues holidays
throughout the whole period of sickness. It is important that this
applies only to the statutory holidays and not to the non-statutory
holidays. Meanwhile, at least two employees have invoked an
interpretation in conformity with the Directive of Section 7:635
subsection 4 of the BW before a Dutch court. In its judgment of 10
November 2009 the Court of Appeal of Amsterdam reached a different
conclusion than the Subdistrict Court of Utrecht in its judgment of
14 October 2009.
Subdistrict Court of Utrecht, 14 October 2009, LJN:
BK0017
In this case, after two years of sickness an employee invoked the
accrual of holidays over the first eighteen months of her
incapacity for work and not only over the last six months, and
claimed payment of these holidays.
This employee invoked the Directive and the above-mentioned
judgment of the ECJ and argued that Dutch legislation should be
interpreted in conformity with the Directive. The employer took the
position that the employee could not directly invoke the Directive
and that there could be no question either of an interpretation in
conformity with the Directive, because this would lead to an
interpretation 'contra legem' (an interpretation
contrary to the law).
The Subdistrict Court ruled that an interpretation of Dutch
legislation with respect to holidays in conformity with the
Directive does not lead to an interpretation contra legem
and therefore concluded that during the two-year period of sickness
the employee fully maintained her entitlement to the statutory
minimum of holidays. Therefore, the employer must still pay out
these holidays. In the opinion of the Subdistrict Court, with
reference to the judgment of the ECJ, the value of the holidays in
the event of payment at the end of the employment must be
calculated on the basis of 100% of the then current regular salary.
Therefore, also if an employer has continued to pay only 70% of the
salary during sickness, the value of the holidays accrued during
this period of sickness must nevertheless be calculated on the
basis of 100% of the salary.
Court of Appeal of Amsterdam, 10 November 2009, LJN:
BK4648
It is remarkable that the Court of Appeal of Amsterdam ("the
Court of Appeal") came to a different conclusion in a similar
case. Also in this case an employee invoked the Directive and the
judgment of the ECJ. The Court of Appeal considered that a correct
implementation of the Directive would indeed mean that a sick
employee accrues holidays throughout the period of sickness and not
only during the last six months, but that it is up to the Dutch
legislator to bring Dutch law in conformity with the Directive. The
Court of Appeal did actually consider that the Dutch court is
subject to a heavy obligation to perform to the best of its ability
to interpret Dutch legislation as much as possible in conformity
with the Directive, but ruled, unlike the Subdistrict Court of
Utrecht, that an interpretation of Dutch holidays legislation in
conformity with the Directive leads to an interpretation that is
contra legem. The Court of Appeal therefore rejected the
employee's claim.
Tips
- In view of the conflicting judgment of the Court of Appeal
of Amsterdam, it does not seem likely that the judgment of the
Subdistrict Court of Utrecht has set a precedent. It therefore
seems like it that employees still cannot invoke the Directive
with respect to their employer. However, both courts have
confirmed that Dutch legislation is in conflict with the
Directive. Employers may do wise to already take this into
account. After all, in the long run this may lead to large
mountains of holidays for sick employees and to claims for
payment of these holidays at the end of the employment, as far
as these days have not lapsed yet.
- The value of these holidays is calculated on the basis of
100% of the salary.