Holidays During Sickness
European Court of Justice 20 January 2009, JAR
2009/58
European Directive and the Dutch Civil Code
Article 7 (1) of the Directive stipulates that employees are
entitled to a minimum of four weeks of paid annual leave. The
number of statutory holidays in the Netherlands has been determined
in accordance with the Directive. A fulltime employee is therefore
entitled to a paid annual leave of at least four weeks. Article 7
(2) of the Directive further stipulates that the minimum period of
annual leave may not be replaced by an allowance in lieu, except
where the employment relationship is terminated. This provision has
also been implemented into Dutch legislation and stipulates that
during the term of the employment agreement an employee cannot
waive his entitlement to annual leave and convert it into
compensation. If at the end of the employment agreement an employee
is still entitled to holidays, he will receive a financial
compensation for them.
The Facts in the Judgment
The first case concerned a German employee who had been on
long-term sick leave before his dismissal. Pursuant to German law,
his entitlement to paid annual leave had lapsed and he was not
entitled to a financial compensation for the annual leave not
taken. The second case concerned a number of British employees
whose yearly annual leave had been extinguished according to
British law, because they had been prevented from taking it on
time. Both cases were first dealt with in their own countries,
after which the British and the German Court submitted preliminary
questions on the interpretation of Article 7 of the Directive to
the European Court of Justice ("ECJ"). The ECJ heard
these cases in a joined action.
The ECJ
The ECJ rendered an opinion on three questions
relating to the relation between holidays and sickness. Firstly,
the ECJ considered that Member States may determine themselves
whether or not an employee on sick leave is entitled to take his
annual leave during sickness. Secondly, the ECJ determined that the
annual leave after the leave year and/or carry-over period (a
period which is meant to still give the employee the opportunity to
take leave after the leave year) may not be extinguished if the
employee has been on sick leave for the whole or part of the leave
year, and where his incapacity for work persisted until the end of
his employment relationship and the employee could not exercise his
right to annual leave. The ECJ considered in this respect that the
entitlement to annual leave is awarded to all employees, whatever
their state of health. To conclude, the ECJ determined that at the
end of the employment the employer must pay the employee
compensation for the holidays if the employee was prevented from
taking his holidays due to sickness.
Consequences for the Netherlands?
The judgment of the ECJ on the interpretation of the Directive has
caused quite a stir. Pursuant to Dutch law, an employee who is
fully unfit for work only accrues holidays over the last six months
of incapacity for work. Employees who are partially unfit for work
may only claim holidays over the hours worked and not over the
hours during which the stipulated work could not be carried out due
to sickness. The consideration of the ECJ that employees are
entitled to the minimum number of annual leave, whatever their
state of health, is therefore contrary to Dutch law. It is not
known yet whether Dutch law will be adjusted in this respect. The
Ministry of Social Affairs and Employment is currently examining
the consequences for the Netherlands. Meanwhile, while relying on
this right, an employee could demand to accrue full annual leave,
even during incapacity for work.