News - Netherlands

Netherlands - March 2010

Netherlands: Holiday entitlement during sickness - Netherlands legislation breaches European law

Background

In 2009, the European Court of Justice (ECJ) handed down a judgment regarding the accrual of annual leave during periods of illness. The ECJ ruled that sick employees were entitled to at least four weeks’ holiday (20 days) per year.

Legislation in the Netherlands, however, prescribes that a sick employee may only accumulate holidays in the last six months of any sickness period.  As such, if an employee has an annual holiday entitlement of 20 days and he has been sick for two years, under the current law in the Netherlands, he will only have accrued 10 days of holiday. However, in line with the judgment of the ECJ, he would, in fact, be entitled to 40 days of holiday.

Following the ECJ decision, it was not known how this decision would be applied by the courts in the Netherlands. The answer came on October 10, 2009.

On 10 October 2009, the courts clarified the position in a case which concerned an employee who was entitled to 28 holidays a year.  The employee had 5 days of leave outstanding to her from 2005, and up to 1 May 2006, she had accumulated a further 9 days of holiday.  From 1 May 2006, the employee fell ill and was on sick leave for two years thereafter.

The employer considered that the employee was entitled to 14 days over the period until 1 May 2006, being the 5 days from 2005 and the 9 days accrued to that date in 2006.  The employer did not believe that the employee had any holiday entitlement in the period from 1 May 2006 through to 1 November 2007.  In the period from 1 November 2007 through to 1 May 2008, the employee had then accrued a further 14 days leave, half of her annual allowance.  As a result, the employer asserted that the employee was entitled to a total of 28 days of holiday.

The employee thought differently. In her view, up until 1 May 2006, she had accumulated 14 days of leave. From 1 May 2006 through to 1 May 2008, she had accumulated the statutory minimum amount of 20 days a year, which over the two year period totalled 40 days.  Over the last six months of her illness period, she had also accumulated further days over and above the statutory entitlement.  Each year, the employee had an additional 8 days of holiday over and above the statutory entitlement, so on this basis she had accrued a further 4 days during the last six months of her illness. In total, therefore, the employee had accrued 58 days of leave (being 14 + 40 + 4).

The Cantonal Court found in favour of the employee.

Although the arguments of the employer were supported by law as it currently was in the Netherlands, the Court considered that the employer had acted contrary to the principle of being a good employer by attempting to rely on domestic legislation which was clearly in conflict with European law.

Commentary

As the legislation in the Netherlands on this point is in conflict with European law, the Cantonal Court has clearly given effect to European law.  Whether or not this reasoning is, in fact, correct, employers are advised to take this decision into account when calculating holiday entitlement for ill employees.   It is highly likely that sick employees may seek to claim the statutory minimum number of holidays as provided for by European law.

For further information, or to discuss any of the issues raised, please contact Klaas Wiersma (klaas.wiersma@loyensloeff.com) on +31 20 578 57 80 or or Peter Bos (peter.bos@loyensloeff.com) on +31 20 578 57 85.

This article was produced by, and re-produced with kind permission of, our correspondent firm in The Netherlands, Loyens & Loeff N.V. www.loyensloeff.com

Loyens Leoff