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Carrying forward holiday – Is your policy clear?

December 12, 2018
Employment Law

For many businesses, we are coming to the end of not only the calendar year, but also the holiday year. With this in mind, the decision in the recent case of Max-Planck-Gesellschaft v Shimizu is particularly interesting.

The facts
Put simply, when his employment ended in 2013, Mr Shimizu sought to argue that he ought to be paid in lieu of untaken holiday which had accrued during the course of 2011 and 2012. The question before the courts was whether Mr Shimizu could argue that the unused entitlements from these previous holiday years could be carried forward into the holiday year in which his employment actually terminated. Only then would he be entitled to a payment in lieu.

The decision
After referring to the provisions of the Working Time Directive, the European Court of Justice recently concluded that a worker’s accrued holiday entitlement should not automatically be lost at the end of each holiday year. Instead, it is for the employer to show that it has ‘diligently‘ made its staff aware, in good time, that it adopts a ‘use it or lose it’ policy. The burden of proof is on the employer to show that they have complied with this requirement.

A call to action!
If you are approaching the end of your holiday year and do not normally allow your staff to carry forward their untaken leave, you may need to act now. If you have not already done so, you should consider reminding your employees of your policy regarding the carrying forward of holiday. You should also prompt them to use up any remaining holiday entitlement before the end of the current year.

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