13 November 2024
Vacation days do not remain valid indefinitely, but they also do not simply expire. This article provides an overview of the relevant rules regarding vacation days under Dutch employment law. The overview is based on the most recent jurisprudence from the Dutch Supreme Court and the European Court of Justice.
First, we need to distinguish between statutory and non-statutory vacation days, as well as between expiration and forfeiture. Statutory vacation days expire under Article 7:640a of the Dutch Civil Code six months after the year they were accrued, unless the employee was reasonably unable to take them. Non-statutory vacation days expire under Article 7:642 of the Dutch Civil Code five years after the year they were accrued. It seems straightforward, right?
However, the situation is more complicated than it appears. According to the Max Planck ruling by the European Court of Justice on November 6, 2018, the expiration period for statutory vacation days only applies if the employer has fulfilled their duty of care and information obligations. This means that the employer must explicitly and timely inform the employee about the expiration of vacation days, allowing the employee to enjoy their vacation before it expires. If the employer cannot prove that they have met this obligation, the vacation days cannot simply expire.
In the ruling of the Dutch Supreme Court on June 23, 2023 (ECLI:NL:HR:2023:955), the question arose whether the aforementioned obligations of the employer apply only to the expiration period of statutory vacation days or whether they also apply to the expiration period of non-statutory vacation days. In other words, if vacation days do not automatically expire after six months, do they at least expire after five years?
No, the Supreme Court ruled: “there can be no reasonable doubt that the same applies to the five-year expiration period.” The ‘Max Planck obligations’ also apply to the five-year expiration period. This means that the employer must also inform the employee about the potential expiration of vacation days and do so in a timely manner, allowing the employee to take these days off.
Vacation days cannot simply expire or forfeit. Inform your employees in writing about the validity of their days. If your employee has a backlog of vacation days, engage in a conversation with them about taking those days and — very importantly —document this conversation properly. Only then can the vacation days eventually expire (or forfeit).
For statutory vacation days, this could be as soon as six months after the year of accrual, provided the above obligations have been fulfilled. For non-statutory vacation days, the period is longer: five years. However, as an employer, you can agree with your employee to pay out non-statutory vacation days. This is permissible under Article 7:634 of the Dutch Civil Code, but not for statutory vacation days.
If one of your employees has a backlog of vacation days and you want advice on how to reduce this, or if you are an employee and your employer has allowed part of your vacation balance to expire without consultation, please contact one of the labor law attorneys at GMW.
