An employer has various duties of care and disclosure obligations. One of them is: allowing employees to take paid holidays. An employer must notify employees in good time that any statutory holidays they have not taken will lapse. So when do statutory holidays lapse? Statutory holidays not taken in 2021 will lapse on 1 July 2022. Now is therefore a good time for the employer to inform employees about this. This can easily be communicated via an intranet message or e-mail. Why is this so important?
Preventing claims for payment of holidays
An employer must comply with its duty of care and disclosure obligations in good time. After that employees cannot claim compensation at a later date. This compensation has the same value as the holidays not taken. Sometimes, an employer does not warn the employee for several years about the lapse of holidays. As a result, the employer may have to pay tens of thousands of euros for outstanding holidays years later. In particular, courts in The Hague ruled in favour of employees in 2021 and 2022.
Lapse of statutory holidays
When do statutory holidays lapse? The general legal rule is that employees must have taken their statutory holidays within six months. This must then take place after the end of the calendar year in which they have accrued. In the case of full-time employment, this is 20 days. Otherwise, the law states that these holidays will lapse and employees will lose them. This general rule seems simple. European case law has stipulated that this automatic lapse of holidays only applies in certain cases. For example, if the employer has informed employees in good time of the possible lapse. This must happen well before 1 July because the employee must be given the opportunity to take those statutory holidays. Therefore, failure to comply with this disclosure obligation does not mean that statutory holidays lapse.
Statutory holiday limitations period
What about statutory holidays that have not lapsed? Another rule of law regarding holidays is that unused holidays lapse after five years; this means that employees lose their accrued holidays after five years in any case. This general rule also seems simple. However, courts have also recently ruled that the employer cannot always rely on prescription after five years. This happens when an employer has not complied with the said obligation to provide information on lapse. According to these judges, Dutch legislation is in conflict with European law in regard to the entitlement to holidays. In those cases, there is no lapse and no prescription of statutory holiday days. In other words, employees are also entitled to statutory holidays that were accrued more than five years ago and have still not been taken.
Final settlement of holidays amounting to tens of thousands of euros
This seems theoretical, but it is not. In proceedings against a law firm, the Court of Appeal of The Hague ruled on 16 November 2021 that, due to a breach of its disclosure obligation, the firm as an employer had to pay for statutory holidays of employees that had not been taken in the years 2012 to 2019. It ruled that there was no lapse or limitations period on the holidays.
On 30 March 2022, the Subdistrict Court of The Hague even upheld a claim for payment of statutory holidays accrued more than ten years ago. That claim had not lapsed and neither was it subject to the limitations period. This was because the employer had not given the employee in question the opportunity to take paid holidays. The employer has also not clearly informed the employee of the possible lapse of the holidays. The last case involved a gross amount to be paid by the employer of €42,000.
Tip: Inform employees about taking their statutory holidays
We therefore advise employers to remind all employees this month that their statutory holiday entitlements for 2021 will lapse on 1 July 2022. They must also be given the opportunity to take these days.
Do you have any questions? Please do not hesitate to contact us.