Update on worker rights to apply for the minimum annual leave

Louise Walker
Louise Walker
Legal Director
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The European Court of Justice (ECJ) was recently faced with the following question – if a worker does not apply for the minimum annual leave due to them under The Working Time Directive 2003 (i.e. the first four weeks of leave due each year under EU Law) during a holiday year, do they lose their right to be paid for those days?

The question arose as a result of a recent German case involving a worker who sought payment from his employer for untaken annual leave. The worker had argued that, under German law, he was entitled to be paid for those holidays as his employment had been terminated, and he would not be able to take his remaining holidays in the current calendar year, nor the following calendar year.

The employer had argued that because the worker had had the opportunity to take holidays during the leave year before his employment terminated, his right to those holidays lapsed at the end of that year.

The ECJ, whose decisions have effect across Europe, including the UK, held that a worker will not lose their right to claim untaken holidays, unless the employer can show they took steps to enable the worker actually to take the paid annual leave to which he is entitled. It falls to the employer to be able to demonstrate the steps that they have taken in this respect in the event that legal proceedings are raised.

In order to show that steps have been taken to enable such leave to be taken (the ECJ referred to “due diligence being exercised” by the employer), the case held that the employer must, in good time, accurately inform staff that they have outstanding holidays for that leave year. It was noted that employers cannot compel a worker to take leave, but that they can encourage them to do so, formally if need be, by informing them, accurately and in good time so as to ensure that such annual leave is still capable of being taken, and if not, that it will be lost at the end of the reference period or authorised carry-over period.

The German law under which this case was decided is rather different from the UK law implementing the European Directive governing holiday entitlement, but we can see from this case that before a UK employer can tell an employee they have lost their unused holiday entitlement at the end of the holiday year, the employer may well have to warn the employee in advance that they have unused entitlement available to take, and do so far enough in advance that the employee has a realistic chance to use it.

If you have any questions regarding this update, or you require advice or assistance on any other employment law matters, please do not hesitate to contact a member of our team on 0141 331 5150.

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