Dutch law on holiday entitlement changed as of 1 January 2012. Sanne van Ruitenbeek of Pallas Attorneys-at-law explains.

The European Court of Justice has judged that sick employees should accrue the same number of holidays as employees who are fit for work. This judgment brought to light that that Dutch legislation on vacation entitlement is in violation of EU rules. For this reason the law will change as of 1 January 2012.

 Currently Dutch law states that an employee who is unfit for work for more than six months will only accrue holidays over the last six months of sickness. As of 1 January 2012, the new law stipulates that sick employees will not be treated differently from ‘healthy' employees, which means holidays will be accrued during the whole period of sickness.

To prevent an employee accruing a significant backlog of holidays - which could be a risk for the employer - the new law has also introduced an expiration date of six months. An employee should therefore take all their holidays within six months after the year the holidays were accrued. Should the employee not take the holidays on time, the holidays will lapse without any compensation or payment.

There is, however, one exception to this new rule; if the employee is not able to take holidays, for instance, due to sickness or workload. In this case the holidays will not lapse until after a period of five years. This five-year time-limit is also applicable to all holidays accrued before 1 January 2012 and to all holidays which the employee is entitled to on top on the legal minimum number of holidays.

The legal minimum number of holidays per year is four times the working time per week. This means 20 holidays in the case of a fulltime employee working a five-days a week. However, it is common practice in the Netherlands for a fulltime employee to be entitled to approximately 25 holiday days per year, in addition to Dutch public holidays.

In brief, here are the changes to Dutch vacation law:

• The law will not distinguish between employees who are fit or unfit for work. Both groups will accrue the same number of holidays.
• Employees should be able to take holidays during sickness in order to get a break from reintegration activities.
• If an employee does not take their minimum number of holidays within six months after the year they accrued the holidays, the holidays will lapse, unless the employee has not been able to take the holiday for reasons such as sickness or workload.
• Holidays accrued before 1 January 2012 and holidays on top of the legal minimum number of holidays will lapse after five years. (20 is the legal minimum number of holidays for a fulltime employee).

• Holidays which have the shortest expiration date will be deemed to be taken first by the employee.

Even though sick employees will have more rights because of this new law, it will be a challenge for both employer and employee to accomplish a holiday administration in keeping with the regulations!

Sanne van Ruitenbeek, Pallas Attorneys-at-law.