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Employment Law: Holiday pay

Do workers lose the right to a payment in lieu of holiday at the end of their employment if they did not try to take it? No, said the Court of Justice of the European Union in Kreuziger v Berlin.

The employee worked for a German public sector employer. His employment ended but the employer would not pay him in lieu for untaken holiday. The employee brought a claim. The German court agreed with the employer. It relied on national rules saying payment in lieu was only necessary if the employee had been prevented from taking the holiday by matters beyond his control. The appeal court doubted this were true and referred the matter to the CJEU.

The CJEU said that national laws can only provide for the loss of holiday entitlement if the employer can show that it enabled the worker to take the leave. The employer must provide information to the employee, who is given an effective opportunity to take the holiday. The case was joined with another case for an employee employed in the private sector. The CJEU confirmed that a private sector employee can rely on his individual rights to paid holiday under the European Charter of Fundamental Rights directly against his employer. If national laws clashed with the Charter, national courts must disapply any offending national provision to give effect to European law.

This case suggests that, contrary to previous assumptions, entitlement does not automatically lapse at the end of a holiday year unless the employer has actively enabled the employee to take it. Employers should consider whether they do enough to encourage their employees to take holiday.