Our thoughts on the world of employment law - and beyond.

Right to holiday pay survives death of employee

The ECJ has held that if a worker has accrued (untaken) statutory annual leave at the time of their death, a payment in lieu of that holiday must be made to their estate.

In the latest in a line of cases on holiday pay (definitely the hot topic of the moment), the ECJ looked at the (splendidly named) German case of Bollacke v K+K Klaas & Kock B V and Co.   Mr Bollacke had been ill for some time before his death at the end of 2010.  At the time of his death, he had accrued in excess of 140 days’ untaken leave.  His employer refused to make a payment in lieu, and Mr Bollacke’s wife brought a claim before the German courts.  This was turned down, but on appeal the matter was referred to the ECJ to consider the requirements of the Working Time Directive (WTD).

The ECJ gave a firm and relatively simple response.  The WTD, it said, precludes national legislation from curtailing a worker’s entitlement to paid annual leave on death.   It stressed that holiday entitlement is ‘a particularly important principle of European law from which there may be no derogation’.  It is clear from previous case law that where it is impossible for a worker to take holiday because the employment has ended, then there is an entitlement to pay in lieu.  The fact that the relationship has ended by reason of the worker’s death, rather than by any other means is irrelevant.  Indeed, a payment in lieu in these circumstances is ‘essential to ensure the effectiveness of the entitlement to paid annual leave’ under the WTD.  Furthermore, it does not have to be the individual who has that entitlement who brings the application - it can be done on behalf of his or her estate.  

The decision is entirely consistent with the trend of judicial interpretation of the WTD (and the Working Time Regulations, by which the WTD is implemented in the UK).  It does seem to move us further away from the original framing of the WTD as health and safety legislation, protecting a worker’s right to sustained periods of rest: but there is an internal logic to the decision.   As I say, this is an area with a lot of movement at the moment - following the ECJ’s decision on commission payments last month, we await the EAT’s verdict at the end of July in two cases dealing with the question of the inclusion of overtime in the calculation of holiday pay.  Though happily, I will be on holiday by then.

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