Case update (1): Holiday pay – ‘til death do us part (and longer)

holiday pay - deck chairSummary: Does the death of a worker extinguish his or her right to paid annual leave?

No, held the CJEU (the new name for the European Court of Justice) in the case of Bollacke v Klass & Kock B.V. available here.

Facts: Mrs Bollacke raised an action in a German national court against her late husband’s employer in respect of payment in lieu for paid annual leave which he failed to use, owing to sickness, before to his death. The matter was referred to the CJEU after the court of first instance rejected the claim as, under German national law, the right of an employee to payment in lieu for holidays was extinguished on death.

Article 7 of the EU Working Time Directive gives every worker the right to paid annual leave, including payment in lieu. The CJEU held that this extended to those who had been ill and whose employment relationship had then ended due to the death of the employee. The only condition for workers to be entitled to such a right under the Article is that the employment relationship had ended and that the worker had not taken all paid annual leave up until the end of that relationship. Further, receipt of the payment in lieu is not dependent on the interested party making an application.

Consequently, national legislation which states that such a right is lost on the death of a worker will not be compatible with this decision and is open to challenge.

Implications: If a worker dies having accrued holiday which they were unable to enjoy due to sickness up to the date of their employment relationship terminating, payment in lieu should be made to the deceased’s estate. Employers may also wish to review what their arrangements are for dealing with bereavements, including practice for notifying families and dealing with workers’ effects.