Holiday Pay

A worker who does not exercise their right to take annual leave during the relevant leave year does not automatically lose the right to that period of untaken leave at the end of the leave year.

The CJEU has held in Max-Plank-Gesellschaft v Shimizu that unless the employer is diligent in giving the worker the opportunity to take the leave (under EU law), they will not automatically lose the right to take it at a later time.

The Claimant worked at a private scientific support institution in Germany until 2013. He brought a claim for unpaid holiday from 2011 and 2012. Under German law, as in English law, untaken leave does not carry over from one year to the next. This case was referred to the CJEU by the German Federal Labour Court.

The CJEU held that in accordance with the Working Time Directive, untaken leave should not be lost automatically by a worker who has failed to exercise his right to take it, unless the employer can prove that they have ‘diligently’ brought to the worker’s attention their right to do so. The burden of proof here rests with the employer. Therefore, while it is not necessary to insist that employees take their annual leave, employers must keep their employees informed of this right and give them sufficient time to exercise it. This might include a reminder at the mid-point of the leave year and again closer to the end of the leave year that they have leave outstanding, with the number of days leave that the employee is still entitled to take.

Even though the Respondent in this case was a private company, the CJEU held that the right to paid leave was enforceable between private parties and not just State bodies as it is in the EU Charter and does not stem solely from a Directive.

Employers should bear this decision in mind and ensure that they keep staff informed of their outstanding leave entitlement to ensure that the employee is given enough time to exercise their right and to prevent and sudden influx of requests for leave at the end of the leave year.

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