19 June 2014 #Employment
The issue of holiday pay and interpretation of the Working Time Directive remains a hot topic across the EU, not just in the UK. At the end of July, the EAT is due to hear Neal v Freightliner Ltd and Fulton and another v Bear Scotland Ltd to determine whether overtime pay must be included in calculation of holiday pay. However, the outcome of these cases will be determined largely by how the European Court of Justice interprets the Working Time Directive.
This is borne out by the European Court of Justice decision last week that workers are entitled to accrued but untaken statutory holiday entitlement upon termination of employment under the Directive, even where the termination is the result of the employee’s death.
The case concerned a worker in Germany, Mr Bollacke, who had accrued but untaken annual leave entitlement at the time of his death. His widow brought a claim in the German courts seeking his unpaid holiday pay under the Directive. Mr Bollacke became seriously ill in 2009. He was unfit for work for several months and died in November 2010. He had 140.5 days` untaken holiday. In January 2011, Mr Bollacke`s wife sought payment from the employer in respect of that entitlement. When the employer refused, Mrs Bollacke brought a claim before a German court. This was rejected, and on appeal the matter was referred to the ECJ to consider the requirements of the Directive.
The ECJ held that the Directive precludes national legislation from providing that workers` entitlement to paid annual leave is lost when they die. It stated that a worker`s entitlement to paid annual leave is a particularly important principle of European law from which there may be no derogation. It has already been established by the ECJ (in another German case) that, where it is impossible for a worker to take holiday because the employment relationship has been terminated, the worker is entitled to a payment in lieu (Schultz-Hoff v Deutsche Rentenversicherung Bund  IRLR 214).