Holiday pay payable on death of a worker, concludes ECJ
In the latest in a long line of cases about workers’ holiday pay entitlement, the European Court of Justice in Bollacke v K+K Klaas & Kock BV & Co KG found that not even the death of a worker stops an employer from the requirement to pay him or her for accrued annual leave. On the death of a worker, employers should pay any payments that would have been due to the deceased worker to his or her estate, including any outstanding wages. This case confirms that this includes payment for any accrued holiday that is untaken at the time of death. It will not be uncommon for a deceased worker who has been on long-term sick to accrue substantial annual leave, meaning that the employer could owe the worker’s estate a substantial sum.
Mr Bollacke, who worked in Germany, had been on long-term sick leave for more than eight months. The result of his illness was that he was unfit for work and he died in November 2010 while still in employment. On the date of his death, he had accumulated 140.5 days’ untaken annual leave.
Mr Bollacke’s wife and sole beneficiary sought a payment in lieu of the untaken annual leave from her husband’s employer. When this request was rejected, she brought a claim in the German courts. The German labour court referred to the ECJ the question of whether or not national legislation or practice that extinguishes a worker’s entitlement to paid annual leave on death, meaning that any outstanding holiday pay is not payable to the deceased worker’s estate, is compatible with EU law.
The ECJ noted that the entitlement of every worker to paid annual leave must be regarded as a particularly important principle of EU law from which there can be no exceptions. The Working Time Directive (2003/88/EC) treats entitlement to annual leave and to a payment for that annual leave as two aspects of a single right. The use of the expression “paid annual leave” in EU legislation shows that, for the duration of annual leave within the meaning of the Working Time Directive, the worker’s remuneration must be maintained. In other words, workers must continue to receive their normal remuneration throughout that period of rest and relaxation.
The ECJ went on to say that the Working Time Directive does not lay down any conditions for entitlement to payment in lieu of any accrued but untaken annual leave on the termination of the employment relationship. If the obligation to pay annual leave ceases at the end of the employment relationship because of the worker’s death, this would lead to the retroactive loss of the entitlement to paid annual leave because of circumstances that are beyond the control of the worker and employer.
The ECJ concluded that the Working Time Directive cannot be interpreted as meaning that entitlement to paid annual leave is lost because of the worker’s death. The death of a worker does not relieve the deceased worker’s employer of the need to make a payment in lieu of the sum to which the worker would ordinarily have been entitled. The ECJ also pointed out that such a payment cannot depend on the worker having made a prior application to take the leave.