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Workers do not automatically lose right to payment in lieu of holidays if they did not seek to take their holiday entitlement

The European Court of Justice has decided in two German cases relating to the right to payment in lieu of accrued but untaken annual leave Working Time Directive. The ECJ found that under the Directive, and the Charter of Fundamental Rights, a worker does not automatically lose their accrued but untaken holiday entitlement at the end of the relevant reference period because they have failed to seek to take their holiday entitlement for that period.

However, the Directive permits the loss of holiday entitlement if the employer can show that it enabled the worker, in particular through the provision of sufficient information, to take the holiday before the end of the reference period. If the worker has not lost their holiday entitlement, they are entitled to a payment in lieu of any entitlement upon termination.

If you have any queries relating to employment matters, please contact our employment team..