The new holiday legislation: getting one's house in order

The new holiday legislation: getting one's house in order

Viola Zanetti

On 1 January 2012 the new holiday legislation came into force. The most significant change relates to the introduction of the 6-month expiry date for statutory holiday. The 5-year time limit still applies to holiday entitlement accrued prior to 1 January 2012 and holiday over and above the statutory minimum. Keeping track of these various expiry dates and time limits for holiday entitlement requires well-organised records on leave. This article will serve as a guide, to lead you through the maze of the new holiday legislation, problem-free.

What has changed?

The most significant changes within the new holiday legislation relate to:

• The time limit for statutory holiday
• The accrual of statutory holiday entitlement for employees who are on sick leave

The time limit for statutory holiday

Statutory holiday is the minimum number of days' holiday to which an employee is entitled, i.e. four times the number of days/hours per week. In fulltime employment this is 20 days' holiday a year. As a result of the new holiday legislation this accrued statutory holiday will expire six months from the end of the calendar year in which it is accrued, i.e. after 18 months. This is a change from the old situation, where the time limit on taking statutory holiday was five years.

In the Netherlands it is common practice for employees to be awarded extra days' holiday on top of the statutory holiday, by their employer. These are over and above the statutory minimum. The 5-year time limit on taking any holiday over and above the statutory minimum still applies. The option to take payment in lieu of any holiday over and above the statutory minimum remains unchanged.

The new holiday legislation will not have retroactive effect. This means that holiday entitlement accrued before 1 January 2012 is still valid. The time limit on taking this holiday is still five years. 

Statutory holiday after 1 January 2012  -> expires after 18 months

Holiday over and above the statutory minimum after 1 January 2012 -> lapses after 5 years

Remaining holiday entitlement from before 1 January 2012          -> lapses after 5 years

The accrual of statutory holiday entitlement for employees who are on sick leave

The basic premise of the holiday legislation is that employees that receive a wage also accrue holiday entitlement.

Under the old holiday legislation an exception was made to this basic premise for employees on sick leave. For these employees, the accrual of holiday entitlement was limited to the last six months of the period of sick leave. An employee who was only on partial sick leave would only accrue holiday entitlement over the period that they actually worked.

Under the new holiday legislation an employee on sick leave who is entitled to a wage will accrue the same level of holiday entitlement as one who is not on sick leave. In general, it is assumed that parties may agree that holiday over and above the statutory minimum will not be accrued during the period of sick leave.

The 6-month expiry date (for statutory holiday) or the 5-year time limit (for holiday over and above the statutory minimum) also apply to an employee on sick leave. Furthermore, it will be possible to book off a day's holiday not only from holiday over and above the statutory minimum but also from the minimum holiday owed. This is an option if an employee who becomes ill during a holiday agrees to it. It is advisable to put this in writing.

An employee on sick leave will accrue holiday entitlement during the entire period of sick leave if they are entitled to a wage. This holiday entitlement will be forfeited if the employee does not use it in time.

Exceptions to the expiry date

The 6-month expiry date will be strictly observed. There are, however, two exceptions.

• The employee who can make a case for the fact that he was not reasonably in a position to take any holiday. The 5-year time limit will then apply.
• The employer and employee can deviate from the statutory rules in writing, to the benefit of the employee, for example in the employment contract.

Records on leave

The new holiday legislation does not make keeping records on leave any easier, but it does make it more important. So that you can keep track in the labyrinth of various expiry dates and time limits we advise you to make a note of the expiry dates or time limits that apply to any holiday. Holiday that expires or lapses first must be the first to be booked off.

Tips

• Keep proper records on leave:

In the records on leave, distinguish between statutory holiday and holiday over and above the statutory minimum accrued after 1 January 2012 and any remaining holiday entitlement from before 1 January 2012.

Keep up-to-date records of the various expiry dates and time limits, as well.

• Keep your employees promptly informed of the amount of holiday they have accrued and the dates on which this will lapse/expire.
• Contact the company doctor if an employee believes they can claim exceptional circumstances. 
• Make written agreements regarding any holiday over and above the statutory minimum.
• If necessary, amend your model employment contract and/or staff handbook.