With the year end also being the end of the holiday year for many employers, a case from the Europe Court of Justice about the ability carry over untaken holiday from one year to the next is rather timely.
The purpose of annual leave is to allow workers to have a break from work, therefore it’s always been good practice to ensure that workers have the ability to take all the holiday they are entitled to. However, we suspect that a large number of employers then leave it to their workers to ensure they have booked and taken their holiday before the holiday year ends.
In the case of Max-Planck-Gesellschaft v Shimizu, the court decided that unless an employer has “diligently” given the employee the opportunity to take holiday, they can carry it over into the next holiday year.
In order to show they have done what is required, the employer does not have to force employees to take leave but must be able to demonstrate that the workers had the opportunity to take leave and were told that the leave will be lost if not taken.
If your terms and conditions of employment and/or holiday policy do not already explain that untaken holiday entitlement will not be carried over to the next holiday year and will be lost, they should be updated to make this clear.
It is also be sensible to issue a reminder to workers a reasonable time before the end of the holiday year, encouraging them to take their holiday or else it will be lost. We suggest that about now is a good time of year to do this.