Holiday compensation becomes part of the estate

On 6 November 2018, the Court of Justice of the European Union (hereinafter referred to as: CJEU) passed a judgement in two combined cases: C‑569/16 and C‑570/16 Stadt Wuppertal/Maria Elisabeth Bauer and Volker Wíllmeroth / Martina Broßonn. This judgement applies to the inheritance of the right to holiday compensation. 

What are the contents of the judgement?

  • CJEU ruled that the European Union law does not allow for an automatic loss of days of the annual paid leave (that he/she is entitled to under the EU law).
  • At the same time, death of an employee does not result in expiration of the right to a leave, and heirs may demand holiday compensation from employers for the annual paid leave unused by the deceased.
  • Importantly, this right is granted to the heirs, even if the national law excludes the possibility of the holiday compensation inclusion in the entity, and this obligation applies to private employers, and those of public authority. 

What does it mean to employers?

  • The right to the holiday compensation does not expire with the death of a worker.
  • The right to the holiday compensation payment becomes part of the estate.
  • The heirs of the deceased employee may claim from his/her former employer to pay the holiday compensation.
  • The employer should organise the working time in such a way that the employee has a real opportunity to use the holiday leave and does not accumulate holiday leave days granted to him/her, and in consequence – high holiday compensation.

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