Wife inherits dead husband’s holiday pay

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In a decision that could affect all EU countries, the European Court of Justice (ECJ) has ruled that a German company was acting against EU law when it refused to pay the widow of a former employee an allowance in lieu her dead husband’s outstanding holiday entitlement.

Entitlement to pay in lieu of holiday does not lapse when an employee dies

Prior to the ECJ decision, the Federal Labour Court had ruled that the employee’s outstanding holiday entitlement (140 days) was lost when he died and that no allowance was due to his widow. However, the European Court ruled that, under Article 7 of the Working Time Directive, entitlement to pay in lieu of holiday does not lapse when an employee dies and that full payment should be made to his widow.

Commentary

The ECJ ruling has overruled years of German practice and may have far reaching implications for German employers, as well as those in other EU countries where holiday entitlement is currently lost upon the death of an employee. Employees who have been on long-term sickness absence may have accrued significant holiday entitlement, the full value of which will now be payable to their estate. As well as the financial implications of this ruling, HR departments will be required to track all holiday accrual during long-term sickness absence and may also need to update their sickness absence policies.

Resources

Working Time Directive - Directive 2003/88/EC Gülay Bollacke v K + K Klaas & Kock B.V. & Co. KG ECJ C-118.13 For further information or to discuss any of the issues raised, please contact Stefanie Andrelang on +49 (0) 89 2422300 at Keller Menz - http://www.keller-menz.eu/. Disclaimer Content is for general information purposes only.  The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice.  If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances.  In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article.  For further legal information see our legal page. Circular 230 disclosure To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Copying If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.