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Right to holiday pay survives employee’s death

BY Daniel Gorry
Employment Law & HR
BG Purple

Recent years (and, indeed, weeks) have seen some landmark rulings from the European Court of Justice on the hot topic of holiday entitlement.

This month saw the ECJ grapple with yet another quirk of the Working Time Directive; this time on the rather morbid subject of what happens to holiday entitlement on the death of an employee. 

Employers who have had the unenviable task of having to deal with the aftermath of an employee’s death will know that any money properly due to an employee is normally paid to the employee’s estate on their death. However, a court in Germany ruled that an employee’s entitlement to payment for accrued but untaken holidays ends on their death. 

The case was brought by the widow of a supermarket worker whose husband had been on long term sick leave prior to his death in 2010. He was still employed on his death and had accrued 141 days’ holiday at that point. The employer refused to make a payment in lieu of this holiday and the widow sued the supermarket for unpaid holidays. 

When the German labour court ruled against the widow, she took the case to the ECJ. The Court decided that the death of a worker does not bring their contractual and statutory rights to an end, therefore any payment made on the death of a worker should include an amount for outstanding holiday pay. 

While the death of an employee in service may be a rare occurrence, when it does happen it is common for the employee to have been off on long term sickness absence leading up to the death. This case serves as a reminder to employers that holidays do accrue during sickness absence and confirms that a payment should be made to the worker’s estate if the holidays are outstanding on death. 

This is the latest in a long line of ECJ cases dealing with the thorny issue of holidays. Followers of the ongoing holiday pay saga will remember that the ECJ recently ruled on the landmark case of Lock v. British Gas, finding that holiday calculations should include an amount for commission. The case has been remitted to the employment tribunal to decide how exactly this should be calculated in the UK and is expected to be heard at the end of this month. Keep an eye out for LAWmail updates sharing the latest news when it becomes available.

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