On 12th June 2014, in the case of Bollacke v K + K Klass & Kock B.V. & Co.KG, the European Court of Justice (‘ECJ’) held that the employer was liable to make a payment (to the deceased worker’s estate) in lieu of holiday entitlement accrued by the worker, but not taken by him, up to the date of his death.
The case was brought by Mrs Bollacke, who is the wife and sole beneficiary of her late husband, Mr Bollacke. Mr Bollacke was employed by K + K in Germany from 1st August 1998 to 19th November 2010, the date of his death.
Mr Bollacke had been seriously ill since 2009. During 2009, he was unfit to work for more than 8 months. Although he returned to work, he was again unable to work from 11th October 2010 until the date of his death, just over a month later.
On the date of his death, Mr Bollacke had accrued 140.5 days of untaken holiday.
Mrs Bollacke applied to K+K for payment in lieu of the 140.5 days holiday which her late husband had been unable to take. K+K rejected that application on the basis that it had doubts that an inheritable entitlement could exist under German Law.
Mrs Bollacke commenced proceedings in Germany for the payment in lieu but the first instance Court rejected the application because, under the case law of the German Federal Labour Court, pay in lieu of accrued but untaken holiday at the end of the employment relationship does not arise where the relationship is terminated by the death of the employee.
The German Court referred the matter to the ECJ.
In deciding that the holiday pay was payable, and that the European Working Time Directive must be interpreted as precluding any national legislation or practice which provides that the leave entitlement is lost, and that there should be no payment for it, where the relationship ends because of the worker’s death, the ECJ noted that the:
(1) entitlement of every worker to paid annual leave must be regarded as a particularly important principle of European Union social law from which there may be no derogations;
(2) Working Time Directive treats entitlement to annual leave and to a payment on that account as being two aspects of a single right. Thus, if there was no entitlement to payment in lieu on the death of a worker that would have the retrospective effect of the loss of the entitlement to the paid leave itself.
The ECJ also held that entitlement to the payment in lieu was not dependent on an application for the payment having been made.
Implications and further information:
The implications of the Bollacke case are obvious for UK employers whose workers die while in service, including those in the road transport industry.
For further information about this case, or in relation to any other holiday pay issues, please contact Cambridge employment solicitor Nick Sayer on 01223 411421.