Unused vacation days do not automatically expire under Dutch law

The Dutch Civil Code stipulates that statutory vacation days – 20 days per year in cases of full-time employment – expire six months after the calendar year in which they were accrued, whilst non-statutory vacation days expire five years after the end of the calendar year in which they were accrued.

However, following EU and national case law, employers have a duty of care and information towards employees of their annual leave entitlements, with failure to comply with the associated obligations potentially resulting in the non-expiry of the vacation days. This entails that employers must “actively and timely” inform their employees of the risk of expiry of vacation days and support employees to take vacation days in time. The burden of proof that these obligations are complied with lies on the employers. If this duty of care and information is not complied with, or if the employer cannot prove that it has, the employee can successfully challenge the expiry of the vacation days. This could lead to substantial claims for compensation for the accrued but unused vacation days on termination of employment.

As the new year begins, Amsterdam-based employment law experts Lilian Peels and Floor Hintzen urge employers to “take action and use the start of the new year to inform employees individually and in writing regarding their outstanding vacation days and consequences of not taking these days before the expiry date.”

To comply with the duty of care and information, Peels and Hintzen recommend employers to at least once a year, but preferably twice a year (at the beginning and middle of the calendar year), provide employees individually and in writing with precise information on vacation entitlements. This notice should detail outstanding vacation days, distinguishing between the statutory and non-statutory vacation days, as well as the consequences of not taking these days before the expiry date.

Referring employees to an internal HR system in which vacation entitlements can be reviewed, is not sufficient. Instead, employers should enable and, if necessary, encourage employees to take their vacation days before the expiry date; and keep accurate records for each employee regarding both the outstanding vacation day balance (distinguishing between the statutory and non-statutory vacation days), and the documentation of notifications sent to employees to inform them of outstanding vacation balances and potential consequences of not taking them in time.