Netherlands: The Netherlands State Is Liable For Holidays Missed

Subdistrict Court of The Hague 6 February 2012, LJN: BV7318, BV7201, BV7212

Background

In the Schultz-Hoff judgment of 20 January 2009, the European Court of Justice determined that it follows from the European Working Time Directive ('the Directive') that all employees are entitled to at least four weeks' paid annual leave, whatever their state of health. On the basis of the then applicable Section 7:635 (4) of the Dutch Civil Code ('DCC'), a sick employee only accrued entitlement to holidays over the period of the last six months of his or her incapacity for work. Therefore, Dutch legislation appeared to be contrary to the Directive, and as a consequence, Dutch law was amended as of 1 January 2012. As of that time, sick employees accrue entitlement to holidays during the entire period of their incapacity for work.

This law amendment arrived too late for many sick employees. They had already been sick before 1 January 2012 and had therefore accrued fewer holidays than they were entitled to on the basis of the Directive. In principle, these employees cannot call their employer to account, because until 1 January 2012 the employer had acted entirely in accordance with the then applicable legislation. In addition, an interpretation of the law in conformity with the Directive would lead to an interpretation that would be contra legem, i.e. in conflict with Dutch law.

Legal Proceedings

This situation arose in the three cases in which the Subdistrict Court of The Hague had to render a judgment. In the cases at issue all three employees had been paid out too few holidays at the end of their employment. After all, pursuant to Section 7:635 (4) of the DCC, they had only accrued holidays during the last six months of their incapacity for work. Subsequently, the employees decided to hold the Netherlands State liable for the loss they had suffered as a result.

The Subdistrict Court first and foremost considers that the conflict between Section 7:635 (4) of the DCC and the Directive is the result of an incorrect interpretation of the Directive. This means that the Netherlands State may be held liable if in its interpretation the State apparently and seriously failed to recognize the limits of its discretionary power. Next, the question arises whether the Netherlands State could interpret the Directive in this way. The Subdistrict Court takes the position that it already appeared from the 2001 Bectu judgment of the European Court of Justice that a limited accrual of holidays during sickness is in conflict with the Directive. Since this judgment, the Netherlands State could reasonably no longer adhere to Section 7:635 (4) of the DCC. Therefore, the fact that the Netherlands State did not amend this section is unlawful towards the employees involved. With regard to the causal link, the Subdistrict Court considers that if the Directive had been implemented within a reasonable period of time after the publication of the Bectu judgment, the employees would have been entitled to compensation of holidays over the entire period of their incapacity for work.

On the basis of the above, the claims of the employees are awarded. The Netherlands State will still have to compensate them for the holidays missed. Incidentally, Minister Kamp of Social Affairs and Employment has announced that he will appeal against the judgments. Therefore, we still have to wait and see how this will work out in the future.

Conclusion

• The Subdistrict Court has severely punished the Netherlands State for the incorrect interpretation of the Directive. This judgment offers employees who have been sick for more than six months before 1 January 2012 and who have consequently accrued fewer holidays, the opportunity to sue the Netherlands State for damages.
• The entitlement to damages will become time-barred on the basis of Section 3:310 (1) of the DCC five years after the employee became aware of the loss and the person liable for this loss. In the opinion of the Subdistrict Court of The Hague, employees who have been sick in the past five years and as a consequence thereof have accrued fewer holidays, may hold the Netherlands State liable.

First published in the Kennedy Van der Laan newsletter - May 2012

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