At the end of an employment contract, no holiday days must be left unpaid. But how do you determine the value of a holiday?
The value of a holiday (or non-holiday days) is determined by four things. First of all, you need to look at the fixed salary. In addition, you look at the holiday allowance, the value of structured bonuses and the amount of the employer's pension contribution.
The Facts
If an employee leaves employment or is fired and still has 628.67 unused vacation hours, the employer has to pay it off. The value of the days is determined on the basis of the fixed salary and the holiday allowance. However, the employee might consider that the structural bonuses paid to him and the employer's pension contribution are also counted. The judge is of the opinion that the value of these bonuses and the value of the employer's pension premium must indeed be taken in consideration because it is compensation for the employee.
Considerations
The judge argues that the right to a paid holiday is a fundamental right. This is stated in Article 31, paragraph 2 of the EU Charter. However, the article says nothing about the amount of wages to be paid during holidays. According to the EU Court of Justice in Robinson / Steele (JAR 2006/84) this amount should be equal to the normal wage. The value of an unrecognized holiday can then be determined on the basis of all components that are essentially related to the duties of the employee who is in his/her employment contract for which he/she receives a financial compensation.
Bonuses
If the employee regularly receives bonuses that depend on his/her own salary and his/her team performance, the judge sees it as a compensation for the performance of assigned duties. According to the judge, there is an inseparable link between reward and assignment during employment. In other words, the judge will count the bonuses too.
Pension Premium
The employer's contribution to pension premium is paid during holidays and must therefore also be included in the valuation of remaining holiday days. The judge looks at the last five full years of work. For example, if the average bonus has been € 105,059 gross per year and the employer's contribution to pension premium totaled up to € 9,578.64, then the employee is entitled to a loss of € 34,514.27 gross (plus the statutory interest rate and € 3,451, 43 to legal increase).
Consequences in Practice
Article 7:641 BW of the Dutch Civil Code stipulates that the remaining holidays must be paid at the end of a contract of employment. The law says that a holiday is equally worth a day's pay. In practice, however, this is unclear. Many employers pay the basic salary, plus fixed salary components such as vacation pay and the thirteenth month. That's clear. But it will be harder if the employee gets variable payroll items, such as bonuses. In such a case, a judge can give clarity. This will be based on European jurisprudence. It says that the value of holiday days is determined by counting all the components that are essentially related to the tasks in the employee's contract.
Translated by Asta Kerkhoven
Source:
https://www.xperthractueel.nl/ontslag/waarde-van-een-vakantiedag/