The end of a calendar year is approaching. In this connection, several questions often arise regard-ing any remaining holiday days and in some cases also the payment of holiday pay.
In the following, we aim to answer some of the most common questions that arise.
The basis of the Holiday Act is that employees are entitled to 25 working days of holiday time off. The statutory scheme is that all days are considered working days, except Sundays or public holidays. This means that Saturdays are also considered working days in the sense of the Holiday Act. 25 working days therefore constitute 4 weeks and 1 day of holiday for workplaces that operate with a normal five-day week.
The employer and employee must discuss when the holiday is to be taken in good time before the actual holiday is taken. However, if no agreement is reached between the parties, it is the employer who has the final decision-making authority. The employee can still demand to take the main holiday (18 working days) during the main holiday period, 1 June to 30 September. In addition, the employee may demand that the remaining holiday (7 working days) is taken in total within the holiday year.
The starting point is that the employee is obliged to take their holiday every year. The purpose is to ensure that employees have a certain minimum amount of annual leave.
However, there are some exceptions to this principle. In accordance with specific rules, it is possible to transfer holiday days to the following year. However, this must be agreed between the parties and the agreement must be in writing. Neither the employer nor the employee can unilaterally determine the transfer of holiday. The reason for the requirement for the agreement to be in writing is precisely that the transfer of holiday violates the basic starting point outlined above. In addition, writing is an appropriate way to create an overview of the circumstances between the parties.
It is only possible to agree to transfer up to 12 working days to the following holiday year. The transfer of more working days will mean that the employee receives significantly less holiday than is considered appropriate. The rule is intended to ensure that employees do not go long periods without holiday, regardless of whether the employee has apparently wanted this or not.
However, in cases where an employee has not actually taken the statutory holiday at the end of the year, all unused holiday days shall automatically be transferred to the following year. An employee should therefore never lose their holiday days, regardless of whether the failure to take holiday is due to a breach of the rules of the Holiday Act, illness or parental leave. It is also not permitted to pay out remaining holiday days so that the holiday days are lost. The holiday days to which an employee is entitled are automatically transferred to the following year.
However, these restrictions only apply to the statutory right to holiday, i.e. the 25 working days described above. It is not uncommon for 5 weeks’ holiday to be agreed in many workplaces. The holiday days in excess of the required 25 working days in accordance with the Holiday Act can be used more flexibly by the parties. These extra days can be carried over to the next year in addition to the 12 days allowed by the Holiday Act. Alternatively, the employer can decide to pay wages instead of cancelling these holidays. Both options require that the employee and employer agree on this. However, if the workplace is bound by a collective agreement, or something else is stated in the individual employment agreements, there may be restrictions on the right to resolve unused holiday days in this way.
The Holiday Act stipulates that employers must pay accrued holiday pay when employees actually take their holiday. However, the vast majority of employers pay accrued holiday pay in June instead of salary. This means that the employee does not receive a salary for June, even though they work that month. In practice, this is “repaired” by the employee receiving salary when they take their holiday, for example in July. The employer must be aware that if the employee does not take their holiday, they will be owed salary for June. The employer must ensure that this is paid to the employee.
Please feel free to contact us if you or your company have any questions about holiday entitlement and holiday pay in connection with the end of the year.
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