Continued pay for vacation and illness

Summer is just around the corner and employees are preparing for their vacations. It is important for employers to understand what vacation pay entails and how to proceed if an employee becomes ill before or during their vacation. Following an article on the Advocatie website, the aforementioned topics will be discussed and, as an employer, you will also go into the vacation season prepared.

Continued pay during vacation

An employee is legally entitled to continued payment of his full wages during his vacation. This includes the usual wage he would have received if he had worked. In addition to basic pay, this also includes compensation directly related to his work, such as bonuses, vacation pay and allowances.

The Supreme Court ruled last year that the right to continued payment of full wages during vacation applies to both statutory and non-statutory vacation days. Statutory vacation days are the vacation days every employee is entitled to in the Netherlands. This is four times the number of contractual hours per week annually. Above-legal vacation days are the days you have accrued or received above the legal minimum.

Please pay sick employee

If a sick employee goes on vacation with the permission of his employer or company doctor, he is entitled to full payment of his wages. This applies even if he received less pay due to illness prior to his vacation. In fact, the Court of Justice of the European Union ruled in 2021 that a sick employee must maintain a comparable financial position during his vacation compared to employees who worked during the same period. Therefore, lower pay due to the employee’s illness may not be taken into account during vacation.

Employee sick before his vacation

In principle, an employer may not deduct vacation days from the vacation balance of an employee who calls in sick after his vacation has been requested and approved, but before he actually goes on vacation. Indeed, recently, the Supreme Court ruled that a scheduled vacation of a sick employee does not count as a vacation unless the employee has expressly consented to the designation of those days as vacation or this follows from a written agreement. If the employee has not expressly consented, the employee retains his vacation days and can still take them at a later time.

Should the company doctor deem that the employee’s medical condition does not allow for a vacation, the employer may withdraw its consent to the vacation. In this case, the employee must stay home and work on his recovery. If the employee disagrees with the company doctor, he can request an expert opinion from the UWV.

Employee sick during his vacation

If an employee falls ill during his vacation, the vacation days are converted into sick days from the time of reporting sick. These sick days may not be deducted from excess vacation days, unless this has been agreed in advance in the employment contract or collective bargaining agreement. Employees are often unaware of this right. The rationale behind this right is that vacation time is meant to recharge, and when sick, vacation does not serve that function.

Employees who fall ill during their vacation should report the illness to their employer as soon as possible and seek treatment from a doctor. When in doubt about the sick report, the employer may require the employee to submit a statement from a (foreign) doctor to prove that he has been sick. In addition, the employer must remain available to the employee during his illness.

Failure to comply with these obligations can be a valid reason for dismissal, with the employee not even being entitled to a statutory transitional payment in certain cases.

Action

Employers would do well to inform their employees in advance about the absenteeism rules, for example by means of a clearly elaborated absenteeism protocol. This can potentially prevent any discussions afterwards.

Questions?

Do you have questions about continued payment of wages during vacation and illness? Then contact one of our lawyers by mail, telephone or fill in the contact form for a free initial consultation. We will be happy to think along with you.