June 06, 2020

Labour law: Annual leave – 5 things you should know

Annual leave is often associated with various problems and confusion, both in terms of when to use it and in cases of termination of employment contracts. In any case, it is good to know the following:

1. Full annual leave

The right to annual leave is acquired after 6 months of uninterrupted employment in a particular calendar year. For example, if a worker was employed on May the 1st 2020, the employer will have to provide that worker with full annual leave for 2020, under condition that the employment lasts at least until the end of November the 1st of 2020. Thus, full annual leave is possible to achieve even though the employment in that calendar year lasted significantly less than a year.

The minimum full annual leave for one year is 4 weeks. Calculated in days, if you work 5 days a week then you have 20 days of annual leave. If you work 6 days a week, then you have 24 days of annual leave.

2. Proportional annual leave

The right to proportional annual leave is acquired in situations when the employee does not have 6 months of uninterrupted employment in a particular calendar year. For example, if a worker is employed on November the 1st 2020 and continues to work until May the 1st 2021, that worker will not be entitled to full annual leave even though he has worked continuously for more than 6 months. This is because these are two different calendar years, so such worker will be entitled to a proportional annual leave of 2/12 of the full annual leave for 2020 and 5/12 for 2021.

3. Compensation for unused annual leave

In certain cases, employment is terminated before the employee has been able to use all of his remaining days of annual leave. According to the Labor Law, in such cases the employer must pay the employee compensation for each day of unused leave. It is necessary to know that the notice period counts during the annual leave in case the employee is released from work during the notice period. Therefore, in practice, two situations often occur: (a) in the event of dismissal, the employee will spend his unused annual leave during the notice period, or (b) the employee and the employer enter into an agreement to terminate the employment immediately, without notice period, but the employer pays the worker compensation for unused annual leave.

4. Schedule of use of annual leave

Each employer is obligated to publish the schedule of annual leave no later than June the 30th of the current year. If the employer fails to do so, or if he violates other regulations regarding annual leave in general, he risks committing a serious offence with a large fine. When determining annual leave, the employer must also take into consideration the time when the worker is able to take leave (eg. the worker’s family circumstances), so that determining annual leave is not a strictly unilateral right of the employer.

If the annual leave is used in parts, in the current calendar year it must be used for at least two weeks continuously, unless otherwise is agreed in writing between the employee and the employer. The so-called old annual leave must be used by June the 30th of the following year, and if the worker doesn’t do so even though the employer has allowed him to use such leave, the worker loses that right forever.

5. Which regulation to apply?

Annual leave is regulated by the Labor Law as the so-called general employment law, however, many employers have special rules on annual leave included in employment contract, working regulations or collective agreement.

If annual leave is regulated by several different regulations, it is often a question which regulation is applicable. In labor law applies the principle that the so-called most favorable right, that is, the most favorable regulation is being applied to workers. This means that in relation to a specific issue, that is, a specific right, between several possible regulations, it should be applied the regulation that regulates this right in the most favorable way. This so called “Cheery picking” – combinations and application of several possible regulations to a particular right. This would not constitute an obligation of the employer or the right of the employee, but such combinations could also be considered under condition that the employer and the employee have agreed on this.

Other

Labor law is a very complex area of law that includes a number of regulations that need to be analyzed. In addition to all the above, in the case of checking the annual leave, it is always necessary to check what exactly is written in the employment contract, the working regulations, other internal acts of the employer and the collective agreement, if applicable. Also, for the purpose of accurate case analysis, it would be advisable to consult with a lawyer specialized in labor law.

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The information in this article do not constitute legal advice in relation to a specific legal issue, but rather general legal information published for information purposes.

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