Inform your employees: it’s time to take your holidays
18 Nov 2020
Around this time of the year, questions may arise about taking up outstanding holidays. Especially in 2020, the year of the pandemic - during which temporary unemployment has been widely used -, the situation becomes even more complex. There is one key message: make sure your employees take up all their outstanding holidays before 31 December 2020.
General principles
The right to take annual leave is a fundamental right that cannot be waived by the employee. Holidays must be taken at the latest by 31 December of the vacation year, which means there’s a general prohibition to transfer outstanding holidays to the next year or to have them paid out at the end of the year. In this respect, it is important to make a distinction between statutory holidays and extra-legal holidays. Contrary to statutory holidays, extra-legal holidays can in principle be carried over to the next year. The source of law in which the attribution of extra-legal holidays is laid down (CBA, work regulations, company policy ...) should always be verified for the applicable modalities in this respect.
If, at the end of the year, it proved impossible for a white-collar worker to take up all or part of his statutory holidays (e.g. as a result of a long-term suspension of the employment contract due to illness or an accident, however, not because of a busy schedule), the employer must pay out the outstanding statutory holidays, at the latest by 31 December of that year.
Non-compliance with the legislation on annual leave - e.g. if an employer actively prevents his employees to take up all statutory holidays by the end of the year - can be sanctioned with a criminal or administrative fine.The fine will be multiplied by the number of employees involved. As an employer, it is therefore recommended to timely send out a staff memo alerting the employees to take up their outstanding holidays. This way, there is evidence that the employer is effectively giving the workers the opportunity to take up their holidays.
For the sake of completeness, please note that there’s also a general obligation to take up all working time reduction days before the end of the calendar year and that transferring outstanding days to the next year is equally prohibited.
Holidays and temporary unemployment
The government’s decision to introduce a simplified procedure of temporary unemployment due to force majeure resulting from the COVID-19 pandemic has been a key support measure in combating the economic fallout of the current health crisis. Temporary unemployment has been widely used, with many employees having gone through - and still going through - extensive periods of temporary unemployment. It’s likely that, in many companies, a lot of these employees currently still have outstanding statutory holidays.
It might be argued that - taking into account the circumstances - such periods of extended temporary unemployment could constitute an impossibility for a white-collar worker to take up all statutory holidays, however, this could be subject to debate. In such a case, the employer must pay the remaining balance of the white-collar worker’s statutory holidays by 31 December (also see above). Nevertheless, the unemployment regulations stipulate that an employee is not entitled to unemployment benefits for days that are covered by holiday pay. Consequently, if the employer were to pay out the outstanding statutory holidays at the end of the year, these holidays are covered by holiday pay and the employee was not entitled to unemployment benefits for these days. This means that the National Employment Office (NEO - “RVA”/”ONEM”) can recuperate these unemployment benefits from the employee. The same reasoning applies in case an employer - despite the prohibition to do so - still allows its employees who are put on temporary unemployment to transfer outstanding holidays to 2021. Note that the NEO has already announced that they will perform extra checks in order to avoid such cumulation of holiday pay and unemployment benefits.
In order to avoid a recuperation of the unemployment benefits for days that should have been covered by the outstanding statutory holidays - as well as to avoid any sanction for non-compliance with the legislation on annual leave -, it is recommended for an employer - in deliberation with the employee - to have the latter take up these outstanding holidays in the coming weeks, even if the employee is currently planned to be in temporary unemployment until the end of the year. In such a scenario, the employee should not be put on temporary unemployment for those days, which instead must be registered as statutory holidays.
Note that, if all the statutory holidays are taken before 10 December, the NEO will pay for the public holidays of 25 December and 1 January. When this is not the case and the employer registers statutory holidays after 10 December, there is a possibility that the employer must pay for the public holidays. Indeed, the legislation on public holidays states that an employee retains the right to salary for a public holiday that falls within a period of 14 days following the start of a suspension of the employment agreement for reasons of force majeure, in this case temporary unemployment due to force majeure COVID-19.
Key takeaway
The COVID-19 pandemic has had an undeniable economic impact on companies, with many of them having resorted to putting their employees on extended periods of temporary unemployment. As a result, these employees might currently still have outstanding statutory holidays and employers should be aware of the potential impact in this respect.
In order to make sure that companies fully comply with the legislation on annual leave, we recommend that all outstanding statutory holidays are taken up before the end of the year.
If you have any questions regarding the above, do not hesitate to contact us.
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