Temporary unemployment due to force majeure resulting from COVID-19 or the July 2021 floods - equalisation for yearly holiday entitlement
25 Jan 2022
In December of last year, legislation was adopted to equalise all periods of temporary unemployment due to force majeure resulting from the COVID-19 pandemic in 2021 with days worked for the legislation on annual leave. Moreover, days of temporary unemployment due to force majeure resulting from the July 2021 floods were also equalised in this respect. As a result, employees who – in 2021 – were put on temporary unemployment due to force majeure resulting from those two reasons will still enjoy full holiday entitlements in 2022.
Similar legislation was adopted in December 2020, to equalise days of temporary unemployment due to force majeure resulting from the COVID-19 pandemic during the period from 1 February 2020 up until and including 31 December 2020 with days worked for the legislation on annual leave (see our newsletter on this topic)
In addition, employers who – in 2021 – had to introduce a system of temporary unemployment due to force majeure resulting from the COVID-19 pandemic or the July 2021 floods for their white-collar in workers can be entitled to partial compensation of the cost this equalisation entails.
Issue and impact
Periods of temporary unemployment due to force majeure are, in principle, not equalised with days of activity for the application of the legislation on annual leave. As a result, days of temporary unemployment due to force majeure in 2021 would have an impact on employees’ holiday entitlements in 2022, as these holiday entitlements are determined based on the number of days worked (or days of inactivity that are equalised with working days) in the previous year (also see our 2020 newsletter with the general principles and possible impact in this respect).
The equalisation of days of inactivity as a solution
In order to ensure that workers who have been temporarily unemployed due to force majeure resulting from the COVID-19 pandemic and/or the floods that affected part of the country in 2021, retain their full holiday entitlement in 2022, these days of temporary unemployment must be equalised with days worked for the application of the legislation on annual leave.
In this respect, the Royal Decree of 7 December 2021 provided for the required equalisation of all days of temporary unemployment due to force majeure resulting from the COVID-19 pandemic in 2021. Likewise, the Royal Decree provided for an equalisation of days of temporary unemployment due to force majeure resulting from the July 2021 floods, for the period from 14 July 2021 up until and including 31 December 2021.
As a result, employees who – in 2021 – were put on temporary unemployment due to force majeure resulting from those two reasons will still enjoy full holiday entitlements in 2022.
Partial compensation for cost of equalisation
It should be noted that the above-mentioned equalisation has a cost in the form of the part of the workers' holiday pay that would not have been due without the equalisation; to be paid by the holiday funds for blue-collar workers and by the employers for white-collar workers. In order to limit the financial impact of the equalisation, the government decided to introduce a form of partial compensation in this respect, again similar to last year.
To compensate for the cost of the equalisation of days of temporary unemployment due to force majeure resulting from the COVID-19 pandemic for blue-collar workers, the National Office for Annual Leave will receive a certain amount. In addition, a global budget is made available to employers as partial compensation for the cost of equalisation for white-collar workers in this respect. Employers don’t have to take any action themselves, if they’re entitled to compensation, the National Social Security Office will calculate the amount thereof and deduct it from the employer’s social security contributions of the second quarter of 2022.
With respect to the additional cost of equalisation of days of temporary unemployment due to force majeure resulting from the July 2021 floods, an additional budget is made available to employers as partial compensation for the cost of equalisation for white-collar workers. Any compensation in this respect will also be calculated by the NSSO and deducted from the employer social security contributions due for the second quarter of 2022, however, the employer has to file a request itself by 31 May 2022 at the latest.
If you have any questions regarding the above, don’t hesitate to reach out, we’d love to hear from you.
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