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The ECJ has ruled that workers must be paid for statutory holiday entitlement unless the employer has ensured “specifically and transparently” that the worker has been given the opportunity to take the holiday entitlement. Employers are required to encourage workers to take their entitlement and to inform them in good time that any entitlement will be lost if it has not been taken.
Loss of entitlement will only be lawful if the worker has deliberately declined to take the leave and is fully aware of the consequences of doing so.
Ordinarily, the provisions of the Working Time Regulations 1998 in relation to carrying over statutory holiday means that holiday entitlement cannot be carried over. However, this will now be enforceable subject to the proviso that employers have encouraged workers to take leave and made them aware of any consequences for not doing so.
This case highlights the onerous obligation on employers to ensure that they have a clear holiday policy in place and encourages employers to issue specific reminders to all workers if they have any outstanding holiday entitlement.
Consequences for not doing so may impact heavily on human resources and business needs as workers may be entitled to more annual leave in one year than originally anticipated.