In this case, an employee, a driver, claimed that his employer had not paid the correct wages during his holiday. According to the employee, no account had wrongly been taken of, among other things, overtime worked. The subdistrict court had granted the employee’s claims. The employer appealed this to the Court of Appeal.
The Court of Appeal follows the legal framework set out by the subdistrict court:
Under article 7:639(1) of the Dutch Civil Code, an employee retains the right to wages during their holiday. This article must be interpreted in accordance with EU law (article 7 of European Directive 2003/88/EC).
Under this interpretation, holiday pay must, in principle, correspond to the employee’s usual remuneration. Where there are several pay components, careful consideration must be given to what constitutes normal/usual pay.
Overtime, because of its exceptional and unpredictable nature, does not in principle form part of this usual pay.
But in this case it did. According to the Court of Appeal, the overtime habitually worked by the driver must be counted towards the calculation of holiday pay. This is because this overtime was worked with the employer’s consent, and on a regular/structural basis.
Like the subdistrict court, the Court of Appeal considers that the scale of the overtime indicates that the overtime is to be regarded as inherent to the work, and thus formed an important part of the income.
According to the Court of Appeal, this means the requirements from the Hein/Holzkamm ruling have been met, namely:
- The overtime results from obligations under the employment contract;
- The employee performs overtime on a regular and predictable or foreseeable basis;
- The remuneration for overtime forms an important part of the total remuneration the employee receives for their professional activity
And so the Court of Appeal concluded that the overtime worked by the driver must be counted towards the calculation of holiday pay.
What does this ruling mean for you as an employer?
This ruling shows that structurally worked overtime can count towards the calculation of holiday pay.
As an employer, make sure you have good insight into the overtime worked by your employees (keep proper records of it). It is also worth checking whether what you have included in your employment contracts regarding overtime is still adequate.
Do you have questions or need advice in the field of employment law? Then contact us directly via info@thelegalcompany.nl or call 020 345 0152.
