A recentdecision of the Court of Justice of the European Union (CJEU) has further elaborated upon the parameters of the Working Time Directive (2003/88 EC). The court has ruled that where a worker has accrued but untaken statutory leave entitlement at the time of their death, then their estate will be entitled to a payment in lieu in respect of the untaken leave.

In Bollacke v K+K Klass & Kock B.V. & Co KG C -118/13 the deceased worker's widow brought a claim in the German Courts seeking his unpaid holiday pay under the Directive. As he had been ill for some time before his death he had 140.5 days' untaken holidays. Her claim was rejected by the German courts and on appeal the matter was referred to the CJEU to consider the requirements and the scope of the Directive.

The CJEU reiterated the point that the right of every worker to paid annual leave has to be regarded as a particularly important principle of European law.  It went on to state that where an employment relationship ends because of a worker's death a payment in lieu is "essential to ensure the effectiveness of the entitlement to paid annual leave". It noted that the Directive did not place any conditions on a worker's right to receive payment in lieu of unused holiday leave, except that the employment relationship must have ended and that the leave must be outstanding.  The Directive treats entitlement to leave and to payment as a result of leave as being two aspects of a single right.  The right forms part of an essential principle of EU social law and as a consequence a restrictive interpretation of this article cannot be taken by the Court. The European Courts have developed employee's rights to annual leave in a number of ways.  It has already been established by the CJEU that where it is not possible for a worker to take holiday because the employment relationship has been terminated then the worker is entitled to a payment in lieu at the end of the relationship (Schultz-Hoff v Deutsche Rentenversicherung Bund [2009] IRLR214). This latest development confirms a further extension of annual leave entitlements and an employer's obligations where an employee dies in service with accrued but unused holidays.