Fiduciary
EMPLOYEE PAID ANNUAL LEAVE: WHAT ARE THE EMPLOYER'S OBLIGATIONS?
Paid leave is one of the rewards of working. Paid leave is a period of rest during which the employee is released from any service to the employer while continuing to be paid their salary.
Each employee is entitled to 26 days of leave per calendar year, i.e. 2.17 days of paid leave per month. Some collective agreements allow the employee to benefit from additional days of leave.
When an employee enters or leaves the company during the year, they are entitled to 2.17 days of paid leave for each full month worked. A period of more than fifteen calendar days is here considered to be a whole month.
Unlike parental leave maternity leave also gives the right to 2.17 days of paid leave per month.
The leave register
The employer must keep a leave book which records for each of their employees at least the number of days of leave to which the employee is entitled and the date and number of days of each period of leave taken. This register can be kept in paper or electronic format.
The leave register may be requested by the Labour and Mines Inspectorate in the event of an inspection and may be invoked against the employee in the event of a dispute.
The establishment of paid leave
The leave is in principle established according to the employee's wishes. However, the employer may refuse it to meet internal needs or the demands of priority employees - such as employees with children, for example.
Collective leave must be agreed between the employer and employees and notified in the first quarter of the current year.
The employer may refuse without cause the leave request of an employee who has less than three months' seniority, since an employee who arrives during the year is subject to a three-month waiting period before being able to take their leave.
If the employee falls ill during the period of leave, the latter must be modified to take account of the period of illness, and any leave not taken must be subject to new approval by the employer. However, an employee cannot extend their period of leave because they have been ill during it.
The employer may not force their employee to take leave during the statutory notice period. The request for leave must always be at the employee's initiative (except for collective leave), but the employer may refuse it for organisational reasons.
Holiday pay
Remuneration for paid leave is based on the average daily pay for the three months preceding the leave. Holiday pay thus takes into account overtime, night work and Sunday work, with the exception of benefits such as gratuities or bonuses.
Paid holiday pay is not to be confused with the payment of paid holidays, which is strictly prohibited by law: the employer is not entitled to pay the employee in exchange for their untaken holidays, except in the case of termination of the employment contract.
An employer who uses collective leave is obliged to pay holiday pay to all employees, including those whose leave balance does not cover the period of collective leave. Thus, for example, the employer cannot decide to grant unpaid leave to an employee who arrived at the company on March 16 and who will have accumulated 10.415 days of leave in August, when the company will be closed for the first 3 weeks of August (i.e. 15 working days).
Postponement of paid leave
The leave must be taken during the calendar year. Certain events may justify leave not being taken during the calendar year, regardless of whether these events are internal or external to the company.
In this case, the leave is legally postponed until 31 March of the following year - but this period is not in fact extinctive. Indeed, a decision of the European Court of Justice of 20 January 2009 (Cases C350/06 and C520/06) specifies that paid leave not taken at the end of a carry-over period for an employee who has not been able to benefit from their leave during the reference period cannot be cancelled by the employer, as could be the case, for example, for an employee on long-term sick leave.
It is also recommended by this case law that the deferral period should allow the employee to benefit from their right to paid leave.
It is therefore recommended that the employer provide in the collective agreement or in the internal rules of the company for a longer deadline for postponement than that provided for by Luxembourg labour law, for example until 31 March of year N+2.
Dismissal
An employer who decides for valid reasons to dismiss an employee who is on leave may notify them of the dismissal during the period of leave. However, the notice period may not begin to run before the end of the leave period.
Extraordinary leave
In Luxembourg, extraordinary leaves of absence exist which allow employees to be absent from work for the following personal reasons:
Family event | number of days | granted |
|---|---|---|
Marriage of the employee | 3 days | By the employer |
Act of partnership | 1 day | By the employer |
Marriage of a child of the employee | 1 day | By the employer |
Birth of a legitimate child | 10 days | 2 days from the employer and 8 days from the State |
Accompanying a child under 16 | 10 days | 2 days from the employer and 8 days from the State |
Moving | 2 days | By the employer over a period of 3 years with the same employer |
Death of a first-degree relative of the employee or their spouse/partner | 3 days | By the employer |
Death of a second-degree relative of the employee or their spouse/partner | 1 day | By the employer |
Death of a child under 16 | 5 days | By the employer |
The leave is to be taken at the time of the event.