The Netherlands: Holiday Accrual During Dormant Employment?

Why It Matters

The ruling will determine employers' financial exposure during lengthy termination processes and clarify employee rights under European labor standards.

Key Takeaways

• Gelderland court says sick workers accrue full holidays during dormancy
• Noord‑Nederland court rejects paid holiday claims for dormant employees
• Supreme Court to answer whether holidays accrue at wage value
• Employers risk higher costs if holidays accrue during termination wait
• Public comments accepted until 5 June 2026, shaping future case law

Pulse Analysis

The concept of "dormant employment" in the Netherlands arises when an employee has been unable to work for 104 weeks and the employer’s salary obligation ends. While Dutch law traditionally ties holiday accrual to the right to receive wages, European Union jurisprudence – notably the CJEU rulings in cases C‑762/18 and C‑37/19 – mandates that all workers, including those on long‑term sick leave, continue to build up paid leave. This creates a tension between national statutes and supra‑national labor protections, prompting courts to interpret how holiday rights survive when salary payments cease.

Recent district‑court decisions illustrate the legal uncertainty. The Gelderland District Court in August 2025 ruled that employees on prolonged incapacity must accrue full holiday hours throughout the dormant period, echoing EU directives. Conversely, the Noord‑Nederland District Court later held that without a salary entitlement, a claim for paid holidays “misses the mark.” These divergent rulings have left employers uncertain about liability and have sparked scholarly debate, as the financial impact of accruing paid leave can be significant when combined with the mandatory four‑to‑six‑week UWV dismissal permit and subsequent notice periods.

To settle the matter, the Rotterdam District Court has escalated a preliminary question to the Supreme Court, asking whether an incapacitated employee accrues holidays at wage value during dormant employment. The Supreme Court’s response, expected after the comment deadline of 5 June 2026, will provide definitive guidance for Dutch employers and shape future case law across the EU. Companies should monitor the proceedings closely and consider interim risk‑mitigation strategies, such as reviewing termination timelines and potential holiday accrual liabilities, to avoid unexpected cost spikes.