A discretionary arrangement for extra-statutory vacation days is permitted

Yes, as an employer, you may agree on your own, deviating arrangement for extra-statutory vacation days. Extra-statutory vacation days — anything above the statutory minimum of four times the agreed working hours per week — do not fall under European minimum protection, but under Dutch law and your own agreements. The European Court of Justice confirmed this in its judgment of 19 November 2019 (the TSN/Fimlab case). You may therefore determine yourself whether these extra days expire, are paid out, carried forward, or accrue during illness — provided that an applicable collective labour agreement does not prescribe otherwise.

What are statutory and non-statutory holidays?

Dutch holiday law recognizes two types of holiday days, and the distinction is crucial for what you, as an employer, may and may not arrange.

• Statutory holidays. Every employee is entitled to at least four times the number of agreed working days per week per year. For a full-time job of five days, this amounts to 20 statutory holidays per year. This minimum is legally protected, and you may not fall below it.
• Extra-statutory vacation days. Anything you grant in addition to the statutory minimum — for example, the 5 extra days that bring many employers to 25 vacation days — are extra-statutory days. You are not obliged to grant these; you grant them via the employment contract, a personnel policy, or a collective labor agreement.

Because days off exceeding the statutory minimum are voluntary, you also have much more freedom to attach different conditions to them. This difference impacts virtually every question you ask yourself as an employer: when they expire, whether they are paid out, and whether they continue during illness.

Statutory versus non-statutory days in brief

• Number: the statutory minimum is four weeks per year; for anything above the statutory minimum, you determine this yourself (or the collective labor agreement).
• Expiration/statute of limitations: statutory days generally expire six months after the year of accrual; non-statutory days only become time-barred after several years.
• Payment during employment: statutory days in principle not, non-statutory days yes (by mutual agreement).
• Own deviating arrangements: very limited for statutory days, widely possible for non-statutory days.

Why the rules for days off exceeding the statutory minimum are more flexible

The background lies in European law. The right to paid holiday is a fundamental right, enshrined in the EU Charter of Fundamental Rights. The European Working Time Directive therefore guarantees a minimum right to holiday of four weeks per year. The European Court of Justice previously ruled that an employee who was unable to take their statutory holiday days due to illness must, in principle, be able to carry them over.

For a long time, the big question was: do those same protective rules also apply to the extra days above that minimum of four weeks?

The judgment of 19 November 2019 (TSN/Fimlab)

This became a critical issue in the case of a Finnish laboratory assistant. She was unable to take her CLA vacation days due to illness. Finnish law permitted the carry-over of statutory days in the event of illness, but prohibited it for days exceeding the statutory minimum. The trade union considered this to be in violation of the EU Charter and brought the case before the European Court of Justice.

The Court ruled that the European Minimum Directive only guarantees the minimum entitlement of four weeks. If Member States or collective labour parties grant additional holiday days above that minimum, they may determine the conditions for doing so themselves. Therefore, extra-statutory holidays do not fall under EU law, but under national law. The protective rules developed by the Court regarding statutory days in the event of illness do not need to be followed for extra-statutory days. Nor does the EU Charter prohibit such a deviating national arrangement.

What agreements are you allowed to make regarding extra-statutory vacation days?

This ruling leaves you with a great deal of freedom as an employer. It is best to record the agreements in writing, for example in the employment contract or in an employee handbook. Common agreements include:

• No carry-over of extra-statutory days. You may agree that unused extra-statutory days expire at the end of the year, instead of being carried over to the next year.
• Exchanging or offsetting extra-statutory days. Consider offsetting extra-statutory days against sick days, within legal limits.
• No or limited accrual during illness. Unlike statutory days, the law does not require that extra-statutory days be accrued during illness. You are therefore free to make your own — and potentially more favorable — arrangements regarding this.
• Negative leave balance upon termination of employment. You can make agreements regarding a negative above-statutory leave balance upon termination of employment.

Note the difference between lapse and prescription

The distinction also affects the period during which days remain valid:

• Statutory days have a short expiry period: in principle, they expire six months after the calendar year in which they were accrued, unless the employee was reasonably unable to take them.
• Extra-statutory days have a longer limitation period of several years. Additional agreements regarding this may be included in the employment contract or collective labour agreement.

Important: according to settled European case law, as an employer you must inform your employees in a timely manner about their outstanding days and encourage them to take them. If you fail to do so, days that would otherwise expire or become time-barred may remain outstanding — this duty to inform and care applies to both statutory and non-statutory days. An active leave policy is therefore not an unnecessary luxury, but prevents old balances from accumulating.

Watch out for an applicable collective labor agreement

Dutch law gives you a lot of leeway, but a mandatory collective labour agreement (CLA) can limit that leeway. For example, a CLA can set a maximum on the number of days exceeding the statutory minimum, provide rules regarding their calculation, or offer broader protection than the law. Therefore, always check whether a CLA applies to your company before introducing your own arrangement. An agreement that conflicts with a mandatory CLA provision is invalid.

Get your leave policy in order in 4 steps

1. Take stock. Count for each employee how many statutory and non-statutory days there are and which are outstanding from previous years.
2. Check the collective labour agreement. Determine whether a mandatory collective labour agreement applies and which binding rules it contains regarding leave.
3. Record agreements in writing. Regulate forfeiture, payment, and accrual during illness in the employment contract or the employee handbook.
4. Inform in a timely manner. Actively remind employees of their outstanding days every year, so that expiration and statute of limitations hold up.

Frequently asked questions about extra-statutory vacation days

May extra-statutory vacation days expire?

Yes. Unlike statutory days, as an employer you may agree that extra-statutory vacation days expire at the end of the year or are not carried forward, unless a collective labor agreement stipulates otherwise. However, be sure to clearly document this in writing and inform your employees in a timely manner.

Does a sick employee accrue extra-statutory vacation days?

The law does not prescribe this. In principle, a sick employee continues to accrue statutory days, but for extra-statutory days, you may make your own arrangements, for example, that these are not accrued or are accrued to a limited extent during long-term illness.

Am I allowed to pay out extra-statutory vacation days?

Extra-statutory days may be paid out in cash during employment if the employer and employee agree to this. In principle, this does not apply to statutory days: these are intended for actually taking vacation. At the end of employment, outstanding days (both statutory and extra-statutory) are paid out.

What is the difference between expiration and statute of limitations for vacation days?

Expiration means that a day expires permanently after a short period; this applies to statutory days, in principle six months after the year of accrual. Statute of limitations is a longer period of several years and applies to days exceeding the statutory minimum. In both cases, the period only remains valid if you have informed your employees in a timely manner about their outstanding days.

How many extra statutory vacation days do I have to grant?

None at all. You are only required to provide the statutory minimum: four times the number of agreed working days per week. Anything above that is voluntary and up to you to decide, unless a collective labor agreement prescribes a minimum.

Does the regulation also apply if a collective labour agreement is applicable?

Not without further ado. A mandatory collective labour agreement may contain binding rules regarding statutory and extra-statutory holidays that take precedence over your own agreements. Therefore, always check the applicable collective labour agreement first before introducing a deviating arrangement.

Want to arrange extra-statutory vacation days in a foolproof way?

Do you want to draft a clear, legally sound leave policy or adjust your employment terms accordingly? Our employment know the law as well as the pitfalls of collective labour agreements and ensure that your policy is correct. Would you prefer to discuss a specific situation first? View our legal assistance for entrepreneurs or schedule a no-obligation intake meeting directly for free initial advice.