Summary
Holiday leave – often referred to as the ‘sixth week of holiday’ – consists of additional paid days off on top of the five weeks provided for under the Holiday Pay Act. These are not covered by the Holiday Pay Act, but are governed by a collective agreement, an employment contract or a staff handbook. Therefore, it is the agreement that determines how they are accrued, taken and what happens to any days not taken. Set out the rules clearly in writing to avoid disputes upon leaving the company.
Short answer
Holidays off – often referred to as the ‘sixth week’s holiday’ – are additional paid days off on top of the five weeks’ holiday provided for under the Holiday Act. They are not part of the Holiday Act, but is governed by an agreement: a collective agreement, the employment contract or the staff handbook. It is therefore the agreement – not the law – that determines how many days are entitled, how they are accrued, when they must be taken, and what happens if they are not taken.
What are holiday leave days?
Holiday leave days are in addition to the five weeks“ holiday to which everyone is entitled under the Holiday Act – which is why they are often referred to as ”the sixth week of holiday’. In the public sector, they are known as the sixth week of holiday or special holiday days. The typical number is five days a year, but this is not a legal requirement: an agreement may also provide for fewer. As they are not regulated by law, the rules of the Annual Leave Act concerning, for example, concurrent leave, do not apply to holiday days off.
Who is entitled to holiday leave?
Employees are only entitled to holiday leave if this has been agreed. Entitlement may arise from:
- a collective agreement, to which the company is bound,
- the individual employment contract, or
- the company’s staff handbook or established practices.
If an employee is not covered by a collective agreement, they are not, in principle, entitled to annual leave – but many companies choose to grant it to everyone anyway. Entitlement is typically only earned after a certain period of service, often 6–9 months.
You set the rules – within the terms of any collective agreement
If you are not covered by a collective agreement, it is up to you to set the rules: how the days are accrued, whether they are allocated on an ongoing basis or in a lump sum, by when they must be taken, and whether they can be carried over. If, on the other hand, you are covered by a collective agreement, it is the agreement that governs this – and it must be followed. A general rule is that holiday days must be taken within the holiday year or calendar year to which they relate.
Salary or flexible spending account
Under many collective agreements, the value of holiday leave days is paid into a free choice account or a special savings scheme, so that the employee does not receive their usual pay on those days but draws on the account instead. Under other arrangements, holiday leave days are granted as specific paid days at the usual rate of pay. Again, this depends on the specific arrangements in place at your organisation.
What happens to unused holiday days?
Here, too, the answer is determined by the agreement. Typically, unused holiday days are either is paid out, transferred to the next period or lapses without compensation. Upon leaving the company, an employee can only be paid for any remaining holiday entitlement if this has been agreed. It is precisely at the point of leaving that most disputes arise – because the parties have different interpretations of what applies to days not covered by statutory provisions.
Important: illness does not entitle you to compensatory leave in lieu of annual leave days
The provisions of the Holiday Act regarding compensatory leave in the event of illness apply only to the five weeks’ annual leave – not to holiday allowance days. If an employee falls ill during a holiday-in-lieu day, that day is, as a general rule, forfeited, unless a collective agreement or contract expressly grants the right to compensation.
Write the rules down
As holiday leave is not underpinned by any statutory basis, a clear, written agreement is your best safeguard against misunderstandings. Set out the rules on accrual, taking leave, carrying over, payment and handling upon leaving the company in the contract or staff handbook, so that both you and your staff know what applies.
We’ll help you with your holiday entitlement
Holiday entitlement is managed differently from one agreement to another – and errors tend to crop up particularly when an employee leaves the company. At Dansk Løn Service, we keep track of accrual, take-up and payment as an integral part of our payroll processing. Read also our Guide to the new Holiday Act, or Contact us.
The rules have been simplified here and depend to a large extent on your collective agreement or contract. Always seek specific guidance if in doubt.