On 27 April 2015, the EU commission stated that the Danish Holiday Act was not in compliance with the EU Working Time Directive. Accordingly, the Danish government now has two month to explain to the Commission how they will adjust the rules. If the government does not fulfil this requirement, Denmark risks action being taken against it at the European Court of Justice.
The Commission warned Denmark in September 2014 that there was a problem with the Danish Holiday Act in relation to in particular the EU Working Time Directive. Denmark responded to the Commission in November 2014. However, the Commission maintains that they Danish holiday rules are not in compliance with EU legislation.
According to the EU's Holiday Directive, the Member States must ensure that all employees have the right to at least 4 weeks holiday with pay per year. The present Danish Holiday Act does not fulfill this requirement according to the Commission, as employees who are newly educated or employees who come from other EU countries and who have not "earned" any holidays when they start, risk that they will not have any paid holidays for the first year and a half. The Commission states that the Danish rules "are not in compliance with EU's fundamental social rights regarding a minimum goal for yearly paid holiday".
According to the Commission, an employee is entitled to paid holiday the first year the employee works. However, according to the present Danish holiday rules an employee is only entitled to paid holiday in the holiday year following the first qualifying year and furthermore the employee is only entitled to fully paid holiday (5 weeks) if he/she has worked the entire qualifying year before.
Hence, according to the Commission a holiday only "gets its full positive effect" if the holiday is taken within the year it is earned. Such a "model" will mean a significant change of the Danish holiday system. Today the rules are put together so that holiday is earned in the qualifying year which is from January to December (calendar year) and taken from the following 1 May to 30 April the year after (holiday year).
A change in the holiday system will grant the employee (fortifies) rights but on the other hand the employers will risk losing billions in liquidity. As it stands, it seems like the Danish government will not back down straight. Minister for Employment, Henrik Dam Kristensen has stated that he does not agree with the Commission but will now enter into a dialogue with the Commission.
Bird & Bird will follow the development in the case.