In a recent ruling, the Court of Gelderland held that long-term sick employees continue to accrue statutory vacation days throughout the entire period of illness, even after the two-year waiting period and regardless of whether they receive salary or perform work.[1] The court based its decision on European law, setting aside the Dutch Civil Code provision that links vacation accrual to salary entitlement.

The case involved an employee who had been ill since 2019. Due to a wage sanction imposed by the labor office, the employer continued salary payments until March 2024. From that point, the employee received an IVA benefit and was deemed fully and permanently incapacitated for work. The employer refused to terminate the dormant employment contract, prompting the court to dissolve the contract as of 12 August 2025. In line with the Dutch Supreme Court’s Xella-ruling, the employee was awarded a transition payment.[2]

In addition to the termination dispute, the parties disagreed on whether the employee was entitled to vacation pay for the period after salary payments had ceased. The court ruled that the employee continued to accrue vacation days from 1 March 2024 until the end of employment on 12 August 2025, even though no salary was paid and no work was performed.

Under Dutch law (Article 7:634(1) BW), vacation accrual is linked to the right to salary. Since the employee had no salary entitlement after March 2024, Dutch law would suggest no further vacation accrual. However, the court found this incompatible with Article 7(1) of Directive 2003/88/EC and Article 31(2) of the EU Charter of Fundamental Rights.

Referring to the Max Planck-judgment of the European Court of Justice, the court concluded that national law must be set aside if it conflicts with EU law.[3] As a result, the employer was ordered to pay €13,149.74 gross for unused vacation days accrued during the dormant period.

This ruling marks a significant shift from current Dutch practice. If adopted more broadly, it means that employees retain full vacation accrual rights even after the two-year waiting period, if the employment contract remains in place. This applies not only to cases where the employee performs no work at all, but also to situations where the employee continues partial reintegration without any formal change to the employment contract.

[1] Court of Gelderland 12 August 2025, ECLI:NL:RBGEL:2025:7054.

[2] Supreme Court of the Netherlands 8 November 2019, ECLI:NL:HR:2019:1734 (Xella).

[3] European Court of Justice 6 november 2018, ECLI:EU:C:2018:874.