As the end of the year draws near, a very important issue arises at employers: when can holidays not taken in the current year be brought forward to the following year? Holidays due to employees comprise two parts: basic leave and supplementary leave. Basic leave is 20 working days, while supplementary leave may be up to 10 working days a year depending on the employee’s age.
As a general rule, the Labour Code sets forth that holidays should be issued in the year when they are due. An important rule in terms of granting holiday entitlements is that the employee has to be informed of the dates no later than 15 days prior to the start of the holiday. For lack of an alternative agreement, granting holiday entitlements should relieve employees from their work and obligation to be available for at least 14 consecutive days on one occasion every calendar year.
Granting holiday entitlements after the current year
Employers may deviate from granting holiday entitlements in the current year in the following cases:
- If the employment started on 1 October or afterwards, the employer can grant holiday entitlements until 31 March of the year following the due dates.
- If granting holiday entitlements comes up against a problem for reasons attributable to the employee, then the employer must start granting the holiday within 60 days of the problem being eliminated. Granting holiday entitlements is not permitted if the employee is exempt from work for any reason. Such reasons include, for example, a lengthy incapacity to work owing to illness, unpaid leave (during which the employee receives child care allowance (GYED) for instance) or any other unavoidable hindrance affecting the employee.
- The employer can grant 5 days of the current-year holiday entitlement in the following year. Holiday entitlements should be considered granted in the year when due if use of the holiday starts in the year when due, and the portion granted in the following year does not exceed 5 working days without interruption.
- Supplementary leave based on age can be granted by the employer until the end of the year following the year when due, if the two parties agree in writing.
- No more than one quarter of the holiday entitlement can be granted by 31 March of the year following the year when due, if permitted by the collective agreement due to an exceptionally important economic interest of the employer or for reasons affecting operations directly and significantly. These reasons include accidents, natural disasters or serious damage, as well as the prevention or elimination of threats to life, health or bodily injury. An exceptionally important economic reason for example is if the company would not be able to remain solvent if the holiday entitlement is granted, or if it would have to terminate the employee’s employment to maintain its solvency.
What counts as a violation and what are the consequences?
The employer cannot refer to its own work organisation when failing to grant holiday entitlements. Granting holiday entitlements after the current year violates the law if this does not take place for the aforementioned reasons. As a general rule, holidays cannot be compensated financially except when the employee’s employment is terminated. In this case, outstanding holidays must be compensated for in cash on a pro rata basis.
It is important for employers to be aware of these rules because the labour authorities check compliance with holiday entitlement provisions and the granting of holidays very strictly. The most serious violations of law in respect of granting holiday entitlements may lead to an employment fine which, as a general rule, can range from HUF 30,000 (approx. EUR 100) to HUF 10 million (approx. EUR 32,200).