Each employee must enjoy a certain number of annual leave days. If at the time of termination of the employment contract an employee did not benefit from the number of annual leave days he had in his contract, then the employee will receive a payment for the number of leave days he didn’t take. The regulations regarding the payments for untaken leave days are based on EC 2003/88 / Directive which covers various aspects of organizing working time.

According to art.7 par. (2) of this directive, an employee may receive a payment if he didn’t take his annual leave only when the contract between the employee and the employer ends. This provision was also included in the Romanian Labor Code. If an employee sues an employer over their refusal to pay untaken annual leave, the court must consider two issues in order to check if the case falls under the above Directive: the number of leave days the employee was entitled to and the termination of the employment contract.

Because not taking leave days happens for different reasons, the European Union suggested that in addition to the aspects which verify the right to receive financial compensation, it is necessary for the court to check on the efforts the employer has made to give their employees the opportunity to take their leave. If the employer has made every effort and proves this, and the employee has knowingly refused to benefit from the holidays, then normally the employee does not benefit from any financial compensation.

This is an approach that aims to make financial compensation just an exception in those situations where for various reasons the annual leave cannot be taken by the employee. This approach avoids making the compensation a frequent choice among employees because of the financial motivation, as opposed to actually taking their leave.

The European Union Court of Justice has not definitively ruled on this matter yet. But when it does, the Romanian labor law will need to adapt to these decisions for sure.