Holiday Planning: How to prepare for your employee’s annual leave

HR Legal | 09.04.2024

by Azets

Effective holiday planning is a crucial task for employers, as it requires balancing the need for ongoing operations with adherence to regulations concerning holidays and notification requirements. In this article, we will therefore guide you through the key elements of the holiday law, so you can navigate the rules of holiday planning and start a positive holiday period for all. 

The holiday law includes specific requirements on how and when you as an employer must inform your employees about their holidays. It is your responsibility to ensure a fair distribution of holiday among your employees, while simultaneously maintaining efficient operations. Ideally, you and your employees will agree on the placement of holidays, but if an agreement cannot be reached, for example because multiple employees want holidays at the same time, it is ultimately you who must decide the placement of holidays. However, it is important that you provide notice according to the applicable rules.

New in the Holiday Law from 2023

On 7 December 2023, the Danish Parliament adopted a number of changes to the Holiday Law, including amendments to the law on the management and administration of accrued holiday funds. Here is a summary of the most important changes: 

  • A reintroduction of the automatic payment of small unclaimed holiday funds after the end of the holiday entitlement period or upon termination of employment 
  • Automatic payment of holiday funds during ongoing employment for employees who take paid holidays and those who take holidays with holiday pay 
  • Payment of holiday funds to employees who have left the company 
  • Payments for less than one holiday day can be processed upon request.

Summary of the Rules in the Holiday Law 

Here is a summary of the holiday law rules that you, as an employer, need to be aware of when planning your employees' holidays: 

  • Employees are still entitled to 5 weeks of annual leave per year 
  • The leave period is 16 months, running from 1 September to 31 December of the following year 
  • You can give employees the right to take leave in advance in exchange for you offsetting it in the subsequent leave qualifying period 
  • If an employee has been employed throughout the previous leave year, until the company's holiday closure, as an employer you must ensure that the employee has the number of hours required for the holiday closure period. Otherwise, you must give the employee advance leave 
  • You must follow the same rules regarding notification 
  • You can continue to stay collectively closed for holidays 
  • The same rules apply for changing agreed leave 
  • Employees are still entitled to 5 weeks of annual leave.

Employees must be notified in time 

As the employer, you decide when leave can be taken. While the operation of your company takes priority, you also have a duty to accommodate the wishes of your employees to the extent of what is possible. For example, this applies to holiday during schools' summer leave period if the employees have children of school age and so forth. 

The following rules apply to notification of leave: 

  • Notification of the main holiday period of 3 weeks must be given at least 3 months before the taking of it in the period from 1 May to 30 September 
  • The remaining 2 weeks of annual leave must be taken before the end of the period for taking holiday, and notification of this must be given at least 1 month in advance. 

It is your duty as an employer to notify your employees well in advance. 

Your employees are entitled to three weeks of continuous main holiday. However, you and your employees may agree that the rule be deviated from, resulting in either a shorter holiday or the scheduling of the main holiday outside the main holiday period. But as a main rule, employees always have the right to take a minimum of 10 consecutive days of holiday.

Deviation from the Holiday Act's notification rules 

Due to force majeure, cf. section 15 of the Holiday Act, employers may disregard the notice rules of the Holiday Act. To determine that force majeure exists, a legal evaluation at the time the company intends to implement leave, must be completed. A change in the law also allows the transfer of more than 5 days if the reason for the non-taking of said leave is due to significant and unforeseeable operational matters as a result of COVID-19.

Collective holiday closing 

If everyone at your company is to take leave collectively, the same notices must continue to be complied with. If the notices are not complied with, your employees are entitled to pay during the holiday closure, without it costing them any leave days. This means that your employees will not spend paid leave days during the period when your company is closed. Therefore, remember to include the period during which your company may be closed for the holidays in the overall holiday planning for your employees.

Employees' right to take leave 

When planning annual leave for your employees, it is important to keep in mind that they always have the right to take 5 weeks of annual leave every year. As a rule, this applies regardless of whether the employee has earned the annual leave or not. This may be the case, for example, if the employee has not been in the labour market for a long time or if the employee has switched jobs, prompting a significant change in salary. 

However, employees are not obliged to take leave if they have not earned a salary or holiday pay. Yet, if your company will close for holidays, as the employer, you can still order these employees to take leave during that period. If the employee has earned leave, you can demand that the leave be taken. 

To be sure of your employees' rights in terms of annual leave, you should check whether the individual employees are covered by a collective agreement or have a local agreement that deviates from the general conditions of the Holiday Act.

Non-taken leave 

Employees have the right to take all leave before 1 May, and correspondingly, you have the opportunity to issue the employee with a notification of this before the deadline occurs. If the employee is unable to take leave in time, you can enter into an agreement that remaining holiday will be taken in subsequent leave years.

Prepare – familiarise yourself with the rules for rescheduling agreed leave 

Even if you plan well in advance, unforeseen situations may arise that require you or your employees to change or postpone leave. For example, this may happen due to illness or the operations of the company. 

As a general rule, agreed leave cannot be changed – even if you can make the change within the required notice period. Planned leave can only be changed in very special situations, such as necessity out of consideration for the company's operations – situations that it was not possible for you to anticipate. However, as an employer, you must compensate employees for financial losses resulting from changing or postponing employees' leave, and you cannot interrupt leave that has already begun. 

A more likely situation where leave may be changed or postponed is if an employee becomes ill before or during leave and therefore may be entitled to compensatory leave. Read more about ilness during holidays here.

Be aware of the applicable laws and regulations for your particular employees 

As an employer, you may have employees hired under very different terms in relation to annual leave. The Holiday Act lays down the foundation for your and your employees' rights regarding the Holiday Act. However, if your employees are subject to a collective agreement, they will often have improved holiday terms, which you are obliged to comply with. In addition to this, your employees may have a local agreement, which you are also obliged to comply with.

Want to know more about annual leave?  

Do you need advice in relation to planning your employees' leave or other HR challenges? Please contact us. We are ready to help. 

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About Azets

Azets is an international group that offers assistance in finance, payroll, consultancy, and business services. With over 6,500 employees across our offices, we assist businesses and organisations of all sectors and sizes in developing their enterprise and realising their business potential.