On 5 February 2026, the subdistrict court in Dordrecht (ECLI:NL:RBROT:2026:1215) ruled that an employee who has been unfit for work for more than two years and has what is known as a ‘dormant’ employment contract no longer accrues new annual leave days. This ruling is therefore consistent with previous case law from, amongst others, the subdistrict courts in Groningen and Rotterdam. The decision differs from an earlier ruling by the Arnhem Subdistrict Court in 2025, which had held that holiday entitlement could indeed be accrued during a dormant employment contract. There now appears to be a consistent line in case law, and we await a similar ruling from a Court of Appeal.
What were the facts of this case?
The employee in this case had been employed by his employer since April 2017. In October 2022, he became unable to work and has not performed any work since then. Following the expiry of the 104-week qualifying period, he began receiving an IVA benefit on 9 October 2024. From that point onwards, the employment relationship was deemed to be ‘dormant’: the employment contract remained formally in force, but the core obligations – to work and to pay wages – were no longer being fulfilled.
The employee repeatedly asked his employer to cooperate in terminating the employment contract with the award of a transition payment (the so-called ‘Xella route’). When the employer refused, the employee took the matter to the subdistrict court. He sought the termination of the employment contract, payment of compensation equivalent to the transition allowance, and payment of outstanding holiday entitlement and holiday pay.
Termination and compensation
The subdistrict court ruled that the employer had no reasonable interest in continuing the dormant employment contract. In accordance with the principles of good employment practice, the employer should have cooperated in terminating it. The employment contract was therefore terminated and the employee was awarded compensation amounting to the net equivalent of the transition payment.
Accumulation and payment of holiday entitlement
The dispute centred in particular on the question of whether the employee had accrued any further holiday entitlement after the end of the waiting period. In total, the employee claimed 312 hours of unused holiday. Of these, 152 hours had been accrued before the end of the waiting period and 160 hours afterwards, i.e. during the dormant employment contract.
The subdistrict court judge drew a clear distinction here. The annual leave days accrued up to the end of the waiting period had to be paid out. For the period thereafter, however, the subdistrict court judge ruled that no annual leave had been accrued.
Section 7:634(1) of the Dutch Civil Code stipulates that annual leave is accrued only during periods in which the employee is entitled to wages. The employee argued that this provision should not apply as it conflicted with European legislation, in particular Article 31(2) of the EU Charter and Directive 2003/88/EC. The employee argued that the right to annual paid leave is a fundamental right under European law, which in principle continues to exist even during illness. He therefore contended that Article 7:634(1) of the Dutch Civil Code should not apply in this case and that holiday entitlement had continued to accrue even during the dormant employment relationship.
The subdistrict court did not accept this argument. Referring to case law of the Court of Justice of the European Union, the subdistrict court held that specific circumstances arise in the case of a dormant employment contract which justify a derogation from the fundamental right to annual paid leave.
No recovery function and no double entitlement
According to the subdistrict court, annual leave loses its core function in the case of a dormant employment contract. Annual leave is intended to allow an employee to recover from work performed. An employee with a dormant employment contract no longer performs any work and is not subject to any reintegration obligations. There is therefore no work from which to recover (the so-called ‘recovery function’).
Another factor is that, after two years of illness, the employee is entitled to a benefit (in this case an IVA benefit, part of the WIA), which also takes into account an entitlement to paid annual leave. If holiday entitlement were also to accrue with the employer during the same period, this would amount to a double entitlement. For this reason, the subdistrict court judge considers Article 7:634(1) of the Dutch Civil Code not to be in breach of European law.
The conclusion is that, after the end of the qualifying period, no further holiday entitlement is accrued and that the employee is not entitled to payment for these hours upon termination of employment.
Implications for practice
This ruling is in line with previous rulings by the subdistrict courts in Groningen and Rotterdam, which held that no further annual leave is accrued after two years of illness whilst on a dormant employment contract. This appears to indicate a consistent line of case law, although vigilance remains essential.
Would you like to know more or do you have any questions on this subject? Our employment law solicitors are on hand to advise you! Please contact Richard Ouwerling and Jamie Janssen, employment law solicitors at LVH Advocaten.
