Europe's top court has dealt a blow to companies paying workers for their holiday entitlement instead of them taking their leave by ruling the practice was against European Union law.
The Dutch Trade Union Federation had argued that companies should not be allowed to pay workers for holidays carried over into the next year, if those holidays were part of an annual minimum requirement of four weeks off.
The European Court of Justice (ECJ) said in a statement that it upheld the unions' view.
Under Dutch law, workers can sell their leave to employers only if it is over and above a four weeks annual minimum. But the Dutch government has interpreted the rules as allowing workers to sell back to employers any leftover leave from their minimum four weeks holiday during the following year.
The court said it agreed with the unions that selling such leave was in direct breach of the EU's working time directive on rules for working conditions and holidays in the bloc.
The ruling comes two weeks after a previous ECJ ruling, based on the same directive, that prohibited companies from adding pay for annual leave to workers' hourly or daily rate instead of paying it in respect of a period of leave taken.
Today's ruling will be welcomed by unions who say they are campaigning for the benefit of workers but is likely to be criticised by employers who see such measures as a hindrance just as Europe is facing growing global competition.