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Internal Market: Rules on annual leave in Iceland not in line with EEA law



The EFTA Surveillance Authority decided yesterday to send a reasoned opinion, a final warning, to Iceland concerning its rules on annual leave.

According to the Working Time Directive[1] workers have a right to a paid annual leave of at least four weeks.  This may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

Iceland provides for this right in the Annual Holiday Act. Moreover, untaken annual leave may be transferred into the next leave year in the event that the worker has been unable, due to long periods of sickness, to take his leave. However, any transferred annual leave days must be taken during the first month of the next annual leave year. If not, the leave days expire. The worker shall however receive his accrued holiday allowance.

The Authority takes the view that national law must provide workers, who for legitimate reasons have not been able to take their annual leave, the right to transfer for up to four weeks of their leave entitlements – guaranteed by the Directive – into the next annual leave year, without being subject to the above restrictions.

A letter of formal notice was issued to Iceland in November 2010.

The Icelandic Government has acknowledged that the above rules do not comply with the Working Time Directive. A proposal to amend the Act was put before the Parliament last April. However, it has not yet been adopted.

The purpose of a reasoned opinion is to give the State in question a last chance to take corrective measures before the Authority decides whether to bring the matter before the EFTA Court. The Icelandic Government has been given two months to take the measures necessary to comply with the reasoned opinion.


For further information, please contact:


Mr. Ingvar Sverrisson
Officer, Internal Market Affairs Directorate
tel. (+32)(0)2 286 18 32


Mr. Trygve Mellvang-Berg
Press and Information Officer
tel. (+32)(0)2 286 18 30
mob. (+32)492 900 187

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