Well, in American English it would nearly always be said 'on vacation,' and whenever we hear British English dialogue on TV or in movies it's always 'on holiday,' which sounds so much more spontaneous and fun. :)
I've never heard 'on holidays' before. Just out of curiosity, is it the norm somewhere in the English-speaking world?
I'm from nothern England and I have heard the phrase used before, though it's quite colloquial. To me "on holidays" would suggest that they were on some kind of extended break from school or work (i.e. "Dad's on holidays until the 15th") as opposed to going on a literal vacation abroad, which would just be 'holiday'. So whether or not it should be accepted as a translation really depends on the context of the Swedish sentence. :)