Vacation does not expire automatically, employer must warn

Created: 12/20/2022, 4:14 p.m

According to the landmark judgment of the Federal Labor Court (9 AZR 266/20), employers must inform their employees of existing holiday entitlements © Andrea Warnecke/dpa-tmn/dpa

Time and again there is a dispute in Germany about whether vacation that has not been taken has expired or become statute-barred.

Now the Federal Labor Court has strengthened the rights of employees.

Erfurt - According to a ruling by the Federal Labor Court, it may be worthwhile for workers and employees to take a look at holiday entitlements from previous years that were believed to be statute-barred.

The highest German labor judges ruled in Erfurt that vacation does not automatically become statute-barred after three years if employers have not complied with their duty to provide information.

In doing so, they implemented a decision of the European Court of Justice (ECJ) from September into German law and thus strengthened employee rights.

Employers must play an active role

According to the landmark judgment of the Federal Labor Court (9 AZR 266/20), employers must inform their employees of existing holiday entitlements and warn that they will expire if no holiday application is made.

If they look on without doing anything, vacation or remaining vacation can still be claimed years later.

A three-year limitation period begins "only at the end of the calendar year in which the employer instructs the employee about his specific vacation entitlement and the expiration periods and the employee still has not taken the vacation of his own free will," the court explained.

The cases

Two cases from North Rhine-Westphalia were negotiated: One involved 101 vacation days not taken due to overwork by a tax clerk from several years.

In the other, 14 days of remaining leave for a hospital employee after their protracted illness, which should expire.

Many lawsuits possible

The opinions of employment lawyers differ as to whether the verdict will lead to a wave of lawsuits, and also as to how far back one can look.

The court left the period open.

He fears "that there will now be numerous lawsuits about long-term employment relationships," said the employer's lawyer at the hearing.

"Many employees are afraid of asserting their rights in ongoing employment relationships," says the lawyer for one plaintiff.

Both cases involved holiday entitlements dating back to 2014.

The meaning of the verdict

The supreme court decision has far-reaching consequences for employees - their position is strengthened in the event of a dispute over vacation that has not been taken.

"This is often the case when changing jobs or when an employment relationship is terminated for another reason," said Bonn employment lawyer Gregor Thüsing.

"Until now, some employers have relied on the three-year statute of limitations - but that no longer applies automatically."

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Rules for expiry and statute of limitations on holidays

In the case of controversies about the statute of limitations on vacation, similar rules now apply that the Federal Labor Court established in 2019 on the question of when vacation expires.

At that time, for the first time, they obligated employers to take action: They had to inform their employees “clearly and in good time” about vacation that was not taken.

With the decisions, the judges closed a loophole in the Federal Holidays Act, which makes no statements on these issues.

Basically, according to the law, employees in Germany are required to take their vacation in the current calendar year if possible.

The European Court of Justice set the course

The Federal Labor Court had submitted the two cases from North Rhine-Westphalia to the European Court of Justice (ECJ) in Luxembourg before making its decision.

He should examine whether European law allows a statute of limitations on vacation entitlement "if the employer has not actually enabled the employee to exercise his vacation entitlement through appropriate requests and instructions".

The decision in September was clear: No, said the court in Luxembourg.

According to the ECJ, leave cannot become statute-barred or expire in the event of a long illness if employers do not comply with their information and cooperation obligations.

This has now been implemented in German law.

"It will not be the very last decision on the right to vacation," said the presiding judge Heinrich Kiel at the hearing.

Vacation after a long illness

According to Thüsing, a labor lawyer, the general rule is that vacation in the event of a long-term illness expires 15 months after the end of the vacation year.

The court confirmed this principle on Tuesday.

However, vacation days are not forfeited if employees have worked at least part of the year in question and their boss violated his information obligations.

Employers have a duty to cooperate and have an interest in vacation not accumulating and paid rest periods being observed.

dpa