The German Federal Vacation Act Bundesurlaubsgesetz provides that vacation has to be approved and taken in the current calendar year. The employee is meant to actually take the vacation and enjoy a rest. Case-law accordingly held that any untaken vacation was generally forfeited at the end of the calendar year unless there were statutory reasons for a transfer to the next calendar year. If, in the event of such transfer reason, the vacation was not taken in the subsequent first three calendar months, it expired without any obligation on the part of the employer to pay compensation in lieu.
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In its judgment of 19 February file no. With this judgment, the BAG implemented the jurisdiction of the European Court of Justice which means that the expiration regulation under section 7 para. The employer satisfies the leave entitlements of the employee by exempting the employee from its duty to perform work and by granting the employee leave.
The regulation under section 7 para. The regulations under sentences 2 and 3 under section 7 para. The BUrlG, however, is superimposed by the leave provisions under Union law under article 7 para. In specific cases in the past years ECJ had already identified the incompatibility of the expiration regulation under section 7 para.
However, the expiration without replacement of leave entitlements pursuant to section 7 para. Tetsuji Shimizu, as a scientist in the time period 1 August to 31 December By letter dated 23 October the employer asked the employee to take his leave before termination of his employment.
However, the employer did not oblige the employee to take the leave by a date fixed by the employer. Subsequently, the employee took two days off. After termination of the employment, the employee demanded to be compensated for the leave not taken of 51 working days from and by being paid a gross salary amount totaling to around EUR 12, He had not applied for such leave during his employment.
Currently, there is only the press release of the BAG concerning the judgment of 19 February , while the publication of the judgment is yet to be submitted. As a reason for the judgment the press release indicates that the senate developed its jurisprudence with this decision and implemented the requirements by the ECJ within the framework of the preliminary judgment in this case which the BAG itself gathered ECJ, judgment of 6 November , file no.
In the course of the preliminary judgment the ECJ decided on the question submitted by the BAG in this case on the interpretation of European law that the expiration regulation pursuant to section 7 para. Referring to its present case law, the ECJ found that the right to paid annual leave was affected in its very substance if acquired rights to paid annual leave of an employee or compensation for leave not taken correlating with the termination of the employment expired, without granting the employee the possibility to exercise such right.
Without first examining if the employee was in fact put in the position to benefit from his right, the automatic expiration intended under section 7 para. Even the creation of an incentive to refrain from taking a leave is incompatible with the objectives of the EU Leave Directive.
For this purpose, the employer should request the employee — if necessary formally — to apply for leave and inform the employee in a clear and timely manner that the leave would otherwise expire at the end of the period considered or at the end of a permitted extension period. The ECJ adds restrictively that the employer would not have to force the employee to actually exercise his right to paid annual leave.
The burden of demonstration and proof that the respective employee had been informed in the manner required by the ECJ shall solely be borne by the employer.
However, if the employer was not able to provide such evidence, an expiration of the right to annual leave would infringe the EU Leave Directive. But if the employer was able to provide the evidence for which it carries the burden of proof and if this resulted in the employee waiving his or her right to take leave voluntarily and fully aware of the resulting consequences, the EU Leave Guideline would not conflict with the application of section 7 para.
Whether the employer complied with the duties set by the ECJ to sufficiently request its employee to take his annual leave and at the same time pointed out the consequences which would otherwise occur, is a factual issue which still has to be determined. This can only take place at the level of the last instance of facts in this case the Regional Labor Court , so that the BAG referred back the case with the request that the Regional Labor Court should clarify if the employer did comply with its obligations.
There are extensive consequences for the practice. According to the decision of the BAG, an expiry of leave pursuant to section 7 para. This obligation of the employer does not extend to the point that the employer must force its employees to take leave, but it places high demands on the employers. In view of the burden on the employer, in the event of a dispute, to prove that the employer has complied with its obligation to inform each of its employees in sufficient form and in good time, it is essential that employees are formally informed.
It is therefore recommended that, as soon as possible for the calendar year and at the beginning of each subsequent calendar year, employees should be formally requested to apply for and take their annual leave and any leave carried over from the previous calendar year, and that employees should be expressly informed at the same time that the leave will otherwise expire. If employees fail to comply with this, the employee should be reminded of this fact once again in the course of the calendar year.
We can gladly provide you with the corresponding drafts. Print Download PDF. Arne Hansen, LL. March Previous legal situation pursuant to section 7 Federal Holiday Benefits Act The employer satisfies the leave entitlements of the employee by exempting the employee from its duty to perform work and by granting the employee leave.
Reasons for the judgment Currently, there is only the press release of the BAG concerning the judgment of 19 February , while the publication of the judgment is yet to be submitted. Referral back from the BAG to the Regional Labor Court Whether the employer complied with the duties set by the ECJ to sufficiently request its employee to take his annual leave and at the same time pointed out the consequences which would otherwise occur, is a factual issue which still has to be determined.
Consequences for the practice There are extensive consequences for the practice. We are here for you. Show detailed profile. Claudius Mann Partner, Attorney-at-Law.
EUR-Lex Access to European Union law
Pursuant to this Act, employees who work six days per week are entitled to an annual minimum paid vacation of 24 working days. Employees with a five-day working week are entitled to a pro-rata vacation of 20 working days. Nevertheless, most companies grant a higher vacation entitlement, which normally varies between 25 and 30 days per year. Employees can claim their full vacation entitlement if the employment relationship has existed for a minimum of six months during the applicable vacation year. Generally, any untaken holiday entitlement is forfeited at the end of each vacation year. However, if any part of the statutory minimum holiday entitlement could not be claimed for business or sickness reasons, the employee is entitled to use this part during the first three months of the next calendar year i. If there is any remaining holiday entitlement at the end of the employment relationship, the employer has to compensate the employee in cash.
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