Germany Update: Expiry and limitation of holiday entitlements – employer’s obligations to cooperate

In recent years, employers have already had to adapt to the increasingly employee-friendly case law of the European Court of Justice (ECJ) and the Federal Labour Court (BAG). In particular, the ECJ had already ruled in 2018 (judgment of 6 November 2018 C – 684/16) that the statutory minimum leave of an employee only expires if the employer has complied with his obligations to provide information. To comply with his obligations to provide information, the employer must request the employee in good time to take his leave and also inform him that otherwise, the leave will expire at the end of the reference period or an authorised carry-over period.

In two decisions of 22 September 2022, the ECJ has now confirmed the importance of employers’ obligations to request and provide information:

1. Leave entitlement expires only if the employer has informed the employer in good time

In Case C-120/21, the ECJ clarified that the statutory minimum leave does not become statute-barred even after the expiry of the regular limitation period if the employer has not fulfilled his obligations to cooperate in good time. Without timely notice from the employer, an employee’s statutory holiday entitlement thus remains valid beyond the end of the holiday year or the carry-over period and does not become statute-barred after the expiry of a period of three years (from the end of the calendar year in which the holiday entitlement arose).

2. Expiry of the holiday entitlement in the event of illness only if the employer informs the employer in good time

In a further decision of 22 September 2022 (C-518/20, previously linked to C-727/20), the ECJ also dealt with the tension between the forfeiture of the holiday entitlement due to illness and the maintenance of the entitlement in the event of failure to inform the employer. The ECJ has clarified that the holiday entitlement does not automatically expire after 15 months (from the end of the calendar year when the holiday entitlement arose) if the employee continues to fall ill. In these cases, too, the employer must fulfill his obligations to provide information, enabling his employee to take his leave in good time. Thus, if an employee has acquired an entitlement to paid annual leave during a reference period during which he has worked (i.e., before he has become fully incapacitated or unable to work due to an illness that has persisted since then), this entitlement expires only after 15 months if the employer has complied with his obligation to provide information.

Practical significance:

Employers should take their reporting obligations seriously; otherwise, all open vacation days must be compensated upon the termination of the employment relationship.

Due to the burden of proof on the employer for the fulfillment of the obligation to provide information, it is advisable to inform the employees in writing and to file the letters in the personnel files.

In addition, the recent decisions of the ECJ reinforce the importance of a clear separation of the statutory minimum leave from contractual additional leave. Without this express separation, the requirements for statutory minimum leave regularly also apply to contractual additional leave.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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