Germany Update: News on vacation entitlement with “Short Term Zero Hours Contracts”

As early as May 2020, we reported about vacation entitlements for short-time work. The main topic was the effects of short-time working on vacation entitlements from the current vacation year. According to the case-law of the European Court of Justice (ECJ), the partial reduction of such vacation entitlements was already permissible at that time. A corresponding reduction option under German vacation law appeared largely likely. With the Düsseldorf Regional Labor Court, a higher-level court in Germany has now confirmed the reduction for the first time.

Facts

The plaintiff has been employed by the defendant as a sales assistant with baking activities since 2011. She works part-time for a three-day week. Converted to part-time work, she is entitled to 14 working days of vacation per year.

As a result of the corona pandemic, the plaintiff was on short-time work from April to December. This existed continuously in June, July, and October 2020. The defendant granted the plaintiff a total of 11.5 working days of vacation in August and September 2020. She takes the view that the claimant’s vacation entitlement for 2020 has already been fully met. According to the plaintiff, however, short-time work has no effect on her vacation entitlements. The short-time work was not carried out at the request of the employee. Furthermore, short-time work is also not free time. The applicant is subject to reporting obligations during short-time work. In addition, she could not plan her free time because the employer had the option of ending short-time work at short notice. With the action, the plaintiff pursued the finding that she is entitled to the full vacation of 14 working days for 2020. The employer sought the dismissal of the complaint. In the absence of an obligation to work during short-time work zero, there would be no vacation entitlement.

Decision

The LAG Düsseldorf confirmed the first instance decision and dismissed the lawsuit. The court ruled in accordance with the case-law of the European Court of Justice, according to which entitlements to vacation during zero short-time work do not arise. As long as there is no obligation to work, there is no entitlement to vacation. The LAG Düsseldorf determined that the German vacation law does not contain any more favorable or different regulations to European law. The annual vacation is to be reduced by 1/12 for each full month of short-time work zero.

The verdict is not yet legally binding. The LAG Düsseldorf has expressly approved the appeal to the Federal Labor Court (BAG).

Advice for practice

The judgment of the LAG Düsseldorf is not particularly surprising against the background of the case-law of the European Court of Justice. However, it brings more legal certainty to the legal situation in Germany. Even if a different decision by the BAG seems unlikely, until the legal situation has been finally clarified, it is recommended that employers include express regulations for reducing vacation entitlements in their employment contracts or company agreements. In terms of content, the decision is to be welcomed in any case. An increased need for relaxation with short-time work zero, which would justify the creation of vacation entitlement, is not evident. If the employer has the option of unilateral termination of short-time work, this does not justify a different decision. Such termination options typically include notice periods. An unreasonable disadvantage of the employee due to the unilateral change option is thus excluded. A need for recreation to justify a vacation from existing reporting obligations is also not convincing. Such secondary obligations under the employment contract are already unsuitable in terms of their scope to justify a vacation entitlement with zero short-time work.

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

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

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