Only those who work are entitled to holiday!

Created by Stephanie Breitenbach | |  Labor Law

Once again holiday entitlement was the subject of two current decisions of the German Federal Labour Court (BAG). On March 19, 2019 the German Federal Labour Court has ruled that in the following cases holiday entitlement can be reduced or that no holiday entitlement exists at all:

In the first case (reference 9 AZR 362/18) a female employee that was continuously on parental leave for almost two complete years (January 1, 2013 to December 15, 2015) has filed a complaint. After she has returned to work, she handed in her notice in March 2016 terminating the employment relationship with effect as per June 30, 2016. Referring to her holiday entitlement of 89.5 days, taking into account her holiday entitlement accumulated during her parental leave, she applied for the holiday to be granted before the termination date. During the notice period part of the holiday entitlement was granted by the employer. However, he informed the employee in writing that he denied granting the holiday entitlement accumulated during the employees’ parental leave.

The German Federal Labour Court has decided in favour of the employer and confirmed that the employer was not entitled to further holiday. According to article 17 sec. 1 sent. 1 German Parental Allowance and Parental Leave Act (BEEG) the employer was entitled to reduce the holiday entitlement accumulated during parental leave. This provision grants the employer the right to reduce the holiday entitlement for every calendar month of the parental leave by one-twelfth. When doing so the employer is obliged to notify the employee evidently that he is exercising his right to reduce the respective holiday entitlement. In the present case the employer informed the employee about the reduction of the respective holiday entitlement in writing. The employer is not obliged to declare this intention before the beginning of parental leave.

The employers’ right of reduction also includes contractual granted additional holiday if the parties have not agreed on a deviating regulation.

In the second case the effects of a sabbatical on the determination of the statutory minimum holiday entitlement were subject of the case (reference 9 AZR 315/17). From September 1, 2013 to August 31, 2015 the employee was absent on unpaid extra holiday. Upon completion of the unpaid extra holiday the employee has demanded the statutory minimum holiday entitlement of 20 days for 2014.

The Federal Labour Court ruled that unpaid extra holiday is not to be taken into account when determining the statutory minimum holiday entitlement. According to article 3 sec. 1 German Federal Holiday Entitlement Act (BUrlG) the annual holiday entitlement of an employee based on a six-day-week is 24 working days. Should the working hours of an employee are spread over more or less than six days per calendar week the substantial working rhythm has to be taken into account when determining the holiday entitlement in order to ensure equivalent holiday durations for all employees. As the employee was not even working for the employer during the sabbatical the determination therefore has to be: zero working days per week are equivalent to zero holidays.

Rightly the German Federal Labour Court (BAG) has repealed the previous contrary jurisdiction. During unpaid extra holiday the contracting parties of an employment have temporarily suspended their mutual contractual obligations (providing of man power against payment of a salary). Due to the lack of working duties there is no right to claim holiday entitlement. Thus the employee was not entitled to paid annual leave for the year 2014.

Practical tip:

In case the employer wants to exercise his right of reduction stipulated in article 17 sec. 1 sent. 1 German Parental Allowance and Parental Leave Act he has to ensure that the respective employee is informed about his intention. It is irrelevant whether the intention is declared in writing or orally. It has to become clear to the employee that the employer is going to exercise his right to reduce the holiday entitlement due to paternity leave.

Against the previous common practice, as of now unpaid special holidays are not to be considered when determining the statutory minimum holiday entitlement. An employee that was granted a whole year of special holiday is not entitled to the statutory minimum holiday for the respective year. In case an employee has been granted special holiday for less than a whole year the statutory minimum holiday entitlement has to be determined according to the legal provisions reduced by the respective period of the special holiday.

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