Loss Of Holiday Entitlement – Higher Hurdles For Employers If They Want To Ensure That Employees Lose The Right To Claim Outstanding Holiday Entitlement At The End Of The Calendar Year

Author:Ms Ulrike E. Bischof and Jan Weißgerber
Profession:Reed Smith (Worldwide)

The German Federal Leave Act (Bundesurlaubsgesetz) provides that employees forfeit the right to claim outstanding holiday entitlement at the end of the calendar year or at the end of a specific transfer period; in other words, all holiday must be granted and taken beforehand. Under previous case law, this did even apply in the event that the employer declined an employee's holiday request even though the request was made in a timely manner.

The Court of Justice of the European Union, however, has taken a different approach. In its ruling of 6 November 2018, the court decided that the regulation according to which employees automatically lose annual leave if they have not submitted a holiday request is not in line with European law. Following this decision, the Federal Labour Court, the highest labour court in Germany, developed its current case law and stated in its ruling of 19 February 2019 that the employer is obliged "to ensure in a concrete and fully transparent manner that the employee is actually in a position to take their paid annual leave by formally requesting them - if necessary - to do so".

Therefore, the loss of annual leave is only permissible if the employer has specifically requested the employee to take annual leave before the end of the year and has informed them that annual leave will otherwise expire at the end of the calendar year or at the end of a specific transfer period. However, the Federal Labour Court did not specify in detail how and when employers should notify their employees. There has been no further case law in...

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