Holiday / Urlaub

December 16, 2022

Work and time off must be in good balance, otherwise performance and health suffer. The weekend is often too short for sufficient regeneration. Happily, one then looks forward to a longer holiday. Employees are entitled to paid recreational leave in each calendar year in which they were employed (§ 1 Federal Paid Leave Act (BUrlG)). This entitlement cannot be waived by contract. But what happens if the desired leave cannot or should not be taken or if you unfortunately fall ill during your leave? Experience has shown that both employees and employers have numerous questions on the subject of leave, some of which we would like to clarify here.

Calculation of holiday entitlement

According to section 3 of BUrlG, every employee is entitled to a statutory minimum leave of 24 working days. The 24 days of leave are calculated on the basis of a working week of 6 working days, i.e. from Monday to Saturday inclusive. If the working week is 5 working days long, the statutory minimum entitlement is 20 days of leave. It depends solely on the working days on which work was done, not on whether these were full- or part-time. If an employee works part-time five days a week, he or she is entitled to the same number of holiday days as full-time colleagues. Employees with severe disabilities are entitled to additional leave under section 208 of Book IX of the Social Code.

Statutory holiday entitlement (24) x individual working days per week / working days per week (6)

If a new employment relationship is started, the employee is only entitled to full holiday entitlement after 6 months (§ 4 BurlG). However, the employee may claim part of his leave before the end of these 6 months, as he accumulates one twelfth of his annual leave with each month (§ 5 I BUrlG). If the employee leaves the enterprise before the end of the 6 months, he is entitled to one twelfth of his annual leave for each full month of employment (§ 5 I b BUrlG).

Company entitlement exceeds statutory minimum entitlement

If the leave entitlement granted by the enterprise is higher than the statutory minimum entitlement, the formula is modified.

Company holiday entitlement x individual working days per week / company-regulated working days per week

If an employee works 5 days a week and the company grants 30 days of leave per year on a working week of 5 working days, the result is a leave entitlement of 30 days. If the number of days the employee works is irregular, i.e. one, two or three days per week, the holiday entitlement is not calculated on the regular number of working days per week, but rather on the whole year. If, for example, an employee in a mini-job works 100 days a year on irregular working days per week and the employer grants him the statutory holiday entitlement, he is entitled to 8 days of holiday per year.

Company or statutory holiday entitlement (24) x individual working days per year (100) / company or statutory annual working days (312)

Holiday entitlement during parental leave

Holiday entitlement does not automatically cease when parental leave is taken. Nevertheless, the employer has the right (since the Federal Labour Court (BAG) ruling of 19 March 2019, ref.: 9 AZR 362/18) to reduce the annual holiday entitlement by one-twelfth for each full calendar month of parental leave pursuant to section 17(1) sentence 1 of the Federal Parental Allowance and Parental Leave Act (BEEG ) If a full year of parental leave is taken, the entire annual leave may be cancelled. The employer can thus prevent any claims for compensation for leave not taken during parental leave. However, if part-time work is taken during parental leave, section 17(1) sentence 2 BEEG does not apply, so that the leave entitlement continues to exist. If parental leave is started or ended in a current calendar month, according to the wording of section 17, subsection 1, BEEG, this is not a full calendar month, so that the employer cannot reduce the leave entitlement for such months either. If there is still leave before the start of parental leave, the employer must grant it after the parental leave in the current or next leave year in accordance with section 17(2) of the German Civil Code (BGB). It is therefore not necessary to carry over any leave to the next year; the leave is automatically carried over by law.

Holiday planning

According to § 7 I BUrlG, the employee's holiday wishes must be taken into account when determining the time of the holiday. The employer may only refuse leave if urgent operational concerns or the holiday wishes of other employees, which deserve priority precisely from a social point of view, conflict with this. Once leave has been granted, it cannot be revoked unless the employee is open to postponing his or her leave. Revocation means that the employee cannot take the leave for the time being. It is possible to go to the Labour Court and ask for a declaration that the revocation was not lawful. If the employee does not take legal action after a revocation and takes the leave anyway, this is equivalent to taking leave on one's own initiative. This can have unfavourable legal consequences. Self-leave may constitute a breach of the employment contract, which in case of doubt may justify termination without notice. Secondly, the employee is not entitled to the remuneration contractually owed during the period of self-leave. The revocation of a previously approved leave is unlawful, but the employee is not entitled to enforce it on his own authority. The employer also has recourse to the labour courts with the aim of enforcing the refraining from breaching the contract. If there are urgent operational reasons, the employer can also order leave under closure of the company pursuant to section 7 I BUrlG. Operational reasons are assumed if a regular continuation of daily work is not possible. If the number of orders decreases to such an extent that the company is endangered or if the employer is absent and his presence is imperative for the performance of work, such as in the case of a registered doctor in a practice, this may be sufficient as a business reason. However, company holidays must be announced with a clear lead time. A precise period is not regulated by law, but a lead time of at least 6 months is regularly considered appropriate. If there is a works council, it has a right of co-determination in the decision on company holidays according to section 87 I no. 5 Works Constitution Act (BetrVG). Company holidays may not include the entire annual holiday. According to a 1981 decision of the Federal Labour Court, employees must have at least 40 per cent of their annual leave at their individual disposal (Ref.: 1 ABR 79/79).

Forfeiture of leave

According to section 7, paragraph 3, sentences 1 and 2 of the Federal Leave Act (BUrlG), leave must be taken in the calendar year in which it accrues. Otherwise it is forfeited. However, according to the ECJ, this national provision must be interpreted in conformity with European law to the effect that holiday which has not been taken does not automatically expire at the end of the year, but only when the employer has requested the employee to take his holiday in the current year and it has been pointed out that the holiday entitlement will otherwise expire (ECJ, 06.11.2018, C-684/16-Shimizu, para.41; ECJ 06.11.2018, C-619/16 - Kreuziger). The holiday entitlement cannot therefore simply lapse due to the passage of time. However, it can be carried over to the first three months of the following year pursuant to section 7 (3) sentence 3 BUrlG if justified by urgent operational reasons or urgent personal reasons. Important personal reasons include, for example, illness or serious family circumstances. On the part of the company, important reasons are, for example, the illness of many employees or time-bound orders, for which reason one may be required to take one's leave in the following year. The employer is free to be generous with the transfer of leave to the first three months of the following year and to agree accordingly in the employment contract. However, it is recommended that the expiry of leave be effectively regulated, as this also provides an incentive to take leave promptly. On the one hand, this is necessary for the required rest, on the other hand, the accumulation of leave should be avoided, as this usually leads to the fact that the leave cannot effectively be taken. The need for recuperation is even so urgent to the legislator that, according to section 8 BUrlG, the employee may not engage in gainful employment that contradicts the purpose of the holiday.

Illness during leave

The recreational leave granted under section 1 BUrlG is intended solely for the purpose of relaxation and regeneration. Therefore, section 9 BUrlG provides that if an employee falls ill during the leave - upon proof of a medical certificate - the days of illness shall not be counted towards the days of leave. This does not mean, however, that the leave is automatically extended backwards by the number of sick days. The leave ends at the originally agreed time. However, the days of leave not taken due to illness remain as holiday entitlement. But, if a person falls ill while working overtime, he or she is not entitled to a replacement. If the employee is incapacitated for work during this time, the entitlement to continued payment of wages during the leave pursuant to sections 1, 11 BUrlG is converted into an entitlement to continued payment of wages pursuant to section 3 EFZG. If the employee falls ill over a longer period of time, i.e. months, if not years, the days of leave do not automatically expire. Since a ruling by the Federal Labour Court in 2012 (BAG, ref.: 9 AZR 353/10), employees have 15 months after the end of a holiday year to assert their holiday entitlement. The prerequisite is that they are no longer on sick leave during the period in which they claim their leave.

Holiday compensation

As a matter of principle, leave must always be actually taken, as this is the only way to achieve the desired rest. In exceptional cases, if the leave simply cannot be taken, compensation for the leave can be considered. This is often the case at the end of an employment relationship because the existing holiday entitlement can no longer be granted in full or in part for time reasons. Then the employee is entitled to financial compensation for the days of leave not taken.

Our services:

• Review of forfeiture clauses

• Drafting individual employment contracts

• Review of existing employment contracts

• Advice on labour law structuring issues