In its judgment of 19 February file no. With this judgment, the BAG implemented the jurisdiction of the European Court of Justice which means that the expiration regulation under section 7 para. The employer satisfies the leave entitlements of the employee by exempting the employee from its duty to perform work and by granting the employee leave. The regulation under section 7 para. The regulations under sentences 2 and 3 under section 7 para. The BUrlG, however, is superimposed by the leave provisions under Union law under article 7 para.
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The German Federal Vacation Act Bundesurlaubsgesetz provides that vacation has to be approved and taken in the current calendar year. The employee is meant to actually take the vacation and enjoy a rest. Case-law accordingly held that any untaken vacation was generally forfeited at the end of the calendar year unless there were statutory reasons for a transfer to the next calendar year.
If, in the event of such transfer reason, the vacation was not taken in the subsequent first three calendar months, it expired without any obligation on the part of the employer to pay compensation in lieu. The ECJ has now held that such automatic forfeiture of vacation entitlements or vacation compensation entitlements without prior notification of the employee contravenes EU law.
This requires employers to take action. The plaintiff worked for the defendant until 31 December By letter of 23 October the defendant asked the plaintiff to take his vacation entitlement by the end of the employment without placing an obligation on him to take the vacation by a certain date set by the defendant. The defendant refused. The previous courts allowed the claim. The Federal Labour Court Bundesarbeitsgericht BAG held that, in principle, the vacation claimed had been forfeited in accordance with the Federal Vacation Act because the vacation had not been taken within the vacation year.
If the employee was able to take the vacation by the end of the vacation year, as was the case here, the entitlement lapsed. The BAG went on to say that there was no obligation on the part of the employer either to require the employee to take vacation. No compensation was payable in lieu of any lapsed vacation entitlements.
The ECJ, by contrast, held that such automatic forfeiture of vacation entitlements or vacation compensation entitlements without prior notification of the employee contravenes EU law. The court argued that the employee was the weaker party in the employment relationship. While there was no obligation on the part of the employer to require the employee to take vacation, the employer was however obliged to ensure — specifically and completely transparently — that the employee was actually in a position to take his paid annual leave by requesting — formally, if necessary — that he do so.
The ECJ held that a loss of the vacation entitlement was only justified if the employee has waived his right to take his vacation voluntarily and in full knowledge of the consequences that may ensue. Following the ruling, companies are well advised to remind employees no later than at the beginning of November of each vacation year to take their remaining vacation and to expressly point out that any outstanding vacation entitlement is forfeited otherwise.
One option is to include a provision to that end in the employment contract, although it is rather unlikely that this alone will do. Issuing an additional annual reminder to all employees and including a corresponding note in the employee handbook or the vacation policy, if any, are good additional options. As so often, documentation is key here because in case of a dispute the employer will have to prove that the reminder has been received by the employee.
The Case The plaintiff worked for the defendant until 31 December Send Print Report. Orrick - Global Employment Law Group. Employee Rights. Employment Litigation. Employment Policies. Vacation Leave. Civil Procedure. International Trade. Orrick - Global Employment Law Group on:. Sign Up Log in.
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Pursuant to this Act, employees who work six days per week are entitled to an annual minimum paid vacation of 24 working days. Employees with a five-day working week are entitled to a pro-rata vacation of 20 working days. Nevertheless, most companies grant a higher vacation entitlement, which normally varies between 25 and 30 days per year. Employees can claim their full vacation entitlement if the employment relationship has existed for a minimum of six months during the applicable vacation year. Generally, any untaken holiday entitlement is forfeited at the end of each vacation year. However, if any part of the statutory minimum holiday entitlement could not be claimed for business or sickness reasons, the employee is entitled to use this part during the first three months of the next calendar year i.
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Employees’ right to holiday in Germany
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