Employees’ rights: ECJ strengthens holiday entitlement when the statute of limitations expires

When does vacation entitlement expire? The ECJ has decided that the decisive factor is whether the employer has done his part and, for example, pointed out that the vacation will soon expire.

Employers must inform employees who have been on sick leave for a long time about the impending loss of holiday entitlements. The European Court of Justice (ECJ) in Luxembourg ruled that if the company does not comply with this obligation, the remaining leave of a vacation year does not expire in the event of illness or reduced earning capacity of the employee.

According to the Federal Holidays Act, paid holidays must generally be taken in the current holiday year. For urgent operational or personal reasons, the remaining vacation days can also be taken up to the end of March of the following year. After that, the vacation not taken is forfeited.

On November 6, 2018, the ECJ ruled that employers must inform employees about an impending loss of holiday entitlements.

The two cases currently decided by the ECJ concerned a severely disabled employee employed by Fraport AG and a woman employed in a hospital.

The airport employee was no longer able to take his 34-day holiday due to a full disability from December 2014. The clinic employee still had 14 vacation days left for 2017 due to a long-lasting illness.

Employer: vacation claims asserted too late

The employers took the view that the respective holiday entitlements were claimed too late. If an employee is unable to take his vacation due to illness, it expires 15 months after the end of the vacation year.

However, the plaintiffs pointed out that the employer should have asked them to take their vacation in the current vacation year. Because they had not done so, the holiday entitlements had not expired, was their reasoning.

On the basis of the submission by the Federal Labor Court, the ECJ found the plaintiffs right. If an employee acquired vacation entitlements in a year before the onset of the reduction in earning capacity or if he was unable to take them due to illness, the employer must point out the impending loss of vacation entitlements.

Labor court decides in December

However, the ECJ did not decide how often and when an employer must provide information. The judgment only applies to holiday entitlements that the employee acquired in the year in which he actually worked. The BAG now wants to make a final decision on the two cases on December 20, 2022.

Az C-120/21; C-518/20; C-727/20