It is a decision that could have far-reaching consequences for companies and employees: An employee’s remaining vacation time can no longer simply expire. This results from a decision made by the Federal Labor Court on Tuesday. The Erfurt judges are overturning the previously valid period, after which holiday entitlements generally become statute-barred after three years.
The deadline will not be completely eliminated, but it only applies under one condition: holiday entitlements only expire after three years if the employer has informed an employee in good time and personally about the remaining holiday and asked him to take it. If not, then an employee can claim unused vacation days even after many years. Possibly – this question has also been raised since today – an employee can also demand financial compensation for vacation days not taken.
To understand the scope of the decision, it helps to take a look inside Federal Vacation Act. It stipulates that an employee must in principle take his vacation before the end of the calendar year. In exceptional cases, he can also take it until the end of March of the next year, for example if the employee has been ill for a long time or the company is dependent on him. After that, the vacation entitlement expires – but only if the employer has informed the employee beforehand that he still has vacation days open, for example by e-mail or by making a note on the payslip. The European Court of Justice and the Federal Labor Court made that clear about four years ago.
So far, however, German employers have also been able to invoke a limitation period of three years. Claims that were longer in the past were also void if the companies had left their employees in the dark about their remaining vacation time. Exactly that no longer applies. In practice, this means that companies now have to fear that many employees will come to them with holiday entitlements that go back several years. You could ask for days off. Under certain circumstances, they can also request money instead of days off.
It was the same in the case that led to the fundamental decision of the Federal Labor Court: A tax clerk who had accumulated remaining vacation time over several years, according to her, had filed a complaint for a total of 101 days. After she left the law firm in 2017, she demanded compensation of 23,000 euros for the vacation days. The regional labor court in Düsseldorf largely recognized their claims, while the tax office appealed to the federal labor court – but without success.
The question that arises from the decision of the Federal Labor Court is now whether not only the vacation entitlement is time-barred, but also claims for financial compensation for vacation days not taken. The Federal Labor Court will decide on this in January. Labor lawyer Michael Fuhlrott from the law firm FHM thinks it is possible that a wave of lawsuits could then roll out to many companies. “I see the danger,” he told the SZ. It could then get complicated in court because, according to leading labor law experts, the burden of proof lies with the employer. They would then have to prove that their employees took vacation or at least were informed of their entitlements in good time.
Such evidence could be difficult to provide, fears employment lawyer Philipp Byers from the law firm Watson Farley & Williams. “In accordance with the General Data Protection Regulation, many companies delete information about their employees’ vacations taken quite quickly,” he says. This applies in particular to the period before 2018. “Until the decisions of the European Court of Justice and the Federal Labor Court at the time, companies could assume that their employees’ vacation entitlements had finally expired three months after the end of a calendar year.”
It must now be checked whether claims could not be forfeited after many years, says Byers. “The question is whether an employee who has not claimed the rest of his vacation for years, even if he changes jobs, does not signal approval through his behavior.” In order to clarify such questions, further court proceedings may be required – or a specification in the legal code.