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New Case Law on Unclaimed Annual Leave

15.03.2019

(updated on

07.04.2026

)

0

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In Germany every employee is entitled to at least 24 working days of paid vacation per calendar year. This vacation entitlement is exercised by the employee expressing his or her wish for vacation to the employer and requesting that it be granted. The question is what happens to this vacation entitlement if the employee does not request it within the vacation year. Does the entitlement then automatically lapse.Previous position automatic lapse of vacation if not requestedUnder the previous case law, vacation entitlements lapsed at the end of the vacation year if the employee neither applied for vacation nor the employer granted vacation of his own accord. The initiative for exercising the vacation entitlement therefore always lay with the employee. Only if the employee had applied for vacation but the employer had not granted it in the relevant year did the employee have a claim for damages for so called substitute vacation, which was aimed at release from work in the following year.The consequence was therefore that employees who did not request vacation lost their vacation for the calendar year and their entitlement lapsed.New case law on the existence of vacation entitlementsThis case law has now changed as a result of a judgment of the Federal Labour Court of 20 February 2019, case number 9 AZR 541/15.The reason for this change is the case law of the Court of Justice of the European Union in a preliminary ruling of 6 November 2018. According to this case law, the employer is obliged to ensure, in a precise and fully transparent manner, that the employee is actually able to take his or her paid annual vacation, by calling upon the employee, if necessary formally, to do so. On the basis of this Court of Justice case law, the Federal Labour Court has now reinterpreted section 7 paragraph 1 of the Federal Vacation Act. If the employer can determine the timing of vacation while taking into account the wishes of the employee, this also implies that the employer has the initiative in relation to exercising vacation entitlements.The employer must now explicitly ask the employee to take vacation and must also inform the employee that the vacation will otherwise lapse at the end of the vacation year. If the employer does not comply with this newly defined duty, the employee’s vacation entitlement does not lapse.Conclusion employees who do not request their vacation in time do not automatically lose their vacation entitlement and the initiative now lies with the employer.

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