Federal Labor Court (BAG) Ruling: Employers Must Warn Before Forfeiture of Vacation Entitlement [Vacation Planner Update]
As per the Federal Labor Court (BAG) press release on February 19, 2019, a corresponding ruling by the ECJ on November 6, 2018, has been implemented. Specifically, this ruling means that the automatic forfeiture of vacation entitlement is no longer legal.
According to § 7 para. 3 sentence 1 of the German Federal Vacation Act (BUrlG), vacation must be taken and granted in the current calendar year. Until now, it was inferred from this provision that vacation not granted and taken by the end of the year (or the end of the transitional period) would expire. However, the ECJ held the opinion that vacation entitlements only expire automatically when the employee was actually able to take their paid annual leave. This would be assumed only if the employer expressly requested the employee to take the vacation and informed them that any untaken vacation would expire at the end of the permissible carryover period or at the end of the employment relationship. If the employee still does not take the vacation of their own accord, it may expire.
According to the BAG’s jurisprudence, the employer is obliged to “concretely and in full transparency ensure that the employee is actually able to take their paid annual leave by expressly – if necessary – requesting them to do so.” Therefore, the employer must clearly and timely communicate that the vacation will expire at the end of the reference period or carryover period if the employee does not take it. The court left open whether this must be done with an individual request or whether a general email or notice on the bulletin board would suffice. The question of when a notice about the expiration of vacation is “timely” is also still open.
To enable employers to comply with this ruling, we have adapted and expanded the existing email report of our scdsoft Vacation Planner. This allows for individual communication with employees via email. The email specifies the exact leave balance and the deadline for expiration. This feature is already available for our Vacation Planner customers – please contact us for more details!
For those companies that do not yet use the scdsoft Vacation Planner, we are planning a separate report as an alternative. Please feel free to reach out to us if you are interested.
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