To date, an employee who still has residual holiday claims at the end of his employment relationship had to assert these claims during the ongoing calendar year. This is because, pursuant to previous BAG case law, the limitation of Sec. 7 para. 3 sentence 1 German Federal Holiday Entitlement Act [Bundesurlaubsgesetz, BUrlG], pursuant to which holiday must be granted and taken during the current calendar year, also applied to the claim to payment in lieu of the holiday because such claim to payment in lieu was understood to be a replacement (substitute) for the holiday entitlement which was no longer realisable as a result of the end of the employment relationship.
This substitution theory has now been relinquished by the BAG. For employees incapacitated from work beyond the period for carrying over the holiday claim they have been relinquished in any event pursuant to the more recent case law of the BAG, due to requirements of Union law. Through the BAG's decision dated19 June 2012 (docket no. 9 AZR 652/10), the relinquishment of the substitution theory has now also been confirmed for employees who are not incapacitated from work.
This is because, in the opinion of the BAG, the statutory claim to payment in lieu of holiday, as a pure monetary claim irrespective of the employee's capacity or incapacity to work does not fall under the regime of the time limits of the German Federal Holiday Entitlement Act. Accordingly, the BAG granted a claim to payment in lieu of holiday of an employee whose employment relationship had terminated on grounds of a legally binding judgement dated 31 July 2008 and who had first demanded payment in lieu of holiday for 16 days holiday from the defendant by letter of 6 January 2009.
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