In 2009 the European Court of Justice and, in line with its
decision, the Federal Labour Court (Bundesarbeitsgericht,
"BAG") re-regulated German holiday legislation with
respect to the loss of holiday claims of employees unable to work
on grounds of a long-term illness. As opposed to providing the
expected legal clarity, this decision triggered a number of
follow-up questions with which enterprises found themselves
directly confronted. On 9 August 2011 the Federal Labour Court
reached decisions that are of practical relevance to at least two
partial aspects, as well as dispelling uncertainties existing in
this connections.
In one case (docket no. 9 AZR 253/10) the Federal Labour Court
ruled that, with the date of the employee's departure from the
company, the claim to compensation in lieu of holiday of an
employee unable to work on grounds of a long-term illness is
subject to the individually and collectively agreed preclusive
periods in the form of a purely monetary claim. This also includes
payment in lieu of the statutory minimum holiday. Employees unable
to work due to a long-term illness who leave the company are
therefore obliged to assert compensation claims within the
preclusive period applicable to them.
In a second case constellation (docket no. 9 AZR 425/10) the
Federal Labour Court ruled that an employee unable to work on
grounds of a long-term illness cannot assert a holiday claim for
past years if he is able to take his carried-over holiday after
returning to work following his illness during the ongoing holiday
year. Holiday not taken by 31 December, respectively within the
carry-over period by 31 March of the following year, expires
automatically. Both decisions can certainly be welcomed, since they
provide clarity in two problem areas of relevance.
Before the year is out, the ECJ will also decide whether a
limitation of the carry-over period to 18 months is permissible for
employees absent from work on grounds of a long-term illness. At
least, this was what was highlighted by the Advocate General of the
ECJ in her final speech on 7 July 2011 in the "Schulte"
case (C-214/10). Should the core statements of her speech
ultimately be reflected in the ECJ's decision, then it could be
possible to word expiry clauses concerning the holiday claims of
employees absent from work on grounds of a long-term illness in a
legally valid form in future. This would distinctly reduce the
currently existing financial burden upon enterprises.
Equally of relevance in connection with holiday claims is a further
judgement of the Federal Labour Court of 20 September 2011 (docket
no. 9 AZR 416/10). According to this judgement, with the death of
an employee his holiday claim expires as opposed to being converted
into a compensation claim pursuant to sec. 7 para. 4 German Federal
Holiday Benefits Act (Bundesurlaubsgesetz,
"BUrlG") which could transfer to the heirs. In the
case underlying the decision, the heirs of a deceased employee who
had been unable to work due to illness for a full year prior to his
death demanded the settlement of his holiday claim from the
employer. Whereas the Labour Court (Arbeitsgericht,
"AG") had dismissed the case, the Regional Labour
Court (Landesarbeitsgericht, "LAG") granted the
heirs a settlement of 35 days' holiday. The Federal Labour
Court, however, shared the opinion of the Labour Court and
established that an employee's holiday claim expires with his
death and hence the heirs have no claim to compensation
therefor.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
