When does the employee's vacation entitlement expire? The employer's obligation to cooperate in the event of an employee's long-term illness.
In practice, the question always arises as to when an employee's vacation entitlement expires. Although the forfeiture of vacation entitlement is legally regulated in Section 7 Paragraph 3 BUrlG, it also requires a European-compliant interpretation. As a result, the legally regulated forfeiture of vacation entitlement has in the meantime been significantly restricted by several decisions by the ECJ and the BAG. In a current decision dated September 7th, 2021 (Az: 9 AZR 3/21), the BAG has now dealt in detail with the current legal situation. We therefore take this as an opportunity Blog post from January 8th, 2021 to expand and explain the current legal situation.
principle
According to the regulation in Section 7 Paragraph 3 Sentence 1 of the Federal Holiday Act (BurlG), vacation must generally be granted and taken in the current calendar year, otherwise it expires. Only in the event that the vacation cannot be taken due to urgent operational reasons or personal reasons relating to the employee will the vacation be carried over to the next calendar year (Section 7 Paragraph 3 Sentence 2 BurlG). In the case of transfer according to Section 7 Paragraph 3 Sentence 3 BurlG, the vacation must be granted and taken in the first three months of the following calendar year, otherwise it expires according to Section 7 Paragraph 3 Sentence 3 BUrlG.
Exception for long-term illnesses of employees
It has been known in practice for some time that the regulation in Section 7 Paragraph 3 of the BurlG must be interpreted in accordance with Union law in such a way that the statutory vacation does not expire if the employee in question is unable to work due to illness until the end of the vacation year and/or the transfer period and It is therefore not possible for him to take the vacation. The legal consequence is that this vacation entitlement is added to the vacation entitlement arising in the following calendar year and, if the employee's ability to work is restored in the current year in accordance with Section 7 Paragraph 3 BurlG, as of the end of the year (or, in the case of a new transfer reason, on March 31 of the following year) expires. However, if the employee is continuously ill in the following year and the first three months of the following year, the vacation entitlement expires after these 15 months have expired (example: vacation entitlement for 2020 expires on March 31, 2022 if the employee continues to be unable to work).
The employer's obligation to cooperate with vacation
In its much-noticed decision of February 19, 2019 (case number: 9 AZR 423/16), the Federal Labor Court decided by way of a further interpretation of Section 7 of the BurlG in accordance with the guidelines that a forfeiture of vacation entitlement always requires that the employer specifically and in complete transparency ensures that the employee is actually able to take his vacation. In order to meet this requirement, the employer must ask the employee to take his vacation, clearly and in a timely manner informing him that the vacation will expire at the end of the calendar year or carryover period if he does not request it. Employers are strongly recommended to fulfill these requests and notification obligations in writing and to document them adequately, since experience has shown that such additional vacation entitlements are only asserted years later in connection with the termination of the employment relationship by the employee.
If the employer fails to make this request or does not adequately inform the employee of the expiration, this means that the vacation - even if the employee does not request it within the specified period - no longer expires at the end of the calendar year or the transfer period. The vacation that has not expired is then added to the vacation entitlement for the following year. The provisions of Section 7 Paragraph 1 Sentence 1 and Paragraph 3 BUrlG then apply again to the entire holiday entitlement.
However, the employer can avoid accumulating vacation entitlements from several years by making up for the vacation obligations from previous vacation years in the current vacation year.
The obligation to cooperate also applies to long-term illnesses
Recently, the BAG had to increasingly deal with the question of whether the above-mentioned principles regarding employer involvement also apply to long-term illnesses of employees and whether the employer is obliged to ask an employee with a long-term illness to take their vacation.
In its request for a preliminary ruling to the ECJ dated July 7, 2020 (Ref: 9 AZR 401/19), the BAG has made it clear in principle that the employer's obligations to request and inform also apply if and as long as the employee is unable to work. The employer must also inform the employee who is unable to work in a timely manner in accordance with the legal requirements and also ask him to take the vacation.in case of recovery before the end of the vacation year or. of the transfer periodIn order to avoid forfeiture, the holiday must be applied for in good time so that it can be granted and taken within the current holiday year or the transfer period.
Limitation of legal consequences in the event of objective impossibility
However, in its current decision of September 7, 2021 (9 AZR 3/21), the BAG once again clarifies that the employer's failure to request or provide insufficient information in the event of a long-term illness of the employee has no effect on the forfeiture of the vacation entitlement according to § 7 Paragraph 3 BUrlG if it is clear (in retrospect) that the employee's realization of his vacation entitlement would have been objectively impossible.
According to the BAG's determination, what is relevant is whether the employee's inability to work alone was the cause of the forfeiture of the vacation. According to the BAG's decision, this is the case in the following situations:
- The employee was unable to work from the beginning of the vacation year until March 31 of the second calendar year following the vacation year.
- The incapacity to work only occurred during the course of the holiday year, but the employee could not have been granted any (further) holiday before it began, and the employee was then unable to work until March 31 of the second calendar year following the holiday year
In both constellations, the employer would not have been able to put the employee in a position to realize his vacation entitlements even if he had fulfilled his obligations to request and inform him. In its current decision of September 7, 2021, the BAG made it clear that forfeiture of vacation in these two constellations complies with Union law, so that the legal situation is clarified in this respect.
Legal question still pending before the ECJ
As part of the currently pending proceedings before the ECJ (ref: C-727/20 St. Vincenz Hospital) therefore only the following case constellation is clarified: The employee fell ill during the holiday year and was then unable to work until March 31 of the second calendar year following the holiday year. However, the employee could have taken the vacation - at least partially - before the start of his illness in the vacation year if the employer had fulfilled its obligations to request and inform.
If the ECJ decides that vacation does not expire in this situation, this risk for employers could only be excluded if the employer fulfills its obligation to cooperate at the beginning of the calendar year.
Dr. Andreas Wolff, lawyer and specialist in labor law
