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Why employees in Germany can now take back unclaimed holiday

The Local
The Local - [email protected] • 21 Dec, 2022 Updated Wed 21 Dec 2022 08:43 CEST
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A stamped employee holiday application form. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

On Tuesday, the German Federal Labour Court ruled that holiday allowance does not automatically expire after three years, in a decision that could have far-reaching consequences for companies and employees.

What’s going on?

On Tuesday, Germany’s Federal Labour Court handed down its decision on a case involving a tax specialist from North Rhine-Westphalia who had accumulated 101 holiday days over several years due to a heavy workload.

Her employer argued that her holiday allowance had lapsed and was time-barred, but the employee took legal action against this. The Court upheld her right to claim back these days, ruling that the three-year time bar for unclaimed leave was invalid.  

The court ruled that holiday allowance does not automatically expire after three years if employers do not ask their employees to take their leave in time and warn them of an impending expiry. In doing so, it overturned the previously valid time limit.

The decision had been anticipated by labour experts, as the European Court of Justice (ECJ) had previously ruled that the entitlement to vacation leave was an "essential principle of the social law of the Union" and that restrictions to this are on this are "fundamentally inadmissible".

What does this mean for employees in Germany?

It means that an employee's remaining holiday allowance only expires after three years if their employer has explicitly asked them to take their remaining holidays or warned them that they are about to expire.

READ ALSO: Will German employers really have to monitor staff working hours?

If not, an employee can still claim unused vacation days after many years. It could also be possible for an employee to demand financial compensation for unclaimed vacation days.

Labour lawyer Michael Fuhlrott told Spiegel that: "The decision of the Federal Labor Court undoubtedly strengthens the rights of employees."

Vacation days from ten or 15 years ago could be claimed again and could, theoretically, result in mass lawsuits. 

Does this mean that I can carry over my holidays to next year?

Prior to this ruling, The Local asked Fuhlrott if the decision would have an impact on whether employees are allowed to carry their holiday over into the next year. 

He told us: "Vacation shall be taken regularly during the calendar year. Carryover to the next year is only permitted in exceptional cases. The (upcoming) ruling is not likely to change this. Employers are supposed to instruct and teach their employees to take vacation (every year)."

This decision is, therefore, not about forcing employers to allow employees to take holidays outside of the calendar year. Instead, it is about barring the limitation period for unclaimed holidays, when employees have been unable to take their leave because of heavy workloads, long periods of absence or other exceptional reasons.

READ ALSO: Working remotely from Germany: What are the rules for digital nomads?

Previously, German employers could invoke a three-year statute of limitations for unclaimed holidays, but thanks to this ruling, there is now no limit to how far back employees can claim vacation entitlements if their employer has not informed them beforehand that they still have vacation days open, for example by e-mail or by a note in the pay slip. 

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The Local 2022/12/21 08:43

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