Germany: If the employment relationship ends due to the employee’s death, his heirs may claim financial compensation for untaken holidays towards the employer

In the case before the German Federal Labour Court, a widow claimed financial compensation for her husband’s untaken holidays. The husband had been employed with the defendant employer until his death in 2010. At the time of his death, he had 25 days of outstanding holidays. The widow’s lawsuit for financial compensation for those holidays was successful in front of the Federal Labour Court.

Pursuant to the German Federal Leave Act, an employee is entitled to payment of compensation for holidays that can no longer be granted either in full or in part due to the termination of the employment relationship. The Federal Labor Court found that the interpretation of this provision in accordance with European Union law shows that the remaining leave must also be compensated if the employment relationship ends due to the death of the employee. The Court of Justice of the European Union had ruled in November 2018 that the entitlement to paid minimum annual leave may not be lost upon the death of the employee in the current employment relationship, without there being any entitlement to financial remuneration for that leave, which must be transferred to the employee’s heirs. Taking into account this European case law, the German Federal Labour Court ruled in favor of the employee’s widow.

The above generally only applies to the statutory minimum holiday claim, which is 20 working days per calendar year in Germany, based on a five-day work week. However, when the employer does not differentiate in the employment agreement between the statutory minimum holidays and any holidays granted beyond that period, the employee’s entire holiday claim will be treated uniformly according to the requirements of law and case law.