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Germany: An Employee Who Is On Unpaid, Special Holiday For An Entire Calendar Year Is Not Entitled To Any Paid Minimum Statutory Holidays For Such Year

The plaintiff agreed with her employer that she can take unpaid, special holidays for a period of 12 months, starting September 2013. These holidays were then extended by another 12 months until the end of August 2015, by mutual agreement between the parties. After the end of the holidays, the employee requested that the employer grant her the paid minimum statutory holidays for the calendar year 2014, in the amount of 20 working days.

The Federal Labour Court has now ruled that the plaintiff is not entitled to any paid holidays for the calendar year 2014.

Pursuant to the German Federal Vacation Act, the minimum paid annual holiday entitlement is 24 working days, based on a six-day workweek. For the common five-day workweek, the minimum holiday entitlement therefore amounts to 20 working days. The employee, who used to work based on a five-day workweek, claimed this holiday entitlement despite being on unpaid, special holidays for the entire calendar year 2014. The Federal Labour Court reasoned that the purpose of a vacation is to give employees an opportunity to relax and restore energy, which is not required in cases wherein the employee’s obligation to work has been suspended based on an agreement between the parties.

For unpaid, special holidays, the case law used to rule differently, only requiring that an employment relationship exists at all for the accrual of the minimum statutory holiday entitlement by the employee. Therefore, this new ruling is beneficial to employers. If an employee is on unpaid, special holidays for a whole year or less, this shall be taken into account when calculating the minimum statutory holiday entitlement for the respective calendar year. The entitlement needs to be pro-rated based on the time of absence. In the case at hand, this reduced the employee’s claim to zero, as she was on unpaid, special holidays during the entire calendar year 2014.