Germany: The expiration of an employee’s holiday entitlement requires that the employer request the employee to take his holidays beforehand; this also applies to holiday entitlement from previous years

The plaintiff was employed as a messenger by a pharmacist. The employee did not take all of the holidays he was entitled to and the employer did not request him to do so.

After the employment relationship had terminated, the employee claimed financial compensation for untaken holidays stemming from the calendar years 2014, 2015 and 2016. The Regional Labour Court of Cologne ruled that the plaintiff was entitled to financial compensation for the untaken holidays from the calendar years 2014, 2015 and 2016, up to the statutory minimum holiday entitlement of 20 days for each calendar year. Firstly, the court found that no vacation had been validly granted to the employee, who agreed with his employer that he works 2,5 hours less per week then he was getting paid, and these 2,5 hours per week were deemed to fulfill holiday entitlements. The court found that the German Federal Leave Act (Bundesurlaubsgesetz) does not allow for holidays to be granted on a purely hourly basis, rather than in full days.

Secondly, the court ruled that the employee’s holiday entitlements from the calendar years 2014, 2015 and 2016 had not expired by the time the employee filed the lawsuit. According to the latest ECJ case law, which was adapted by the German Federal Labour Court in February 2019, an employee’s holiday entitlement only expires if the employer requested the employee to take the holidays, and informed the employee that his holiday entitlement will otherwise lapse at the end of the calendar year.

What is remarkable about the decision at hand is that the court extended the employer’s obligation to request his employees to take their holidays and inform them about the expiry of their holiday entitlement, also to holiday entitlements from previous calendar years, before the ECJ ruling even existed and was adapted by the German Federal Labor Court in February 2019.

Prior to these rulings, German case law held that holiday entitlements generally expire at the end of the calendar year during which they arose, without any action or request by the employer being necessary.

In light of this new ruling from the Regional Labour Court in Cologne, employers should request employees who have not taken all of their holidays in previous calendar years to take these outstanding holidays and inform them about the expiry of holidays entitlements. Otherwise, employers may face significant claims for financial compensation of outstanding holiday entitlements at the time the employment relationship terminates.