Germany: A year on: a review of the new laws on the expiry of paid annual leave entitlements
In February 2019, the BAG (German Federal Labour Court) decided to change the law on the expiry of paid annual leave entitlements.
What are the changes?
Previously to the Federal Labour Court’s decision, untaken paid annual leave expired at the end of the calendar year it was accrued in, irrespective of whether the employer had enabled the employee to exercise that right. An exception was made, however, in certain cases where there was, for example, a medical or rehabilitation reason. A list of the exceptions is detailed here
In November 2018 the ECJ found that national legislation providing that workers automatically lose their right to paid annual leave at the end of the reference period concerned, without prior verification of whether the employer had in fact enabled them to exercise that right through the provision of sufficient information is contrary to European law.
What does this mean for employers?
The German Federal Labour Court provides initial guidance on compliance:
- The employer has to inform their employee at the beginning of the year and in good time how many working days of paid annual leave they can take in this calendar year;
- The employer has to request the employee exercise their right to take the paid annual leave in good time, and ensure that they are able to take it in the current calendar year
- The employer has to inform the employee that their right to paid annual leave will be lost at the end of the reference period or authorised carry-over period, if they do not apply for paid annual leave
- The requirements for the employer to deliver information to the employees in a specific and transparent manner are not met if the employer only informs the employee in the employment contract, in an information sheet or in a collective agreement
If these requirements are fulfilled the employee loses their right to paid annual leave at the end of the reference period or authorised carry-over period (although other European and national case-law may then apply, for example, with regard to rights relating to long term sick-leave).
((BAG 9 AZR 541/15) in accordance with the judgement of the ECJ (ECJ . C-684/16)).