News - Germany

Germany - October 2011

Monetary claims for compensation for untaken holiday can be validly excluded

Court holds that a monetary claim for compensation can be excluded by contractual provision.

In virtue of sec. 7 par. 4 BUrlG (Bundesurlaubsgesetz, Holidays Act) the employee is entitled to compensation for holidays he was not able to take because of the termination of employment, e.g. where the notice period is shorter than the entitlement to holidays.

The claimant was employed with the defendant from October 1975 until the end of March 2008.  She was not able to work due to illness from October 2006 and received a pension for reduction in earning capacity from the end of employment.  By letter of 25th February, 2009 she claimed compensation from her former employer for holidays not taken in the years 2007 and 2008.

However, an exclusion clause in a collective agreement applicable to her employment purported to render all claims from the employment relationship forfeit unless they were asserted in writing within six months after being due.

The Federal Labour court decided that the entitlement to compensation for holidays not taken is due at the end of employment.  Since the entitlement to compensation is no surrogate for the entitlement to holidays, but a mere claim for money, it is subject to individual or collective contractual exclusion clauses.  This also applies to the compensation that has to be paid where minimum holiday entitlement (sec. 13 par. 1 and sec. 3 par. 1 BUrlG) is not taken.

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Bundesarbeitsgericht, Urteil vom 9. August 2011 - 9 AZR 352/10 -

For further information or to discuss any of the issues raised, please contact Stefanie Andrelang on +49 89 242230-0.