Expiration of annual leave in cases of prolongued sickness

Tuesday, 14.07.2020

The Federal Labor Court has decided in 2012 that statutory vacation entitlements expire 15 months after the end of the vacation year, if employees cannot take their vacation due to continued illness (BAG, judgement dated 7 August 2012 – 9 AZR 353/10). The ruling referred to a decision of the European Court of Justice from 2011 and was based on an interpretation of § 7 para. 3 BUrlG which is in conformity with EU law.

In November 2018, the ECJ also ruled that leave not granted and taken by the end of the year does not automatically lapse. Rather, the eave claim only expires if the employer fulfils their “notification obligations” to the employee. To this end, the employer must inform the employee that their annual leave will expire at the end of the year or of the permitted carry-over period. Additionally, employers must remind their employees to take their annual leave in good time before it expires.

Does the 15-month period also apply, if employers don’t inform about it?

UrlaubsanspruchNow the Federal Labour Court is turning to the ECJ for preliminary judgement in two cases (BAG ruling dated July 7, 2020, Case No. 9 AZR 245/19 and 9 AZR 401/19). Both concern the question of whether the employer also has a duty of notification in cases in which annual leave can not be taken due to a continuing illness. Do employees have to be notified, in these cases, of the impending expiry of the holiday entitlement after 15 months after the end of the holiday year?

In one of the cases, the plaintiff has been continuously unable to work since her illness in 2017. She did not take 14 days of her vacation for the year 2017. The defendant did not ask the plaintiff to take her vacation, nor did they point out that annual leave claims may lapse after 15 months. The plaintiff is of the opinion that the leave did not lapse because the defendant failed to inform her in good time of the impending lapse. The defendant claimed that the leave entitlement from 2017 expired at the latest on 31 March 2019. The lower instances dismissed the action.

In the second case, the plaintiff had been employed by the defendant as a freight driver since 2000. He is recognised as a severely disabled person and has been drawing a pension for full disability since the end of 2014, which was last extended until August 2019. The plaintiff asserts that he is still entitled to 34 working days’ vacation from 2014 against the defendant. He claims that the annual leave entitlements have not lapsed either, as the defendant has not informed him about the possible expiration, and therefore hasn’t fulfilled their notification obligations. The defendant believes that the vacation expired at the end of March 31, 2016. The defendant claims that holiday entitlements expire after 15 months in cases where the employee cannot take the holiday for health reasons, irrespective of the fulfilment of the employer’s obligations to cooperate. The first two instances had each dismissed the action.

The Federal Labour Court also pointed out that the two plaintiffs could have taken at least part of their vacation before the onset of the incapacity to work.