German Federal Labour Court:No statute of limitation for vacation claims
Case
In the case underlying the decision, the employer and the employee disputed the compensation for vacation. During her 20-year period of employment, the employee had accumulated more than 100 days of vacation, which she then claimed in court. The employer had at no time requested the employee to take her vacation and had also not pointed out that vacation not requested would be forfeited. In the court proceedings, the employer invoked the fact that the vacation had expired in accordance with Section 7 (3) of the German Federal Vacation Act (BUrlG), or at least that it was time-barred.
Decision of the German Federal Labour Court
The Federal Labor Court rejected the employer’s objections and awarded the employee the claimed vacation compensation.
In doing so, it first confirmed its previous case law, according to which the statutory regulations on the expiry of vacation claims at the end of a calendar year and on the carryover period into the following year only apply if the employer has fulfilled its obligations to cooperate. He must inform the employee how much vacation he is still entitled to, request him to apply for it in due time and inform him that vacation not taken will be forfeited (abstract information such as the mere reproduction of the legal text is not sufficient in this respect). In addition, he must put the employee in a position to actually take the vacation.
In a second step, the court explains that the vacation claim is also not subject to the statute of limitations if the employer has not fulfilled its obligations to cooperate. The protection of employees takes precedence over the objective of establishing legal peace and certainty pursued by the limitation of claims.
Practical Advice
The reasons for the decision are not yet available. However, today’s ruling is likely to mean that employees will be able to claim their (statutory) vacation or compensation for it practically without limit (the facts of the case go back 20 years) and may be able to demand high back payments (in the present case approx. 17,500 euros plus interest) if their employer has not fulfilled its obligations to cooperate. In this respect, it is even conceivable that lawsuits will be filed against former employers.
In this respect, employers are well advised to regularly (e.g. at the end of each quarter) and reliably – e.g. by e-mail or with a note on the pay slip – provide their employees with the required information and to document this in order to be able to meet the burden of explanation and proof in the event of a dispute. It is urgently not advisable to provide information purely verbally.
It should be noted that the duty to inform also applies to employees who have been on long-term sick leave. In the case of these employees, there is a particular risk that considerable amounts of leave will otherwise be accrued.
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