Landmark ruling: Full short-time work reduces holiday entitlement

Facts

The plaintiff was employed by the defendant three days a week as a sales assistant. According to her employment contract, she was entitled to an annual holiday entitlement of 28 working days with a 6-day week. With the agreed 3-day week, this corresponded to a holiday entitlement of 14 working days per year.

As a result of the Corona pandemic, the defendant introduced short-time work. In the months of April, May and October 2020, the plaintiff was fully exempted from compulsory work, and in November and December 2020, she was partially exempted.

When the defendant reduced the plaintiff’s holiday entitlement for the periods of short-time work to zero on a pro rata basis, the plaintiff sued for an unreduced holiday entitlement.

Decision of the LAG Düsseldorf

The Higher Labour Court (LAG) in Düsseldorf (judgement of 12 March 2021 – 6 Sa 824/20), as the lower court, ruled in favour of the defendant, as did the Labour Court in Essen. For periods in which employees are not obliged to work due to cyclical “short-time work zero”, the annual holiday entitlement is to be reduced proportionately.

In view of the fact that the purpose of recuperation leave was to recover, this presupposed an obligation to work. Since during short-time work the mutual obligations to perform were suspended, short-time workers were to be temporarily treated as part-time workers whose recuperation leave was also to be reduced proportionately. The period of agreed short-time work was therefore to be taken into account with “zero” working days when calculating the holiday entitlement, so that there was no holiday entitlement for this period.

The annual leave should therefore be calculated according to the following formula:

Holiday days per year x days with compulsory work/year = holiday days.
Number of working days per year

Confirmation by the BAG

The BAG has now confirmed this decision. Working days lost due to short-time work were not to be equated with periods of compulsory work, neither under national law nor under Union law. The loss of entire working days due to short-time work therefore justified a recalculation of the holiday entitlement during the year. This applied not only to the statutory minimum leave, but also to the contractual additional leave, provided that the employment contract did not contain an agreement for the calculation of the leave entitlement that deviated from section 3(1) BUrlG.

Classification of the decision

The fact that “short-time work zero” leads to a pro rata reduction of leave was already the predominant opinion in the literature before the BAG decision. Nevertheless, the German Trade Union Confederation (DGB) took the opposite view and supported numerous complaints about holiday reductions. In this respect, the final clarification by the BAG provides legal certainty.

Since the BAG, according to its press release (41/21 – Urlaubsberechnung bei Kurzarbeit), wants to allow the loss of individual working days due to short-time work to suffice for the recalculation of leave, there is much to be said in favour of reducing leave even in the case of only partial short-time work.

Practical effects of the decision

The BAG’s decision has implications for tens, if not hundreds of thousands of workers. According to the Federal Statistical Office, more than 500,000 people were on short-time work in October 2021. Given the force of the fourth Corona wave, an even significantly higher number of short-time workers can be expected in the coming months. The federal cabinet recently extended easier access to short-time allowance as well as the maximum entitlement period of 24 months until 31 March 2022.