No automatic expiration of unused vacation days
Two recent rulings by the Federal Labor Court (BAG) make it clear: unused vacation days do not automatically expire. With these landmark rulings in 2022, the BAG decided on the circumstances under which unused vacation days expire. In one of the cases, the plaintiff argued that she had been unable to take leave due to a heavy workload. The second case concerned the expiration of leave that could not be taken even 15 months after the end of the relevant calendar year due to a long-term illness.
Aligning with the European Court of Justice
The BAG aligns with the position of the European Court of Justice (ECJ), which ruled as early as 2018 that claims to paid leave do not automatically expire if the employee does not request leave. In a ruling from September 2022, the ECJ then decided that vacation entitlement can only expire if the employer has informed the employee of their vacation entitlement and warned them of the impending expiration. The statute of limitations for this is three years and, according to the Federal Labor Court, “begins only at the end of the calendar year in which the employer informed the employee of their specific vacation entitlement and the expiration deadlines, and the employee nevertheless chose not to take the vacation of their own free will.”
The current case law applies to the statutory minimum vacation entitlement and excludes, for example, vacation days stipulated in collective bargaining agreements or other types of additional vacation. However, it clearly favors employees. In the future, therefore, employers should consistently urge employees to claim their vacation entitlements in a timely manner—otherwise, employees may end up taking vacation days accumulated over the years. This places greater responsibility on HR managers at companies to monitor unused vacation entitlements.
