Remaining leave only becomes statute-barred under special conditions – the Federal Labor Court will most likely decide that. Employees can therefore have years of claims paid out.

Employees who once had to let remaining vacation time expire can hope to be able to take their days off soon after all or to have them paid out: the Federal Labor Court (BAG) in Erfurt announced its judgment on Tuesday, December 20th in three lawsuits due to statute-barred vacation entitlements. It is already clear that the existing statute of limitations is at least partially overturned. Decades-old claims may become relevant again, even against former employers.

FOCUS online answers all the important questions about the upcoming verdict.

The most important consequence of the BAG ruling is that remaining vacation time only becomes statute-barred if employers ask employees beforehand to take this vacation, give them the opportunity to do so and point out the imminent limitation of their vacation entitlement. If you have not met these requirements, the remaining leave never expires.

So far, the Federal Holidays Act has required holiday entitlements to be taken in the current calendar year. Vacation leave may only be carried over to the first three months of the following calendar year if there are urgent operational or personal reasons justifying this. The holiday finally expires 15 months after the end of the holiday year.

If the BAG lifts the 15-month period in many cases, employees could still claim remaining vacation decades later or demand its payment.

The change takes place in the course of adapting German law to the requirements of the European Court of Justice (ECJ). The ECJ wants to strengthen employee rights when it comes to vacation issues, which is why the BAG first asked the ECJ for a preliminary ruling on the complaints mentioned. He emphasized that vacation only expires under certain conditions, and the BAG recognized this. Experts are therefore certain that the labor court will rule on December 20 according to the EU guidelines.

The ECJ justifies its view that employees are anyway in a weaker position compared to employers. Employers should therefore not be rewarded if they breach their information obligations or do not enable employees to actually take their vacation.

The example of one of the complaints about which the BAG appealed to the ECJ shows how much money the change could flush into the pockets of employees. According to a press release from the labor court, the plaintiff worked as a tax clerk from November 1996 to July 2017, accumulating 101 remaining vacation days. According to the specifications of the ECJ, she will probably be paid around half a year’s salary afterwards.

How much each employee receives can be calculated: The value of a vacation day depends on the daily earnings. Anyone who earns 3,000 euros a month (36,000 euros a year) and works full-time (around 200 days a year) earns around 180 euros a day. If he can still get ten vacation days paid out by his old employer, he will receive around 1800 euros gross. With 100 vacation days, it would be around 18,000 euros, i.e. around half a year’s salary.

That is the exciting question that the BAG has to clarify with its judgment on December 20th.

The tax clerk, who will probably get paid 101 vacation days, had taken precautions: According to the BAG, she had had her employer certify in writing that she had accumulated remaining vacation time due to the high workload, which should not expire. This allows the employee to provide unequivocal proof of vacation collection.

Most employees are likely to lack such clear evidence. Decisive for the effects of the judgment is therefore the determination of who has to prove whether the employer asked the employee to take his vacation and informed him of the impending statute of limitations.

It is still unclear how the court will decide on this issue. Typically, however, the burden of proof lies with the employer in similar scenarios.

Even if remaining vacation time will no longer become statute-barred in the future, it is still unclear whether this rule also applies to all remaining vacation time in the past. Employment lawyer Michael Fuhlrott believes that employees will soon be able to claim holiday entitlements that have been made for a long time. He said to “Bild” that after the verdict “employees can assert holiday entitlements from the last few decades – even against the ex-employer.”

However, the year 2018 is likely to play a decisive role: In this year, the ECJ committed itself for the first time to the case law that initiated the current debate. Employees should be able to claim vacation days that expired after this date more easily than vacation days that expired before that.

It seems possible, for example, that employers will only have to prove from 2018 that they have informed employees that their vacation days will expire. “Only those who can provide proof that they have been a company since 2018 can invoke the statute of limitations,” judges the legal specialist portal Legal Tribune Online (LTO).

According to the LTO, whether a wave of lawsuits about holiday pay will soon roll over Germany depends on who the BAG places the burden of proof for informing the employer on the holiday statute of limitations.

Since the burden of proof is likely to fall on the employer, and employees may be able to assert claims that are decades old, employers are likely to present demands from employees who have long since left the company. In these cases, it is often difficult for them to bear the burden of proof. A wave of lawsuits from employees who want to take advantage of this does not seem unlikely.

According to the LTO, it will also be interesting to see whether exclusion periods in employment contracts limit compensation requirements. If the rules against vacation pay lose their validity as a result of the judgment, other compensation exclusions could possibly also become invalid. It seems conceivable that overtime will no longer become statute-barred, or only under certain conditions. Such details are likely to occupy the courts for some time.

If employees fall ill in the long term, vacation will in future expire 15 months after the end of the year instead of three years as before: According to the ECJ, one must recognize the difficulties that arise for the employer if employees are absent for a long period of time and vacation entitlements accumulate. It is therefore fundamentally correct that in the event of illness, holiday entitlements can only be transferred for 15 months and then expire. However, this does not apply to claims from the period before or after the illness in which the employee actually worked.

One of the three plaintiffs is therefore likely to fail before the BAG: He is claiming holiday entitlements that he did not take due to prolonged illness. Employees must have worked in the year from which they have leave left over.

Theoretically, the BAG could also determine in its judgment that the specifications cannot be adopted into German law. Then everything would remain the same with the holiday rules, but the EU could initiate infringement proceedings. However, experts such as the LTO consider this result to be unlikely. The requirements could certainly be incorporated into German law.

Surf tip: Work – take vacation days with you into the new year – you need to know that