Global Compliance Desk – Germany

Annual Leave Entitlement During Unpaid Special Leave 

An employee who is continuously on unpaid special leave for a calendar year is not entitled to holiday leave in the absence of an obligation to work ( Ruling of March 19, 2019 – 9 AZR 315/17). 

Earlier, as ruled in a case in 2014, unpaid special leave did not reduce the statutory leave entitlement. If the employer and employee have agreed to the granting of unpaid special leave, this fact would have no effect on the accrual of the full statutory minimum leave. The Federal Office of Public Health (“FOPH”) no longer adheres to the case law. 

With its decision of March 19, 2019, the German Federal Labour Court (“BAG”) has expressly moved away from the case law. If an employee is on unpaid special leave in whole or in part during a year, the fact that the parties to the employment contract have temporarily suspended their main obligations by agreeing on special leave must be taken into account when calculating the annual leave entitlement. This means that no entitlement to paid leave accrues for any calendar year in which the employee is continuously on unpaid special leave.

The decision has so far only been available in the form of a press release and concerns the annual leave entitlement for an entire year in which the plaintiff was on unpaid special leave. It might also apply, however, if an employee, for example, only wants to go on special leave for 6 months and the employer agrees. It will probably not even be necessary to conclude an agreement on this. In this respect, however, it remains to be seen what the will say in the reasons for the judgment. For the transitional period until the reasons for the judgment will be available, an employer is recommended to stipulate, e.g. in the arrangement on special leave, that the annual paid leave entitlement accrues only pro rata at that time.

Shreya Bhattacharya

ABOUT THE AUTHOR

Shreya Bhattacharya

A labor and employment lawyer at Replicon who specializes in global compliance. Replicon provides award-winning products that make it easy to manage your workforce. Replicon is an industry leader in global compliance and has a dedicated team which pro-actively monitors international labor regulations for ensuring proper adherence with specific country rule requirements.

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