Federal Labor Court: No More Automatic Forfeiture of Vacation Entitlements in Germany

Very recently, the European Court of Justice (ECJ) held that an automatic forfeiture of vacation entitlements or vacation compensation entitlements without prior notification of the employee contravenes EU law. The German Federal Labor Court (Bundesarbeitsgericht, BAG) now has joined this case law in its decision of February 19, 2019. This requires employers to take action. What Happened? The German Federal Vacation Act (Bundesurlaubsgesetz, BUrlG) provides that vacation has to be approved and taken in the current calendar year. The employee is meant to actually take the vacation and enjoy a rest. Case law accordingly held that any untaken vacation was generally forfeited at the end of the calendar year unless there were statutory reasons for a transfer to the next calendar year. If, in the event of such transfer reason, the vacation was not taken in the subsequent first three calendar months, it expired without any obligation on the part of the employer to pay compensation in…

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