Compensation for lapsed holiday entitlement – even without application for holiday

Contrary to the previous case law of the Federal Labour Court (BAG), the State Labour Court (LAG) Berlin-Brandenburg has decided that employers are obliged to fulfil the holiday entitlement as per the Federal Holiday Act as well as the entitlement to breaks and rest periods under the Law on Working Hours, of their own accord. This applies irrespective of whether the employee has submitted a holiday application beforehand or not. The Claimant had been employed by the Defendant since November 2010. Following the end of the employment relationship, the Claimant claimed compensation for his 2012 holiday among other things. The Defendant countered this claim by arguing that the Claimant had not – and this is true – submitted a corresponding holiday application, either during the current calendar year 2012 or by 31 March 2013, i.e. by the end of the carry-forward period. As a result, the Defendant was not responsible for the lapsing of the holiday entitlement.

Obligation to provide damages even without aprior holiday application by the employee

The LAG Berlin-Brandenburg considering the appeal allowed the legal action and ordered the Defendant to provide compensation for the holiday. In the opinion of the court, the Defendant employer had culpably violated his obligation to grant the Claimant holiday in time. The result was that the holiday entitlement had lapsed due to the passing of time, and the Defendant was obliged to pay the Claimant damages. Fulfilment of the holiday entitlement is rendered impossible through its lapsing. In such cases, the employee can demand substitute holiday or – if the employment relationship has ended – compensation for the holiday entitlement not taken. The fact that the Claimant had not submitted a holiday application, neither in the calendar year 2012 nor by the end of the carry-forward period, and thus put the Defendant in default, is immaterial. Responsibility for compliance with the statutory requirements under the Federal Holiday Act (BUrlG) lies solely with the employer.

Employer must grant holiday in sufficient time of its own accord and without a prior request

The LAG Berlin-Brandenburg initially bases the view that the employer is obliged to grant an employee holiday in sufficient time even without a prior request on the wording of Section 7 Subsection 3 BUrlG. The formulation stating that holiday must be “granted and taken” within the period stated therein, indicates that the employer is obliged to fulfil the entitlement of his employees to the statutory minimum holiday of his own accord and not only following a corresponding request. Additionally, the statutory holiday entitlement is aimed at protecting health and has an occupational health and safety character. Occupational health and safety law recognizes that the employer is also required to fulfil his health-protection obligations without prior request. Finally, the LAG also justifies its judgment by stating that the employer must fulfil the entitlements of his employees under the Federal Holiday Act as well as the entitlement to breaks and rest periods under the Law on Working Hours, of his own accord. According to the LAG, the holiday entitlement is a form of “annual rest period” which differs hardly at all from the daily and weekly rest periods to be observed.

Inconsistency with previous case law of the BAG

The judgment of the LAG Berlin-Brandenburg deviates from the case law of the Federal Labour Court. According to the latter, an entitlement to damages in the form of substitute holiday, which is converted into a claim for compensation upon ending of the employment relationship only exists if the employer was in default on granting the original holiday entitlement at the time of its lapsing (BAG judgment dated 15.9.2011, 8 AZR 846/09). As the LAG Berlin-Brandenburg does not presuppose this, the State Labour Court allowed a further appeal to the Federal Labour Court.

Summary

Contrary to the case law of the Federal Labour Court, the State Labour Court Berlin-Brandenburg has decided that the employer must fulfil the holiday entitlements of his employees under the Federal Holiday Act of his own accord. If an employer culpably fails to comply with this obligation and the holiday entitlement lapses as a result, the employer runs the risk of claims for damages. The LAG Berlin-Brandenburg has thus ruled that the employer is solely responsible for ensuring that employees take their holiday in the envisaged period. At least until such time as the Federal Labour Court issues a clarifying appeal ruling, employers should therefore monitor the actual taking of the statutory minimum holiday by individual employees, so as to prevent excessive “accumulation” of holiday and possible damage claims.