Inheritability of the entitlement to compensation for vacation

BAG, judgment dated 22.9.2015 – 9 AZR 170/14

Once acquired, an entitlement to compensation for vacation is inheritable, and becomes part of the estate as per Section 1922 Subsection 1 BGB (German Civil Code).

An employee asked his employer for vacation compensation of approx. € 4,000.00 gross following his departure from the employment relationship. The employee died during the legal dispute. His heirs continued the legal dispute and demanded payment of the vacation compensation to the community of heirs.

The BAG (Federal Labor Court) was therefore called on to decide on the question of whether, once acquired, an entitlement to vacation compensation can pass to the community of heirs and thus become part of the estate as per Section 1922 Subsection 1 BGB.

Before abandoning the so-called surrogate theory, the 9th Senate had denied inheritability, and recognized this solely for a claim for damages (see BAG dated 19.11.1996 – 9 AZR 376/95). In a decision in 2011, the 9th Senate had however left the question open (BAG dated 20.9.2011 – 9 AZR 406/11).

Abandonment of the surrogate theory

The BAG now established that, once acquired, an entitlement to compensation for vacation is inheritable. In this respect, the BAG ultimately upheld the legal action of the community of heirs. Because it could no longer abide by its earlier case law due to the complete abandonment of the surrogate theory.

ECJ: inheritable claim to compensation, even if the employment relationship ends through death

The question of whether, upon the death of an employee, an entitlement to vacation from the current employment relationship is converted into a compensation claim to which the heirs are entitled, has now also been decided. The ECJ answered this question in the affirmative in 2014 (ECJ dated 12.6.2014 – Rs. C-118/13 [Bollacke]). In appeal proceedings currently pending (9 AZR 45/16), the BAG will shortly have the opportunity of giving up its previously deviating case law (BAG, 12.3.2013 – 9 AZR 532/11).

Summary

Claims to compensation for vacation are inheritable. If an employee has residual vacation at the time of his death, his heirs inherit a corresponding claim to compensation.