An employer’s duty to notify employees of expiring vacation entitlements by December 31 of the calendar year or – in the case of vacation carried over – by March 31 of the subsequent year if the leave is not taken does not exist in cases of employees with long-term illnesses. This obligation exists only after recovery again.

Hamm State Labor Court, July 24, 2019 – 5 Sa 676/19

The parties dispute the existence of the plaintiff’s vacation entitlement dating from 2017.

The plaintiff fell ill in 2017 and was unable to take the vacation to which she was entitled. She continues to be unable to work. The parties disputed the extent of remaining leave entitlements. Most recently, the plaintiff applied to the court to issue a declaratory judgement that she was still entitled to leave from 2017. She argued that the vacation entitlement had not expired because the defendant had not asked her to take the annual leave.

Paderborn Labor Court had dismissed the complaint. The plaintiff’s appeal was also unsuccessful.

Hamm State Labor Court dismissed a motion for a declaratory judgement. The plaintiff’s entitlement to leave from 2017 expired on March 31, 2019.

Nothing else would arise from the most recent jurisdiction of the CJEU and the Federal Labor Court. Accordingly, employers would be required to ensure, in specific terms and in full transparency, that employees are actually able to take their paid annual leave. For this purpose, employers need to request employees to take the leave and notify them in due time that otherwise the vacation will cease at the end of the leave year or carry-over period.

Those principles do not apply in the case of employees suffering from a long-term illness. Information as a duty of the employer only makes sense if employees are in a position to react to it and actually take the vacation. This would not be possible in cases of continuous incapacity to work.

Even if the defendant had not yet known by the end of 2017 how long the incapacity to work would last, there was no obligation to notify the plaintiff as long as her incapacity to work lasted. Irrespective of a notification, the expiry of vacation entitlements on December 31 of the calendar year could not have occurred due to the employee’s ignorance of an impending expiry and a necessary application. It was not objectively possible to apply for or grant leave.

In cases of employees with long-term illness, it would also be incorrect for the employer to inform that existing vacation entitlements will expire unless they are claimed by December 31. In the event of incapacity to work, these will not expire until 15 months have elapsed from the end of the calendar year in which they have come into existence. The question of an expiry already at the end of the year would therefore only have arisen if the plaintiff had recovered prior to that point in time, accompanied by an obligation to notify the employee. In the case at issue, this was not relevant due to the persistent illness.

Tips for use in practice:

The decision is welcome. In any event, information on the expiry of vacation entitlements during the period of incapacity to work makes no sense if the end of the incapacity to work cannot be foreseen. Employers should ensure that employees returning to the workplace after a longer period of illness are informed about existing vacation entitlements and any impending expiry as soon as possible.