25. Apr 16

BAG: Holliday entitlement lapses with death of employee

A ruling of the Arbeitsgericht Berlin (Labour Court of Berlin) is causing a sensation. According to this, heirs can have the holiday entitlement of a deceased employee paid out to them. The Bundesarbeitsgericht (BAG) [Federal Labour Court] came to a different conclusion.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: It is enshrined in employment law that employees are entitled to a certain number of holidays per year. The question is whether this holiday entitlement is passed on to the heirs following the death of the employee? Surprisingly, the answer is yes according to the Arbeitsgericht Berlin. The Court ruled that they could have the deceased’s remaining holidays paid out to them by the employer, with the entitlement to holiday leave turning into a claim for payment in lieu thereof.

The Arbeitsgericht Berlin’s ruling has not only come as a surprise, but also deviates from the case law of the Bundesarbeitsgericht. In its judgment of September 20, 2011, the BAG had already held that the entitlement to holiday leave lapses when the employment relationship comes to an end upon the death of the employee (Az.: 9 AZR 416/10). A right to payment in lieu of holidays requires that the employee still be alive when the employment relationship is terminated. The Court stated that an employee can only be granted leave as an exemption from his obligation to work. It went on to say that this obligation to work is generally tied to the employee in question as an individual and does not transfer to the heirs in the event of death.

Due to the fact that the employment relationship comes to an end with the death of the employee, holiday entitlement is no longer relevant. Thus, the Court also stated that there could not be a right to payment in lieu of holidays and, to this extent, holiday entitlement does not become part of the estate.

Whether the ruling of the Arbeitsgericht Berlin will endure much longer remains to be seen, as it not only contradicts the BAG’s case law, but it is also still possible for an appeal to be lodged against this judgment. It would then be for the Landesarbeitsgericht Berlin-Brandenburg (Higher Regional Court of Berlin-Brandenburg) to deliver a verdict on the matter.

This somewhat odd case does not represent the only issue that can arise within employment law. There is always the potential for legal disputes between employers and employees. These frequently arise in the context of dismissals. Lawyers who are competent in the field of employment law can take pre-emptive action to prevent a lot of disputes from occurring by ensuring that agreements are optimally drafted, and can also assist in enforcing or fending off claims.

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