Whether an employee’s holiday entitlement continues to exist after his death is still disputed. The Bundesarbeitsgericht (BAG), Germany’s Federal Labour Court, has since turned to the Court of Justice of the European Union (CJEU) for clarity on the matter.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Should an employee pass away without having made full use of his entitlement to go on holiday, this gives rise to the contentious issue of whether the right to take leave from work lapses with the death of the employee in question or are the heirs entitled to compensation in lieu of this.
To date, the Bundesarbeitsgericht has taken the view that the entitlement to vacation leave lapses with the death of the employee and does not turn into a right to compensation in lieu of this. However, the Landesarbeitsgericht Düsseldorf (Higher Regional Court of Düsseldorf) has delivered a different ruling, which is why the BAG has since appealed to the Court of Justice of the European Union. The former submitted to the CJEU the question of whether Union law awards the heirs of an employee who died while in an employment relationship the right to financial compensation for the outstanding minimum annual leave owed to the deceased even if this is precluded by national legislation.
According to the Senate’s jurisprudence, neither holiday entitlement nor claims for compensation in lieu thereof devolves to the heirs of an employee if the latter passes away while in an employment relationship. While the CJEU accepted that art. 7 of Directive 2003/88/EC was to be interpreted in such a way that it precluded the operation of national legal provisions pursuant to which the entitlement to paid annual leave lapses without any financial compensation if the employment relationship is brought to an end by the death of the employee, the Court did not rule on whether the right to financial compensation becomes part of the estate if this is precluded by national law.
The BAG considers there to still be a need for further clarification in relation to the lapsing of minimum annual leave guaranteed by Union law, as the CJEU’s case law recognizes that it is possible for this entitlement to lapse if the holiday would no longer have a positive impact on the employee for the purposes of him taking time out to relax. The BAG noted that this purpose can no longer be served after the employee has passed away.
It remains to be seen what the CJEU’s final decision will be. The case law of the BAG has hitherto proceeded on the basis of the assumption that holiday entitlement lapses and is not awarded to any heirs.
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