Leave compensation in the event of long-term illness – employer’s obligation to provide information

The Federal Labour Court (BAG) has in many respects adapted its established case law on leave entitlements to the legal practice of the ECJ.

The ruling of 07 September 2021 (9 AZR 3/21) is one of those judgements. Following an ECJ decision, the BAG now interprets § 7 para. 3 Federal Leave Act (BUrlG) in conformity with EU law to the effect that a forfeiture of the holiday entitlement only occurs if the employer has requested the employee to take his holiday and has informed him clearly and in good time that the holiday will expire at the end of the calendar year or carry-over period if the employee fails to apply for it. This obligation to request and inform also applies if the employee is unfit for work due to illness.

The holiday entitlement is nevertheless forfeited if it would have been objectively impossible for the employee to realise the leave entitlement even if the employer had fulfilled his duty to request and inform, in particular if the employee remains incapacitated for work beyond the sickness-related carry-over period of 15 months after expiry of the holiday year. In these cases, it is not the employer’s actions or omissions, but only the employee’s incapacity for work that is causal for the forfeiture of the leave.

It is currently still undecided how to deal with cases where the employee could have taken at least part of the leave within 15 months after the end of the holiday year. The BAG has made a referral to the ECJ, the outcome of which remains to be seen.