Reduction of Minimum Vacation Entitlement During Short-Time Work.

 Minimum vacation entitlement is automatically reduced pro rata temporis, according to a recent ECJ ruling.

Reduction of Minimum Vacation Entitlement During Short-Time Work

If short-time work is introduced in a company, the employee’s minimum vacation entitlement is automatically reduced on a pro rata temporis basis, according to a recent ruling by the European Court of Justice.

ECJ Rulings

According to the rulings of the European Court of Justice (ECJ), short-time workers are “temporarily employed part-time employees”. In fact, their situation is comparable to that of part-time workers (ECJ, judgement of November 8, 2012 – C-229/11 and C-230/11 (Heimann and Toltschin)).

Consequently an employee who is on short-time work can only claim paid annual leave for the periods during which they actually worked. Thus, no vacation entitlement arises for periods of short-time work during which they did not work – i.e. “short-time work zero” (ECJ, judgment of 13 December 2018 – C-385/17 (Hein)). 

Practical Example

For instance, if an employee normally has a vacation entitlement of 24 days per calendar year when working six days a week, after one month of short-time work zero they will only have a vacation entitlement of 22 days. However, this presupposes that they have not already taken 24 days of vacation before. If the employee is entitled to additional leave, the same applies to additional leave, unless the parties to the employment contract differentiate between minimum and additional leave.

Impact on German Labor Law

It cannot be finally assessed yet whether the automatic reduction applies without restriction in Germany. For example, the Regional Labor Court (Landesarbeitsgericht – LAG) in Hamm is tending in this direction (LAG Hamm, judgement of August 30, 2017 – 5 Sa 626/17). The Federal Labor Court (Bundesarbeitsgericht, BAG) has, however, not yet decided this case. It is thus still possible that a reduction of the minimum leave in the case of short-time work will not be admitted by the BAG. This may be due to the fact that the German Federal Holiday Act (Bundesurlaubsgesetz, BurlG) could be regarded as more favorable to the employee. Because in Germany, the existence of an employment relationship alone is a precondition for the accrual of the minimum leave entitlement under the Federal Holiday Act. Directive 2003/88 does not affect the right of the member states to apply national provisions that are more beneficial to the employees’ interests.

Nevertheless, it is to be expected that the BAG will approve the automatic reduction of the minimum holiday entitlement.

A greater legal compliance cannot be achieved by means of an individual contractual or collective regulation. This is due to the fact that §§ 1, 3 BUrlG, which contains the accrual of the vacation entitlement, cannot be waived under § 13, Subsection 1, BUrlG even by collective agreements. Even if the BAG should, against all expectations, reject the reduction an agreement to the contrary would not be effective.