In accordance with Section 7 (3) BURLG, vacation must be granted and taken in the current calendar year. A transfer to the following year should only ever be permitted if urgent operational reasons or reasons relating to the person of the employee justify this. However, the remaining vacation from the previous year must then be taken by 31/03 of the new year at the latest. If this does not happen, it expires.

According to the law and so far, employers have been able to claim relatively easily to employees on 31.03 of the following year that their remaining vacation from the previous year had expired. But it's not that easy anymore.

In its case law, the Federal Labour Court has implemented the requirements of the Court of Justice of the European Union based on the preliminary ruling of September 22, 2022 (- C-120/21 -). According to this, the employer must ask employees to take the vacation, enable them to take the vacation and point out that it expires if it is not taken. If the employer does not do so, the vacation does not expire either at the end of the calendar year (Section 7 (3) (1 BURLG) nor at the end of a permitted transfer period (Section 7 (3) BURLG). But that's not all. The statutory limitation period also does not start to run.

It is true that the statute of limitations (Section 214 (1), Section 194 (1) BGB) apply to the statutory minimum vacation. However, if Section 199 (1) BGB is interpreted in accordance with the Directive, the regular limitation period of three years does not necessarily begin at the end of the vacation year, but only at the end of the year in which the employer notifies the employee of his specific vacation entitlement and the expiry periods and yet the employee has not taken the vacation voluntarily.

Conclusion: If employers do not want to risk being exposed to significant vacation entitlements from their employees over time, they must take action — individually for each individual employee. At best, right at the beginning of the calendar year. At this point, the employer must inform individual employees how many vacation days they actually have in this calendar year. He must request that the leave be taken, enable employees to ensure that the vacation can actually be taken, and point out that the vacation expires if it is not taken voluntarily.

Employees, on the other hand, should pay attention to whether their employer has complied with the above-mentioned obligations to cooperate. If not, they can still claim remaining vacation claims from previous years. They do not have to fear expiration or statute of limitations. Especially after the end of an employment relationship, this is often a welcome additional “farewell gift.”

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