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Holidays during the COVID-19 pandemic: Q&As for Germany

Written by
Kliemt.HR Lawyers, the first port of call in employment law for top-class and future-proof advice.
Some employees would like to cancel their already approved holidays due to ongoing travel restrictions. At the same time, many employers must prepare for a ramp-up that will potentially hamper their ability to fulfil holiday requests in the autumn.

It has been clear since Easter at the latest: holidays on balconies are not for everyone. However, while some employees would like to cancel their already approved vacation due to ongoing travel restrictions, many employers have to prepare their companies for a ramp-up. This also means that holiday entitlements in Germany cannot be fulfilled collectively when the business gets back in full swing again (hopefully) in autumn.

Below are the most important questions and answers about vacation during the crisis.

Can leave be ordered by the employer?

Yes. As a rule, the employer alone may not determine the holiday period, but must take the wishes of the employees into account. However, in cases of ‘urgent operational concerns’, the employer can call for mandatory time off in the form of so-called company holidays, either for the entire company or for individual departments.

A massive drop in orders or slump in supply chains is likely to qualify as an ‘urgent operational concern’. Impending understaffing (in the event that all employees take holiday at the same time after the crisis) has, so far, also been recognized as an urgent operational concern.

What should employers keep in mind when arranging company holidays?

Employers should adhere to a notice period of at least 14 days and make sure that company holidays do not make up the employees’ entire annual leave. So far, the Federal Labour Court (BAG) has not objected as long as employees still receive two-fifths of their vacation entitlement beyond any company holiday. If employees form a works council, the council’s approval must also be obtained.

Can leave already granted be cancelled unilaterally by the employer?

No, normally the employer is bound by its approval of vacation time. However, exceptional situations are conceivable in which an emergency necessitates the worker to return to work during a holiday. In such situations, the possibility of a ‘revocation’ has been discussed by courts in isolated cases, but details have not been clarified. Employers who do need to recall an employee from holiday should therefore try to reach an agreement with the employee on the postponement of leave.

Can the employee unilaterally revoke approved leave?

Employees are also bound to holiday periods that have already been defined, and unilateral ‘revocation’ is also not possible for them. This applies even if planned trips cannot be started due to travel restrictions. If an employee wants to postpone an already approved holiday, the employee needs the consent of the employer.

Of course, special features apply to periods of incapacity to work, a ban on employment, or parental leave; if leave already granted cannot be taken for these reasons, it does not expire. However, even then the employee may not reschedule the holiday unilaterally but must apply for it again with the employer.

What is the effect of the quarantine on holiday that has already been approved?

If an employee is ill and has to go into quarantine at home due to an official order, the employee retains any holiday entitlement. However, if the employee is in quarantine but is still fit for work, despite a lack of legal precedent there is a case to be made for the use of holiday that has already been set. Like travel restrictions, the employer is not responsible for ‘disturbances’ to a holiday such as quarantine, and therefore does not have to allow the holiday to be cancelled.

How does short-time work affect holiday entitlement?

In principle, an employee acquires holiday time even during short-time work (a time of reduced hours, pay, or both). However, the employer can reduce the holiday entitlement for the duration of the short-time work if the employee’s obligation to work is eliminated. This procedure is the same as for the transition from full-time to part-time employment; if the employer completely eliminates the obligation to work during the period of short-time work, no holiday entitlement arises during its duration.

There is a lack of clarity as to whether holiday entitlements are automatically reduced during short-time work or whether a regulation is necessary. Because of this, agreements on short-time work should outline explicitly any basis for reduction or elimination of vacation entitlements.

Does short-time work also affect holiday pay?

No. Basically, holiday pay is based on the average earnings of the employee in the last 13 weeks before the start of vacation. However, reductions in earnings that have occurred in the previous 13 weeks as a result of short-time work are not taken into account. Short-time work therefore does not have a negative impact on the calculation of vacation pay.

Is full annual leave to be granted before the start of short-time work?

No. Employees must first use their remaining leave from 2019 before receiving short-time work benefits. Due to the COVID-19 pandemic, vacation from the current calendar year does not have to be provided until 31 December 2020.

Can leave also be granted during short-time work?

Yes. However, if leave is granted during short-time work, the employee receives regular holiday pay, not short-time work benefits. As a rule, this also applies to cases where leave was granted before short-time work was ordered and now falls within the short-time phase.

However, the priority relationship between regular vacation and short-time work benefits should be explicitly defined in the individual or company agreement on short-time work. In cases of short-time work that is reduced to zero hours via a company agreement with a works council, existing case law says a short-time work allowance takes precedence over the granting of vacation, provided that no different regulations have been made.