EU court bolsters vacation time rights

The European Court of Justice (ECJ) ruled on Tuesday that people do not lose their right to be compensated for unused vacation days — even if they didn't apply to take them.

After examining four cases out of Germany, the court's decision grants more rights to employees and heirs with regards to vacation time payouts — albeit with several strict restrictions.

How the court ruled: 

• Workers do not automatically lose their vacation days — or their right to be compensated for them — if they did not take those days off, the ECJ ruled. 
• A person can lose those rights, however, if an employer can prove that the employee was given ample opportunity to take vacation.
• These rules particularly apply to workers whose employment contracts have either ended or were terminated.
• The court rejected, however, any interpretation of its ruling that would encourage employees to refrain from taking their vacation days in order to secure compensation when their contract ends. They said that such action is "incompatible" with EU law on paid annual leave.
• In a separate issue, the ECJ also confirmed that a worker's right to paid leave "does not lapse" when the person dies. The family members and heirs of the deceased are also entitled to compensation for the deceased employee's unused vacation time.

What were the cases?: Two of the cases involved the vacation days of deceased employees. Two widows requested compensation payments for the vacation time that their husbands were unable to take because they passed away. Germany's Federal Labor Court asked the ECJ whether the women have a right to the payouts under EU law, as German law doesn't grant them this right.

Another two cases out of Germany asked the question: Does vacation time expire if it isn't taken?

A legal trainee in Berlin who decided not to take vacation during the last five months of his traineeship petitioned for compensation for his vacation time. His employer argued that he wasn't restricted from taking the time off during his traineeship. Another case involved a former employee of the Max Planck Society who wanted to be compensated for 51 days of vacation that he hadn't taken in two years. His employer also argued that he wasn't stopped from taking the days.

German vacation time laws: Employees working five days a week in Germany are guaranteed at least 20 vacation days in a year. Depending on the contract, some are entitled to more. According to German law, vacation days must be taken within the year that they are issued. They can be carried over into the next year, but must be taken by the end of March.

Both German and EU law stipulate that unused vacation time cannot be paid out, with one exception — if the contract is terminated. German court rulings have gone a step further, saying that a person can only be compensated for their unused days if their application for vacation was rejected.

What happens next: German courts turned to the ECJ for guidance on vacation time rights under EU law. The EU rulings will now go back to the German courts, who will make a final ruling in the cases.

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