Will employers soon be under an obligation to require their employees to take holiday?

Although pursuant to Sec. 7 para. 1 of the German Federal Leave Act (Bundesurlaubsgesetz) it is the employer‘s obligation to grant holidays, in practice this usually occurs only after the individual employee’s formal request for holiday leave.

In the near future, the European Court of Justice (ECJ) must decide whether or not employers can – as currently – wait for an employee’s holiday request before granting holiday or if they are legally obliged to require employees to take at least the statutory minimum holiday, in order to prevent the employee being able to carry forward unused holiday entitlement to the following year or being entitled to payment in lieu of unused holiday.

Pursuant to current case law of the German Federal Labour Court, the employer is entitled but not obliged to request employees to take holiday leave, i.e. without receiving a formal holiday request. If the employee does not request holiday leave, the holiday entitlement is forfeited at the end of the reference period. Recently, however, several state labour courts have viewed this critically and declared themselves in favour of employers being under an obligation to require their employees to take holiday leave even without a formal request. Prompted by this, the German Federal Labour Court submitted a reference for a preliminary ruling to the ECJ.

The opinion of the ECJ’s Advocate General was published on 29 May 2018 and indicates that in the future employers will not be obliged to require their employees to take holiday leave in cases where it has not been formally requested. However, according to the Opinion, employers may nevertheless be required to prove that suitable measures were taken to allow the employees to take holiday leave. This could – according to the Advocate General – also include an obligation on the employer to inform the employee that if not taken their holiday entitlement will be forfeited.

Employers should therefore now request at an early stage in the holiday year that their employees book their holiday leave and should inform them that, if not taken, their holiday entitlement will be forfeited. The employer‘s request should be documented for evidentiary reasons. If the employee should nevertheless not request any holiday leave, it may be advisable for the employer to require the employee to take the holiday leave.