07-30-2021  | Update Employment Law August 2021

No pro rata reduction of vacation entitlement in case of pro rata short-time work?




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Osnabrück Labor Court dated June 8, 2021 - 3 Ca 108/21

After the Regional Labor Court Düsseldorf recently ruled that employees do not acquire any vacation entitlement during periods of short-time work (LAG Düsseldorf, ruling dated March 2, 2021 - 6 Sa 824/20, see March 2021 newsletter), the Labor Court Osnabrück had to rule on June 8, 2021 in several similar cases on the extent to which the implementation of pro rata short-time work affects the vacation entitlement of the employees concerned.

In contrast to the Regional Labor Court Düsseldorf, the Labor Court Osnabrück rejected a pro rata reduction of the plaintiffs' vacation entitlement for periods of short-time work. However, the facts of the case which the Labor Court Osnabrück had to decide were different from those of the Regional Labor Court Düsseldorf.

Facts

Whereas in the case before the Regional Labor Court Düsseldorf the employer had ordered zero short-time work, in the cases before the Labor Court Osnabrück the employer concluded several works agreements with the works council which always provided for short-time work at short notice for the coming weeks, which was implemented by ordering days off with varying proportions of the work obligation of the employees concerned. According to the works agreements, the employer was permitted to terminate or reduce the short-time work prematurely with a notice period of two working days.

The employer reduced the plaintiffs' vacation entitlements proportionately for the periods of short-time work in the ratio of working days and days with short-time work according to the following formula:

Number of vacation days x number of days with work obligation
260 working days

The plaintiffs opposed this reduction and argued that there was no comparability with part-time employment, so that a corresponding reduction in vacation entitlements was also not appropriate. This was because the short-time workers had not, similar to a part-time employee, gained a predictable and freely configurable amount of free time through short-time work, which they could use to rest or pursue leisure activities.

To justify the pro-rata vacation reduction during short-time work, the employer relied on decisions of the ECJ and the BAG on corresponding vacation reductions vis-à-vis part-time employees and on the granting of a sabbatical to employees, as well as on the aforementioned decision of the LAG Düsseldorf in the case of "zero" short-time work.

Decision

The Labor Court followed the plaintiffs' arguments and rejected the pro rata reduction of vacation entitlements. The court referred to the lack of comparability between the short-term arrangement of individual days off and the arrangement of zero reduced working hours for a period of several weeks or months. According to the Labor Court, this could not be construed as a (pro rata) realization of the vacation entitlement. There was also no comparability to a regular part-time employment or to suspension situations such as parental leave or a sabbatical, which would entitle the employer to a reduction of the vacation entitlement. There was therefore no legal basis for a reduction. If the legislator had intended a pro rata reduction of the vacation entitlement in the case of pro rata short-time work, it would have had to create a statutory provision for this, which had not been done. Rather, it was contradictory not to take into account the days of short-time work when calculating the vacation pay on the one hand and to use them to reduce the number of vacation days on the other.

The appeal has been admitted.

Significance of the decision for practice

In view of the extent to which companies made use of the instrument of short-time working during the pandemic, the significance of the question of the extent to which short-time working affects the vacation entitlement of the employees concerned is obvious.

However, it remains to be seen whether the decision of the Labor Court Osnabrück will stand. It is true, as the Labor Court states at the beginning of the reasons for its decision, that the vacation entitlement under the BUrlG initially only depends on the existence of the employment relationship. However, insofar as the Labor Court points out that the vacation entitlement does not depend on the performance of work, this does not merit unqualified approval. As we have already stated repeatedly, the Federal Labor Court has come to make the existence and scope of the holiday entitlement dependent on the respective duty to work and as a result states that employees do not acquire vacation entitlement during periods of (agreed) release from the duty to work. [see Newsletter November 2019 as well as March 2021]

Against this background, the reasoning with which the Labor Court rejects a pro rata reduction of the vacation entitlement in the event of a pro rata reduction of working time due to individual short-time working days, that in the event of pro rata short-time working no rest and no plannable leisure time is made possible, is not convincing, even if one takes into account the short-term nature of the conclusion of the works agreement and also the possibility of amendment provided for therein. Firstly, although the short-time work was introduced only a few days in advance, it was introduced for a period of several weeks, so that there was a certain degree of predictability at least for this period. Secondly, the consideration of the lack of opportunity for recuperation due to the implementation of pro rata short-time work is not likely to be decisive for the question of the scope of recuperation leave. The purpose of short-time work zero is also not to recover from work performed, but to be released from the obligation to perform work due to a temporary loss of work caused by the economic situation. The agreement on the possibility of terminating short-time work at short notice cannot change this. After all, the employer is obliged by law to terminate short-time work immediately if the conditions for this are no longer met, irrespective of any agreement to this effect.

The fate of the vacation entitlement can, therefore, not depend on whether the employee has planning certainty with regard to the use of the time off during the short-time work. The only decisive factor should consequently be the extent to which the employee has to work as a result of the short-time work. This is also not in conflict with the fact that the short-time allowance is not taken into account when calculating the vacation pay. The employee is to be placed in the same position on vacation days as if he or she had worked regularly in accordance with the provisions of the employment contract. However, there is no reason to place the employee in the same position when calculating vacation days as if there had been no short-time work. On the contrary, it seems contradictory to make reductions in vacation days in the case of short-time work „zero“, while short-time workers do not have to accept any reductions in the case of pro rata short-time work. In an extreme case, a short-time worker who is only required to work one working day per week would have acquired the full vacation entitlement and a short-time worker on short-time work zero would have acquired no vacation entitlement for this period.

Practical advice

As long as the effect of short-time work on holiday entitlements has not been clarified by the highest courts, it is advisable to expressly stipulate the (pro rata) reduction of at least the extra-legal holiday entitlement in the contract or works agreement.

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