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Update Employment Law April 2021

Reduction of vacation entitlement in the event of short-time work „Zero“

Düsseldorf Regional Labor Court of 2.03.2021 - 6 Sa 824/20

Does the implementation of short-time work affect the vacation entitlement of the employees concerned?

The Düsseldorf Regional Labor Court recently had to deal with this question and found that an employee had not acquired any vacation entitlement for this period pursuant to Section 3 of the German Federal Vacation Act due to short-time work of zero hours in the months of June, July and October 2020, so that she was only entitled to her annual vacation in 2020 on a pro rata basis to the reduced extent.

Content of the press release

According to the press release dated March 2, 2021, the plaintiff had been employed at the defendant, a company in the system catering industry, since March 1, 2011 as a sales assistant with baking activities. 

As a result of the Covid 19 pandemic, the plaintiff was repeatedly subject to short-time work of zero hours from 01.04.2020 to December 2020. In the months of June, July and October 2020, this was continuous. The plaintiff was of the opinion that short-time work had no influence on her vacation entitlements. This was because short-time work due to the economic situation did not occur at the request of the employee, but in the interest of the employer. Short-time work, according to the plaintiff, was also not time off. She referred to the reporting obligations during short-time work and the possibility for the employer to terminate short-time work prematurely at short notice and argued that, as a result, there was a lack of ability to plan the time off. The vacation entitlement for the year 2020 therefore existed unabridged. 

The employer did not share this view and took the view that no vacation entitlement had arisen due to the lack of a duty to work during the period of short-time work.

The 6th Chamber of the Düsseldorf Regional Labor Court and the Essen Labor Court followed the employer's view. As a result of short-time work of zero hours in the months of June, July and October 2020, the plaintiff had not acquired any vacation entitlements during this period in accordance with Section 3 of the German Federal Vacation Act. For each full month of short-time work of zero hours, the vacation was therefore to be reduced by 1/12. This was not opposed by the purpose of the vacation leave to recuperate. For this presupposed an obligation to work. During short-time work, the mutual obligations to perform would be cancelled, so that short-time workers were to be treated as temporarily employed part-time workers, whose recuperation leave was also to be reduced proportionately.

According to the Regional Labor Court, this was also in line with European law, because during short-time work of zero hours European minimum vacation entitlement from Article 7 (1) of Directive 2003/88/EC did not arise. German law did not contain any more favorable provisions in this regard. In particular, short-time work zero was not to be compared with incapacity for work. The fact that the plaintiff's short-time work was caused by the Corona pandemic did not indicate otherwise.

The reasons for the decision have not yet been published.

Significance of the decision for practice

According to the Federal Employment Agency, 2.39 million employees in Germany were on short-time work in December 2020. The decision of the Düsseldorf Regional Labor Court is therefore of considerable practical relevance.

Although a conclusive assessment of the decision is not possible without reading the reasons for the decision, the decision of the Regional Labour Court deserves approval, at least in its outcome. As we have already discussed in previous articles, the Federal Labor Court - triggered by the case law of the European Court of Justice - has changed its case law on vacation law in recent years to the effect that the existence and scope of the vacation entitlement are dependent on the obligation to work and has consequently determined that employees do not acquire vacation entitlements during periods of (agreed) release from the obligation to work. By way of example only, reference is made to the decision of September 24, 2019 - 9 AZR 481/18 on the (lack of) acquisition of vacation entitlements in the passive part of partial retirement (NZA 2020, 300). 

Short-time work with zero hours and granting of leave are mutually exclusive. The purpose of short-time work with zero hours is 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, so that it is only consistent to deny the accrual of vacation entitlement during this period. The statement that short-time work is not comparable with incapacity for work also deserves approval. In times of short-time work with zero hours, the employee is not released from the obligation to perform work because he is unable to do so due to physical or mental complaints caused by illness, but because there is no need for his work performance.

The question in whose interest the release from work takes place should therefore be just as irrelevant for the fate of the vacation entitlement as whether there is planning certainty on the part of the employee with regard to the use of the time off during short-time work with zero hours. The only decisive factor is that the employee does not have to work during this time and, as a result, there is no need for recuperation. 

Practical advice

In the present case, the Regional Labor Court did not have to rule on the effect of short-time work, which only provides for a pro rata reduction in the obligation to work, on the vacation entitlement of the persons concerned. However, if the decision is also consistently applied to this case constellation as well, a pro rata reduction of the vacation entitlement as in the case of temporarily part-time employees is likely to result here as well. 

The Regional Labor Court has allowed the appeal. It can therefore be expected that the Federal Labor Court will soon also have to deal with the question of whether and to what extent short-time work affects the vacation entitlement of short-time workers. In view of the considerable practical relevance, a prompt clarification by the highest court would be desirable. In the meantime, it is advisable to expressly contract the (pro rata) reduction of the vacation entitlement.

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