In a recent ruling, the European Court of Justice (ECJ) has changed its previous case law to the effect that the vacation entitlement of a deceased person can be inherited.
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If an employee is unable to take their vacation and dies, their relatives are entitled to compensation, according to the European judges. Until now, the situation in Germany was clear: those who are no longer alive do not need vacation. Rest and recovery are no longer relevant. As recently as 2011, the Federal Labor Court ruled in accordance with this principle. However, the ECJ in Luxembourg has now rejected this legal view and issued a new landmark ruling. An employee who had been employed by a Westphalian food retailer since 1998 fell seriously ill in 2009 and was therefore only able to take a limited amount of vacation. He died in 2010, and by that date he had accumulated a vacation entitlement of 146 days. His wife, who had been designated as sole heir, demanded an amount of €14,600 from the employer as compensation for the vacation her deceased husband had been unable to take. The labor courts relied on the prevailing case law of the Federal Labor Court, according to which all vacation entitlements are extinguished upon the death of an employee. The plaintiff, however, invoked a European working time directive, according to which it may be possible under certain circumstances to inherit financial compensation. The EU judges have now followed this argument. In their view, national laws or practices under which vacation entitlement lapses when the employee dies are not compatible with EU law. The judges also held that financial compensation does not depend on whether the person concerned had previously submitted a corresponding request.
Frequently asked questions
Frequently asked questions
Are the vacation entitlements of a deceased employee inheritable?
Yes. According to a ruling by the European Court of Justice, vacation entitlements do not expire upon the death of an employee but can be claimed by the heirs as a financial settlement. With this decision, the ECJ overturned the previously prevailing case law in Germany, under which all vacation entitlements lapsed upon death.
Must heirs show that the deceased previously applied for the holiday compensation claim?
No. The ECJ has expressly clarified that the financial compensation does not depend on whether the deceased employee had previously filed a corresponding application for leave or compensation. The entitlement exists irrespective of any such application.
What was the German legal position on inheritable vacation entitlements before the ECJ ruling?
As recently as 2011, the Bundesarbeitsgericht (Federal Labor Court) had ruled that all vacation entitlements expire upon the employee's death, on the grounds that the recreational purpose could no longer be fulfilled. Compensation payable to the heirs was therefore excluded. This view is no longer tenable in light of the ECJ ruling.
On what legal basis does the ECJ ground the inheritability of holiday entitlement?
The ECJ bases its decision on the European Working Time Directive, which provides for financial compensation for unused leave under certain conditions. National rules or practices under which holiday entitlement expires without compensation upon the employee's death are incompatible with EU law.
What is the practical significance of the ruling for employers?
Employers must expect that heirs of deceased employees may claim financial compensation for unused vacation. Vacation entitlements accumulated during long periods of illness in particular can trigger substantial payment obligations, as illustrated by the case at hand involving 146 vacation days and a claimed amount of 14,600 euros.