Commented decision: No statutory leave entitlements during unpaid special leave (sabbatical)

Decision of the Federal Labor Court from March 19, 2019 (9 AZR 315/17):

 

An employer agreed with an employee on unpaid special leave from September 1, 2013 to August 31, 2015 at her request (sabbatical). Subsequently, the employee demanded the statutory 20 (paid) leave days for 2014 from her employer. While the Labor Court dismissed the complaint, the Regional Court sentenced the employer to grant the statutory paid leave entitlement. However, the Federal Labor Court now ruled that the employee was not entitled to statutory paid leave during the period of unpaid special leave and dismissed the complaint.

The Federal Labor Court based its decision on the fact that by the agreement on unpaid special leave, the employment contract parties temporarily suspended their main performance obligations, namely for the duration of the special leave. In this case, the employee was not entitled to paid leave because he was not obliged to work. Under para. 3 (1) of the German Paid Leave Act, the employee is entitled to annual paid leave. For a six-day work week, the entitlement is 24 working days; for a five-day work week, it would be 20 working days. The entitlement to paid leave is thus adapted to the amount of work performed by the employee. Consequently, an employee cannot be entitled to paid leave for periods during which he was not obliged to perform work.

The Federal Labor Court has not yet allowed such a reduction in the case of unpaid special leave in the past. According to previous case law of the Federal Labor Court (see judgment of May 6, 2014 – 9 AZR 678/12), the employee was entitled to statutory paid leave even for periods of special leave because of the mere existence of the employment relationship during that period.

With the present decision, the Federal Labor Court turned its back on its previous case law and thus followed principles of European law. In October 2018, the European Court of Justice had ruled (ruling of 4 October 2018 – C-12/17) that paid leave entitlement on the basis of the purpose of recreation inherent in it only arises and for periods of time when the employee actually performs work.

 

Ogletree Deakin’s practical tip:

 

The decision brings clarity and transparency as well as a certain facilitation for the employer. In particular, it takes account of the purpose of the statutory paid leave entitlement, namely to grant the employee periods of rest. In practice, this decision will above all simplify the handling of so-called sabbatical years. For employers, it was usually difficult to understand why they had to grant additional statutory annual paid leave for the same period of time, which was subsequently remunerated, for granted (unpaid) sabbatical years. Agreements on sabbatical years or other special leave should continue to include a clause clarifying the reduction of statutory and contractual paid leave entitlement for the duration of the special leave.