Reduction of vacation entitlements in the event of short-time work “zero”

Short-time work has now been a feature of everyday working life for many employees and companies for a good year. Nevertheless, it was disputed for a long time to what extent vacation entitlements are reduced proportionately for employees who are on short-time work “zero”. In particular, the question of whether vacation entitlements are automatically reduced during short-time work or whether this requires an explicit provision in the employment contract or in a company agreement was unresolved. The Düsseldorf Higher Labor Court (LAG Düsseldorf) has now ruled on this issue in its decision of March 12, 2021, Case No. 6 Sa 824/20.

LAG Düsseldorf, decision dated March 12, 2021, ref. no. 6 Sa 824/20

In the case decided, the plaintiff was entitled to 14 days of vacation per year on the basis of a three-day week as agreed.

Since April 2020, the plaintiff was repeatedly in short-time work “zero” until December 2020. In the months of June, July and October 2020, the plaintiff was completely on short-time work “zero”. For 2020, the defendant had therefore granted the plaintiff 11.5 vacation days on a pro rata basis - the remainder was reduced. The plaintiff challenged this with her lawsuit.

The Düsseldorf Higher Labor Court (LAG) and the Essen Labor Court at first instance dismissed the action. According to the decision of the Düsseldorf Labor Court, the plaintiff did not acquire any vacation entitlements in the months of June, July and October 2020, when she was completely on short-time work “zero”. Accordingly, she is entitled to her annual leave in 2020 only on a pro rata basis to the reduced extent. For each full month of short-time work “zero”, the vacation entitlement was to be reduced by 1/12. In view of the fact that the purpose of recuperation leave is to recover, this presupposed an obligation to work. Since the mutual obligations to perform are suspended during short-time work, short- time workers are to be treated as temporary part-time employees whose recuperation leave is also to be reduced proportionately.

This also complies with European law because, according to the case law of the European Court of Justice, the European minimum leave entitlement also does not arise during  short-time work “zero”. German law does not contain any more favorable provisions in this regard. In particular, short-time work “zero” cannot be compared with incapacity for work. The fact that the plaintiff's short-time work is caused by the Corona pandemic does not change anything.

The Düsseldorf Higher Labor Court (LAG) has allowed the appeal.

Practice Notes

A decision on how to treat vacation entitlements during short-time work “zero” and whether these are reduced automatically or only by means of an additional agreement on a pro rata basis was long awaited. The decision of the Düsseldorf Higher Labor Court (LAG Düsseldorf) now provides an initial direction as to how the German courts will assess this. It remains to be seen whether the decision will be appealed. A fundamental decision by the BAG would be desirable here in any case in order to provide more legal certainty. Until the BAG makes a final assessment, it is still advisable, despite the pleasing and correct decision of the Düsseldorf Higher Labor Court, to expressly regulate a pro rata reduction of the vacation entitlement in the event of short-time work “zero”.