At least claims to compensation for vacation become time-barred after three years
In the currently very agitated vacation right comes for the enterprises again times somewhat all-clear from Erfurt, at least which concerns the partially feared additional demand of many years of financial vacation compensation.
On January 31, 2023, the Federal Labor Court (Bundesarbeitsgericht - BAG) ruled that a claim for (financial) compensation for vacation is time-barred within the regular three-year limitation period. This is because even on the basis of the previous case law/legal position, employees were able to recognize that at the time an employment relationship ended, outstanding vacation (however much) would still have to be compensated. A claim for compensation must then also be asserted (BAG, judgment of January 31, 2023 (Ref.: 9 AZR 456/20), previous instance: LAG Lower Saxony, judgment of August 20, 2020 (Ref.: 5 Sa 614/20)).
In the case decided, the plaintiff employee had left the employment relationship in 2015. However, he did not file a claim for compensation for vacation until 2019. Therefore, the employer was able to successfully invoke the statute of limitations.
The three-year statute of limitations with regard to vacation compensation therefore regularly begins at the end of the year in which an employment relationship ended and then ends at the end of the third year thereafter. This occurs irrespective of whether the employer had previously actively pointed out open vacation credits.
It is also gratifying that the BAG also confirmed in a second decision on January 31, 2023 that, according to the Senate's established case law, the claim for financial compensation for vacation not taken as a purely monetary claim is also already subject to (collectively agreed) preclusion periods upon termination of the employment relationship. The Senate expressly upheld this today (BAG, ruling dated January 31, 2023, ref. no.: 9 AZR 244/20).
PBC legal takeaways: At least on the employer side, these decisions bring some relief to this currently explosive issue. The feared provisions for possible old vacation claims of employees who have long since left the company do not have to be formed, at least not for longer than the statute of limitations. If necessary, even (effective) preclusion periods effectively limit the claims for compensation for vacation.
Author of this article and
Attorney at Law | Labor Law Specialist
Luisa Victoria Jeck
Attorney at Law