Short-time working – Kurzarbeit in German – refers to a government scheme that allows businesses experiencing economic difficulties to temporarily reduce their employees’ working hours, with the state making up for all or part of the lost wages. Many firms have had recourse to this program for reasons related to COVID-19. The Landesarbeitsgericht (LAG) Düsseldorf – the Regional Labor Court of Düsseldorf – has now ruled that short-time work also entails a reduced entitlement to vacation leave (Az. 6 Sa 824/20).
A lot of firms have implemented short-time working in response to the coronavirus pandemic, with it being possible to reduce working hours to different degrees. We at the commercial law firm MTR Rechtsanwälte can report that, according to a ruling of the Landesarbeitsgericht Düsseldorf from March 12, 2021, in cases where work is suspended altogether – referred to as Kurzarbeit null (zero hours) – the employee does not accumulate entitlement to vacation leave during this period.
The lawsuit was filed by a saleswoman who found herself repeatedly in short-time work due to the coronavirus pandemic, at one point working zero hours continuously for a period of three months, with the employer reducing the entitlement to vacation leave for this period on a pro rata basis.
The saleswoman took action against this, arguing that she was entitled to the full vacation leave because short-time work had not been implemented at her request and did not constitute time off, as she was required, for instance, to comply with reporting obligations and remain on standby. In other words, she was not free to do as she pleased with the time.
Her lawsuit was unsuccessful before the LAG Düsseldorf, which found that she had not accumulated any entitlement to vacation leave under the German Federal Leave Act (Bundesurlaubsgesetz) for the period she was working zero hours. The court held that while vacations are meant to provide workers with time to rest and relax, this also presupposes an obligation to actually perform work. Both parties’ obligations of performance were deemed to have been suspended during the period of short-time work. The court therefore ruled that the entitlement to vacation leave be reduced on a pro rata basis for each full month of short-time work.
The LAG Düsseldorf considers this outcome to be line with European law, noting that workers do not accrue an entitlement to the minimum annual leave in Europe during periods of short-time work according to the case-law of the ECJ. The court went on to state that there are no provisions under German law that provide more favorable conditions to workers, remarking in particular that short-time work is not comparable to being unable to work and that there have been no changes to the rules in the wake of the coronavirus pandemic.
It remains to be seen whether the ruling will stand. The LAG Düsseldorf has granted leave to appeal to the Bundesarbeitsgericht, Germany’s Federal Labor Court.
Experienced lawyers can advise on issues relating to short-time work, vacation leave, as well as other matters that fall within the ambit of labor and employment law.
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