The European Court of Justice (“ECJ”) issued a decision in November 2018 stating that employees do not lose their right to receive compensation for their unused vacation days even if they did not apply to take them.
German courts turned to the ECJ in order to receive guidance on vacation time rights under EU law when in two cases the widows of deceased employees’ requested compensation for their husbands’ untaken vacation days.
On one hand, according to the ECJ, if an employee’s employment relationship is ended or terminated, the employee does not lose automatically his/her vacation days or his/her right for compensation even if he/she did not take the paid annual leave. However, if the employer proves that it offered to the employee an opportunity to take his/her annual leave, the employee may lose this right. The ECJ has stated that this right also applies in case of the death of an employee. In this latter case, it is the employee’s heirs who would be entitled to the compensation.
On the other hand, the ECJ stated that it is not compatible with the European Union’s law to interpret its ruling as an encouragement for employees not to take their annual paid leave in order to secure a compensation for the event of the termination of their employment relationship.