Under German law, employees generally apply for holiday during the holiday year so that their claims can be fulfilled. If they fail to do so, their entitlement lapses at the end of the year. When employees leave their firms, they cannot claim compensation for unused holiday. A recent Advocate-General’s opinion has now thrown doubt on this practice.

This area has been under scrutiny, as several Regional Labour Courts have granted employee claims for compensation in the form of a substitute holiday (or compensation) specifically in cases where the employee has not applied for holiday during the year. Up to now, the question of whether the employee is also entitled to compensation after failing to submit the appropriate holiday request was unresolved because the German Federal Holiday Act does not contain a corresponding provision.

Two cases on this issue presented by the Federal Labour Court and by the Higher Administrative Court