Recent decision of the Regional Labour Court of Düsseldorf: reduction of holiday entitlement due to short-time working is permissible

A part-time employee from the fast food and chain restaurant industry sued for a declaratory judgment establishing that she was entitled to the full amount of leave for the previous year. In the months of June, July and October 2020, the claimant was continuously on zero hours due to the COVID-19 pandemic. As a result, the defendant reduced the employee’s holiday entitlement proportionately, arguing that as an obligation to work does not exist during zero-hour short-time working, a holiday entitlement does not accrue.

The Regional Labour Court of Düsseldorf agreed with the lower court’s decision and dismissed the action as unfounded. It stated that the claimant had not acquired any holiday entitlement under Section 3 German Federal Vacation Act during the period of zero-hour short-time working and, therefore, was only entitled to the proportionately reduced amount of annual leave for the year 2020. According to the Regional Labour Court of Düsseldorf, the annual leave has to be reduced by 1/12 for each full month of short-time working. The Regional Labour Court of Düsseldorf stated as a reason for its decision that the purpose of leave is recreation and that this requires that the employee has actually worked. During periods of short-time working, the parties are released from their mutual obligations to perform. As a result, employees who are on short time are treated just like employees who temporarily work part time: the recreational leave of the latter may also be reduced by their employer.

The Regional Labour Court of Düsseldorf has thus based its decision on a ruling of the European Court of Justice (ECJ, Judgment of 13 December 2018 – C-385/17), who takes the view that entitlement to the European minimum leave pursuant to Article 7(1) of Directive 2003/88/EC is not acquired during periods of zero-hour short-time working. According to this ruling, the employer is entitled to reduce the holiday entitlement to take account of periods of short-time working during which the employee has not performed any work.

This matter has yet to be finally clarified by the German Federal Labour Court. The Regional Labour Court of Düsseldorf has granted leave to file an appeal on points of law. It therefore remains to be seen what position the Federal Labour Court will take on this legal issue.

In recent years, the Federal Labour Court has brought its rulings into line with the principles defined by the European Court of Justice. In 2019, for instance, the Federal Labour Court held that periods of unpaid special leave are not to be taken into account in determining the statutory minimum leave. The reason given for this was that as the employee is not obliged to work, he/she is also not entitled to a holiday (Federal Labour Court, Judgment of 19 March 2019 – 9 AZR 315/17). In another judgment from the year 2019, the Federal Labour Court held that if special leave is taken only during part of the year, the holiday entitlement must be reduced by 1/12 for each full month of special leave (Federal Labour Court, Judgment of 21 May 2019 – 9 AZR 259/18).