In the midst of the vacation season, many employers in Germany are prompted to address old and new questions surrounding the issue of vacation. This Insight series "On your mark! Get set! Vacation!" is designed to help employers keep track of recurring issues and answer important questions about German vacation law. In Part 3, we look at:
Must-Knows upon Termination of Employment
Question 1: Must a terminated employee be granted the full annual leave entitlement?
Again, it depends on the individual case. The decisive factor is the point in time at which the employee leaves the employment relationship. If an employee leaves the employment relationship in the first half of the calendar year (i.e., by June 30), vacation will only be granted on a pro rata basis—one-twelfth of the annual vacation for each full month of the existence of the employment relationship (§ 5 para. 1 lit. c BUrlG). In this case, the annual leave entitlement accrued on January 1 is reduced retroactively.
If, on the other hand, the employment relationship continues at least until July 1 of the respective calendar year, the employee must be granted the full annual leave entitlement.
Question 2: Does a leave of absence after notice of termination affect existing vacation entitlements?
Yes, a declaration of release from work can cause vacation entitlements to lapse. However, this applies only if the release is irrevocable. In this case, the employee can use the free time to which they are entitled on the...
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