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Quite practical: Vacation statute of limitations - what you as a boss should keep in mind
Dominik Leiter, lawyer and partner at Weisenheimer Legal in Vienna, gives useful legal tips for practice in the automotive industry. This time he explains the current legal situation regarding vacation statute of limitations.
Quite practical: Vacation statute of limitations - what you as a boss should keep in mind
In itself, Section 4 Paragraph 5 1st Sentence of the Holiday Act is not particularly complicated when it states: “The holiday entitlement expires after two years from the end of the holiday year in which it arose.” So as an employer, with a calendar in one hand and a record of vacation days already used in the other, you should be able to quickly respond to an employee's vacation request, right? I will briefly explain here why the whole thing is not so simple and what employers should pay attention to in this context.
First of all, the basics: Employees are entitled to five or possibly six weeks of vacation per working year. The working year begins on the first day of the employment relationship, but it can be agreed that the working year corresponds to the calendar year. Holiday entitlements expire after two years from the end of the working year in which they arose. If the working year corresponds to the calendar year, vacation entitlements that arise on January 1, 2021 expire at the end of 2023.
ECJ has decided
However, the European Court of Justice has now decided that vacation claims can only become statute-barred if the employer can prove that he informed his employee about the impending statute of limitations, asked him to use up the open vacation days and also made it possible to use them.
However, even before the ECJ's decision, an employer's claim that vacation entitlements had already expired was often successfully countered with another argument: the existence of a company practice. To put it simply, certain circumstances that develop in a company over time can become binding so that the employer can no longer unilaterally deviate from them. If the employer always allows his employees to use up vacation entitlements that have already expired, such a company exercise could arise.
As an employer, you are therefore well advised to introduce a system that ensures compliance with the ECJ requirements and, if possible, prevents the establishment of a company practice if it is to be possible for accumulated vacation days to expire.