The legal basis
The Federal Annual Leave Act actually stipulates that an employee’s preferences must be taken into account when planning annual leave. An exception applies only if this conflicts with the employer’s ‘urgent operational requirements ’.
The landmark ruling by the Federal Labour Court (BAG, ref. 1 ABR 79/79) sets a clear limit in this regard:
A maximum of 3/5 (approx. 60 per cent) of the statutory annual leave may be allocated to company-organised holidays.
At least 2/5 of the holiday entitlement must remain at the employee’s free and individual disposal.
An overview of the requirements
Urgent operational requirements:
The employer must be able to demonstrate objective grounds for this.
These include, for example, dependence on third parties (closure of a key supplier), seasonal factors (e.g. the construction industry in winter) or staffing arrangements (e.g. closure during the practice owner’s holiday period).
Co-determination by the works council:
If the company has a works council, it has a mandatory right of co-determination.
Timely notice:
To give employees certainty when planning their schedules, company holidays must be announced with reasonable notice – in practice, usually at least 6 months in advance.
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Challenges: What happens if you don’t have enough holiday entitlement or fall ill?
What happens if an employee has too few holiday days left?
For example, following a change of job or when a new employee is taken on, the employee may not yet have any holiday entitlement, or may no longer have sufficient holiday entitlement. However, the employer must not force the employee to take unpaid leave. The employer must then either provide alternative work or grant time off with continued payment of wages.
What happens if an employee falls ill during the company-wide holiday period?
If an employee can prove they have fallen ill during the company holiday period, the sick days will not be deducted from their holiday entitlement upon presentation of a doctor’s certificate of incapacity for work and must be granted flexibly at a later date.
Tip from SaaS.de
Enter company holidays (or company holiday periods) for all staff well in advance and make this a mandatory requirement, and check the holiday requests submitted against the legal requirements. Only approve holiday requests from staff in line with your company holiday schedule!
You can find out more about "Being ill on holiday" in our blog post ‘Being ill on holiday’.
Sources:
Section 87(1)(5) of the Works Constitution Act (BetrVG), Sections 7(1) and 9 of the Annual Leave Act (BurlG)
Federal Labour Court (BAG), Case No. 1 ABR 79/79