Court Declares No Waiver of Statutory Minimum Vacation Possible
Reduction of compulsory leave entitlements waived off
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It's a hard no - employees can't waive their statutory minimum vacation even when terminating their employment contract through a court settlement, according to the Federal Labor Court in Erfurt. The court made this clear in a case hailing from North Rhine-Westphalia.
The controversial argument involved the compensation for seven days of statutory minimum vacation. The employee, working as an operations manager, was ill from the start to the end of their employment. After a court settlement, the employment relationship was terminated with a severance payment of €10,000. The settlement contained a provision stating that vacation claims were "granted in kind."
The former operations manager contested this and demanded payment of €1,615 plus interest for the remaining seven days of statutory minimum vacation. The employee argued that the waiver of minimum vacation agreed upon in the court settlement was invalid.
Lower courts sided with the employee. However, the Federal Labor Court has now overturned the employer's appeal, stating that the employee is entitled to compensation for their unfulfilled statutory minimum vacation from 2023, under the Federal Vacation Act. An agreement that vacation claims are granted in kind is invalid for waiving minimum vacation, the federal judges ruled.
In general, an employee's statutory minimum vacation entitlement in Germany is often protected by law and cannot be waived unilaterally. While there can be exceptions in specific cases like mutual termination agreements or court settlements, such agreements must comply with strict legal requirements and must not contravene public policy or mandatory labor laws. Any waiver of statutory rights must be clear, voluntary, and in compliance with German law to be enforceable.
- The Federal Labor Court's ruling underlines the importance of understanding Community law, particularly in relation to workplace-wellness and health-and-science, as it dictates that an agreement that vacation claims are granted in kind is invalid for waiving minimum vacation, in line with the guidelines set by the Federal Vacation Act.
- This case also underscores the significance of knowing the legal aspects of Community law, as it sheds light on the protection of employees' statutory minimum vacation entitlement, which cannot be waived unilaterally, and highlights the fact that such waivers must comply with strict legal requirements and not contravene public policy or mandatory labor laws.
