Even if the title sounds a little macabre at first glance, there is a serious and not uncommon question behind it: What happens to untaken vacation if the employee dies? Under German law, an employment contract expires upon the death of the employee. So does the employee's vacation entitlement cease when they die? Until 2013, this was indeed the case - according to the German Federal Labor Court, the leave entitlement was gone and the heirs could not have its monetary equivalent (so-called compensation claim / „Abgeltungsanspruch“) paid out.
In 2014, however, the Court of Justice of the European Union (CJEU) ruled that heirs of a deceased employee are entitled to compensation for leave which has not yet been taken at the time of death if the employment relationship ends as a result of the employee's death. This is because, according to EU law, an employee's vacation entitlement may not expire upon their death (CJEU ruling, 12.06.2014, ref.: C-118/13). According to section §1922 of the German Civil Code (BGB) in conjunction with section § 7 (4) of the German Federal Vacation Act (Bundesurlaubsgesetz / BUrlG), the deceased's heirs are entitled to a compensation for the leave not taken by the deceased, as they assume all rights and obligations upon the deceased's death.
The Court of Justice of the European Union justified its ruling by stating that the right to leave is a particularly important principle of European Community law. Secondly, death, as an unpredictable event that cannot be controlled by neither the employee or the employer, should not lead to the loss of the right to paid annual leave. This is based on the idea that the employer should not benefit from the death of the employee.
As the decisions of the CJEU are binding for the European labour courts, the following has therefore applied in Germany since 2014: heirs can demand financial compensation from the (former) employer for annual leave not taken. The deceased's entitlement is therefore transferred to the heirs.
This applies not only to the statutory minimum leave, but also to any leave days to which the employee would still have been entitled, as clarified by the Federal Labour Court in its 2019 decision ( Bundesarbeitsgericht / BAG, judgment of 22.01.2019, 9 AZR 45/16) and also includes social security contributions.
However, the employment relationship itself is of course not inheritable.
I publish interesting questions about German employment law judgements on this blog regularly. If you need special advice tailored upon your individual case, don't hesitate to get in contact with me.
photo: cross style Oaxaca Mexico / source: own