Year after year - Vacation chaos over the holidays

Do employees have to work on Christmas Eve and New Year's Eve?

Contrary to a still widespread misconception, Christmas Eve and New Year's Eve are "ordinary" working days. Unless Christmas Eve and New Year's Eve exceptionally fall on a Sunday, employees must fulfill their contractual obligations if they do not want to risk their wage entitlement ("no work, no pay") and consequences under employment law.

And even if Christmas Eve and New Year's Eve fall on a Sunday, Sec. 10 of the Working Time Act (Arbeitszeitgesetz "ArbZG") contains exceptions to the principle of rest on Sundays and public holidays. This of course includes the employment of employees in emergency and rescue services, but also in restaurants, theaters and cinemas. In multi-shift operations with regular day and night shifts, the beginning or end of work on Sundays and public holidays may also be moved forward or back by up to six hours under certain conditions (Sec. 9 Para. 2 Working Time Act). In addition, supervisory authorities have the option of exceptionally permitting Sunday and holiday work at the employer's request pursuant to Sec.13 Para. 3 to 5 Working Time Act, although the requirements for such exceptional permits are high.

What are the exceptions?

However, many employers voluntarily give their employees full or partial time off on Christmas Eve and New Year's Eve with continued payment of remuneration.

This can be stipulated in individual contracts as well as in collective agreements or works agreements. Often, for Christmas Eve and New Year's Eve, either a complete leave of absence or at least a four-hour leave of absence with continued payment of remuneration is agreed, insofar as operational conditions permit.

Another special feature applies in some federal states, at least for 24 December. In Bavaria, for example, Christmas Eve is a "silent day", i.e. noise pollution is prohibited from 2 p.m. onwards (Art. 3 Para. 1 Act Governing Work on Sundays and Public Holidays Bavaria (FTG Bayern)). For construction sites involving noisy work, this could mean that work has to be stopped by the afternoon at the latest. Employees are practically granted half a day off by law if they cannot be employed elsewhere.

What traps can employers fall into?

From the employer's point of view, it is imperative to avoid a situation where an entitlement to time off work on Christmas Eve and New Year's Eve arises by virtue of company practice.

A company practice is defined as the regular repetition of certain conduct on the part of the employer from which employees can conclude that they are to be granted a benefit or advantage on a permanent basis. The decisive factor for the accrual of a claim is not the employer's intention to impose an obligation, but how the employees could understand the employer's declaration or conduct, taking into account all accompanying circumstances. If, for example, an employer gives its employees time off on Christmas Eve with continued payment of remuneration for three consecutive years without indicating that this is voluntary, this can lead to employees being able to request time off on Christmas Eve in the following year as well by virtue of company practice.

Consequently, in order not to give the impression of such a commitment, employers should make it clear that the time off from work is voluntary and (for the time being) one-time. According to case law, it may be sufficient to state that the time off is voluntary "also this year" or for the "current year". This can be done, for example, by circular letter, e-mail or also by posting on the notice board or publication on the intranet. Many employers also include a corresponding note on the wage and salary slips in the month of December.

Whose vacation wishes come first?

If there are no such regulations under individual or collective law, employees must request vacation on Christmas Eve and New Year's Eve if they are generally obliged to perform work but do not wish to do so.

For employers, this can sometimes become problematic if a large number of employees request vacation at the same time, but not all employees can be granted vacation. The concept of "first come - first serve" alone does not suffice. According to Sec. 7 Para. 1 Sentence 1 of the Federal Vacation Act (Bundesurlaubsgesetz "BurlG"), employees' vacation wishes must be taken into account when determining the time of their vacation. The employer only has a right to refuse performance if there are urgent operational concerns. In the event of a dispute, these must be proven by the employer.

Urgent operational concerns may exist, for example, during a particularly work-intensive period in certain industries (e.g. Christmas in retail, annual financial statements in the case of a company audit), although it is precisely in these circumstances that their plannability must be taken into account. A subcategory of urgent operational concerns are also conflicting vacation requests from other employees who enjoy priority from a social point of view. Social considerations within the meaning of Sec. 7 Federal Vacation Act include, in particular, the closing times of daycare centers, school vacations for children of compulsory school age, vacation opportunities for partners, age, length of service, need for recuperation or handling in the past. In practice, employers are therefore quickly inclined to always give parents with school-age children priority over single persons.

Do single people then always get the short end of the stick?

However, this concept does not go far enough. Because employers must weigh up all significant circumstances of the individual case and take all interests into account when exercising their right to issue instructions. This also includes whether employees have already worked on these "unpopular" days in the past year. It may therefore be unjust if the same employees are required to work on Christmas Eve and New Year's Eve every year.

Best case, employers are able to actively involve employees and work toward a mutual agreement on vacation requests. This also prevents conflicts within the workforce. 

Are complete vacation blocks also permissible?

In some industries, rejecting individual leave requests is not enough. Rather, employers rely on each individual employee. This may be the case in retail, for example. Here, the period between the years represents one of the most work-intensive times of the year. Employers then have a considerable interest in a complete "vacation ban". 

The legality of such a vacation ban is also governed by Sec. 7 Para. 1 Federal Vacation Act. According to this, the employer must in principle approve the properly requested vacation at the time desired by the employee, provided that no urgent operational reasons justify a refusal. There are no such reasons if the absent employee can be substituted by other employees and the undisturbed operation of the company can be guaranteed in this way. Only if this is not possible, a vacation ban may be considered. However, the urgent operational reasons must exist for the entire period of the vacation ban. In addition, the works council has a right of co-determination in accordance with Sec. 87 Para. 1 No. 5 Works Constitution Act (Betriebsverfassungsgesetz "BetrVG") when determining a vacation ban.

Will any remaining vacation be taken into the new year?

If vacation bans are imposed over the Christmas period, this may mean that remaining vacation days can no longer be taken in the current calendar year. This conflicts with Sec. 7 Para. 3 Sentence 1 Federal Vacation Act, according to which employees' vacation entitlement is generally limited to the current calendar year. It must therefore be granted and taken in the current calendar year and expires if this has not been done, there are no impediments independent of the employee's will and the employer has fulfilled its notification obligation. However, according to the case law of the European Court of Justice (ECJ), the latter requires the employer to call on its employees in good time during the course of each vacation year to take their vacation and at the same time to inform them that the vacation will expire at the end of the calendar year or the carryover period if it is not taken. Failure to comply with the obligation to notify not only means that vacation entitlements do not expire at the end of the carryover period, but also - as the Federal Labor Court ruled on 20 December - that vacation entitlements do not lapse after three years. Employers are therefore well advised to review their current information systems and adapt them if necessary, because abstract information in the employment contract or the still widespread general information in pay slips is not sufficient.

If employees submit a vacation request in December, for example, and it is rejected due to urgent operational reasons, then the remaining vacation is carried over to the following year in accordance with Sec. 7 Para. 3 Sentences 2 and 3 Federal Vacation Act and can in any case be taken until 31 March of the following year. In practice, it is recommended, at best, to bindingly define the new vacation period before the start of the following year.

Is there an entitlement to an extra pay for work on Christmas Eve and New Year's Eve?

There is no legal entitlement to an extra pay for work on Christmas and New Year's Eve. These are "normal" working days. Nevertheless, it is common to find provisions in employment contracts, and especially collective agreements, according to which employees receive bonuses for work on such days. They intend to make work on Christmas Eve and New Year's Eve more attractive and at the same time to compensate for the special (private) burdens on employees on these days.

In some cases, company agreements also provide for special bonuses or extra pay for work on Christmas Eve and New Year's Eve.

Can employers unilaterally order company holiday at Christmas time?

In contrast, employees do not always agree when employers order company holiday "between the years". As a general rule, employers are not allowed to unilaterally determine the time at which vacation is granted, but must take into account the wishes of the employees. And these might prefer to take vacation in the summer time rather than “between the years”.

However, at least if there is a works council and it agrees, the introduction of company holiday by means of a company agreement does usually not raise legal problems (Sec. 87 Para. 1 No. 5 Works Constitution Act). According to a (disputed) view, this also applies in companies without a works council. The employer is assumed to be allowed to unilaterally order company holiday by virtue of his right of direction, provided that an appropriate notice period is observed and a substantial part of the annual leave (2/5 or 40%) remains freely plannable for the employees. In some cases, it is considered necessary that there are also urgent operational concerns within the meaning of Sec. 7 Para. 1 Federal Vacation Act. These could be, for example, that due to the lack of supply of the necessary raw materials from the sole supplier, no meaningful work is possible anyway or, in view of the absence of the only doctor, it is impossible to carry out the practice operation.

The most important facts in brief:

• Christmas Eve (December 24) and New Year's Eve (December 31) are not public holidays and are therefore (if they do not fall on a Sunday) “ordinary” working days. There is no legal entitlement to extra pay for work on these days. However, bonuses are sometimes provided for in individual contracts or collective agreements.
• If employees do not wish to work, they must generally take leave for that day, unless their company voluntarily grants them full or partial leave with continued payment of remuneration on the basis of individual contracts or collective bargaining agreements. Alternatively, employees can also take time off to compensate for overtime worked.
• In the event of conflicting vacation requests, employers must exercise their right of direction at their reasonable discretion and may only refuse vacation requests if there are urgent operational concerns.  In particular, the social interests of the employees must be taken into account. If, for this reason, there is remaining vacation, it should ideally be determined before the start of the carryover period (1 January to 31 March of the following year) when this is to be taken in the new year.
• Pursuant to Sec. 87 Para. 1 No. 5 German Works Council Constitution Act, the order of company holiday and / or vacation bans requires the co-determination of the works council.

Whether at work or on well-deserved vacation, we wish all our readers a Merry Christmas and a Happy New Year.