Labor Law Aspects of Public Holiday Law in the Light of Home Office & Co.

When is there an entitlement to continued payment of remuneration on public holidays?

In order to protect employees and to guarantee rest on Sundays and public holidays, the Working Time Act (Arbeitszeitgesetz "ArbZG") stipulates that employees are generally prohibited from working on Sundays and public holidays (Sec. 9 of the Working Time Act). Employees nevertheless receive their salary for working time lost as a result of a public holiday, because employers are obliged to continue paying remuneration in accordance with Sec. 2 para. 1 of the Continued Remuneration Act (Entgeltfortzahlungsgesetz "EFZG").

However, if employees do not have to work on a public holiday anyway, they are not entitled to continued payment of remuneration, because there is no causality between the rest from work made possible by the public holiday law and the loss of working hours. However, this presupposes that the time off work results from a scheme that is independent of the public holiday rest on certain days. The latter is the case, for example, if the employee is off work on the relevant day in order to maintain a certain work rhythm. 

The required causality between the public holiday and the loss of work is also missing if the employee is incapacitated for work on a public holiday. In this case, the public holiday is not the only cause for the loss of working hours. Instead, there may be an entitlement to continued payment of remuneration in the event of illness. To ensure that employees who are sick are neither better nor worse off than employees who are not sick, the amount of remuneration to be paid is determined by the entitlement to continued payment of remuneration on public holidays (Sec. 4 para. 2 of the Continued Remuneration Act). In monetary terms, the sick employee is therefore treated the same as all other employees who are not sick. Sick employees may for example also claim public holiday bonuses. 

What are public holidays within the meaning of the Continued Remuneration Act?

The determination of (statutory) public holidays is basically subject to the legislative right of the federal states. This means that each federal state can enact its own public holiday law, which regulates the number and type of public holidays. However, nine public holidays are regulated nationwide by the Sunday and public holiday laws of the federal states: New Year's Day, Good Friday, Easter Monday, Ascension Day, Whit Monday, May Day, German Unity Day, and Christmas Day and Boxing Day. 

In addition, there are other public holidays that vary from federal state to federal state, such as the Epiphany, Corpus Christi, Reformation Day, All Saints' Day and Easter Sunday. These public holidays are also considered public holidays within the meaning of the Continued Remuneration Act, provided they are recognized as such in the respective federal state. Bavaria is the front-runner with a total of 13 public holidays.

In addition, it should be noted that according to the majority of the public holiday laws of the federal states, unpaid leave of absence or vacation is to be granted to employees belonging to a religious denomination for certain religious public holidays which are not statutory public holidays, unless there are compelling business or operational reasons to the contrary (cf. e.g. Sec. 3 of the Hamburg Law on Sundays, Public Holidays, Days of Remembrance and Days of Mourning).

Which public holiday law applies when employees work from home or at changing locations?

As public law, the principle of territoriality applies to the applicability of public holiday regulations. This means that the question of whether there is a ban on working on public holidays and whether continued payment of remuneration is to be made based on the specifically agreed place of work. If there is a public holiday at the place of employment, the working ban under Sec. 9 Working Time Act applies and employees may not be employed. 

The following cases are easy to handle:

• An employee lives and works in different federal states, but performs his work exclusively from the employer's place of business. 
• The employer's place of business and the employee's place of residence are located in different federal states, but the employee works exclusively from his place of residence and cannot be called back to work by the employer by virtue of his right to issue instructions. 

In both of the above cases, it must be determined whether there is a public holiday at the place of work. If this is the case, work is prohibited and the employee is entitled to continued payment of remuneration. 

Determining the applicable public holiday law is more difficult for employees with changing work locations, occasional home office or travel activities:

• If an employee occasionally works from home, the employer can, however, request the employee to work temporarily from the employer´s place of business on the basis of his right to issue instructions; in this case, it has to be checked whether the corresponding instruction is in accordance with reasonable discretion. If the employer has good reasons to "call" the employee back to work on a certain day, e.g. for customer meetings, a team meeting or training, then the instruction is likely to be in accordance with reasonable discretion and there should be no entitlement to continued payment of remuneration if there is no public holiday at the employer´s place of business – unlike at the employee´s place of residence. By contrast, if the employer only asks the employee to work at the company’s place of business in order to avoid the entitlement to holiday pay, the instruction is likely to be unlawful and there is therefore a ban on employment and a claim to continued payment of remuneration if there is a public holiday at the employee´s place of residence.
• In the case of employees with changing places of work, such as fitters, field workers and other travelling employees, it is largely assumed that, in accordance with the principle of the place of work, there is a prohibition of work and thus an entitlement to continued payment if they do not have to work due to a public holiday at the place of work assigned even for a short period. In some cases, it is also argued that fitters, for example, are entitled to continued payment of remuneration even if there is a public holiday only at the employer's place of business, but not at their current place of work. However, this view is likely to contradict the principle of territoriality and should therefore be viewed rather critically. 

Are (collectively agreed) bonuses payable for a religious but not statutory public holiday?

A large number of collective agreements provide for bonuses for work on Sundays and public holidays. The extent to which holiday bonuses are also payable for work on religious but not statutory public holidays (such as Easter Sunday or Whit Sunday) depends on the relevant collective agreement provision: 

• If a collective agreement only provides for bonuses for work on "public holidays", then employees are not entitled to payment of a public holiday bonus for Easter Sunday if this day is not a public holiday under national law. This is because if a collective agreement uses a legal term of statutory language without further explanation, this term is to be interpreted in its general meaning and, in the absence of express clarification to the contrary, probably only covers statutory public holidays (cf. Federal Labour Court dated 17 March 2010, case no. 5 AZR 317/09). 
• The Federal Labour Court assumed such a different regulation with regard to the general collective agreement for employees in North Rhine-Westphalia concluded between the Verband Deutscher Großbäckereien e.V. and the union Nahrung-Genuss-Gaststätten. This is because public holiday bonuses were agreed not only for work on "statutory weekly public holidays" but also for "work on high holidays". The Federal Labour Court had no doubt that Easter Sunday is a so-called "high holiday" as defined by the collective agreement, so that it awarded the employee public holiday bonuses for work on Easter Sunday, which is not a public holiday in North Rhine-Westphalia (see Federal Labour Court dated 24 February 2021, case no. 10 AZR 236/19). 

What else needs to be considered? 

It should also be noted that employees who work on a public holiday must be granted a substitute day of rest within eight weeks (Sec. 11para. 3 of the Working Time Act). A substitute day of rest can be any working day, regardless of whether this working day is free for the employee anyway or not, so that the granting of the substitute day of rest poses few practical problems for employers. Moreover, a public holiday that also falls on a Sunday does not have to be compensated for by an additional substitute day of rest.

"Circumvention" of the obligation to continue to pay remuneration on public holidays by ordering company vacations? 

It is also not uncommon for employers to unilaterally order company vacations over the Easter period. In essence, this contradicts the Federal Vacation Act (Bundesurlaubsgesetz "BUrlbG"), according to which employers may not determine the time at which leave is granted on their own, but must take into account the wishes of the employees. 

However, at least if there is a works council and it agrees, the introduction of company vacations by means of a company agreement is considered unproblematic (Sec. 87 para. 1 no. 5 Works Constitution Act (Betriebsverfassungsgesetz "BetrVG"). According to a controversial view, this also applies in companies without a works council. The employer should be allowed to unilaterally order company vacations by virtue of his right to issue instructions, provided that an appropriate notice period is observed and a substantial part of the annual leave (2/5 or 40%) can still be planned freely by 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 that in view of the absence of the only doctor it is impossible to carry out the practice operations. 

The most important facts in brief

• The employer shall bear the costs of continued payment of remuneration for a loss of work due to a public holiday. 
• In principle, the public holiday law of the place of work and not, for example, of the place of residence or company’s place of business is decisive. If work is always performed from home and the employee cannot be called back to the company, the public holiday law of the “home-office” shall apply; if work is always performed at the company’s place of business the public holiday law applicable at the company’s place of business shall apply. In the case of employees who work at changing locations, the place of work shall also generally be decisive. 
• Whether collectively agreed public holiday bonuses are payable for work on religious public holidays that are not also statutory public holidays depends on the specific wording of the respective collective agreement. 

Allen & Overy wishes all readers a happy Easter!