The European Court of Justice (ECJ) has ruled that European Union law precludes national legislation or practice which provide that, where the employment relationship is terminated by the death of the worker, the entitlement to paid annual leave is lost without conferring entitlement to an allowance in lieu of the outstanding leave. The ECJ also ruled that allowance does not depend on a prior application by the interested party.

1.
Death of worker does not extinguish right to paid
annual leave
Publication Date: 7 July 2014 | Author(s): Dr. Corinna Verhoek Member Firm(s): Kliemt &
Vollstädt Country: Germany
The European Court of Justice (ECJ) has ruled that European Union law precludes national
legislation or practice which provide that, where the employment relationship is terminated by the
death of the worker, the entitlement to paid annual leave is lost without conferring entitlement to an
allowance in lieu of the outstanding leave (Bollacke v K+K Klaas & Kock B.V. & Co. KG, Case C-
118/13).
The ECJ also ruled that allowance does not depend on a prior application by the interested party.
Case underlying the decision
The case concerned a worker, Mr Bollacke, who was employed by a German food discounter from
August 1998 until his death in September 2010. From 2009 until his death, he was unable to work
due to a serious illness. By the time he died, he had accumulated more than 140 days of annual
leave. His widow demanded compensation for untaken leave, but the company rejected the claim
because it was assumed it was not inheritable.
Legal background
According to German case law a claim for annual leave is inheritable if the employment
relationship is terminated before death - for example, by notice on grounds of the employee’s
continued sickness. If, however, the employment relationship ends due to death, any
compensation claim is not inheritable (Federal Labour Court, judgement of 20 September 2011, 9
AZR 416/10 and of 12 March 2013, 9 AZR 532/11).
On this basis, as Mr Bollacke’s employment had ended through death, his widow’s claim was
rejected by a German Local Labour Court. The Appellate Court referred the case to the ECJ,
asking whether the relevant German case law was compatible with the EU law. It also asked
whether compensation depends upon a prior application by the involved party.
Decision and reasoning of the ECJ
The ECJ found that this German practice was not compatible with EU law, confirming its previous
case law that the entitlement of every employee to paid annual leave should be regarded as a
particularly important principle of EU social law. Moreover, it said, entitlement to annual leave and
payment in respect of that leave were two aspects of the same right.
The ECJ pointed out that financial compensation in case of termination of employment by the
employee’s death was essential to ensure the effectiveness of the entitlement to paid annual
leave. The imponderable time of death should not lead retrospectively to complete loss of the right
to paid annual leave. Finally, the ECJ decided that entitlement to the payment in lieu was a direct

2.
result of the law and should not depend on the interested party (in this case the worker’s widow)
making an application.
Implications for employers
For future cases, it is now clear that if a worker has accrued but untaken annual leave entitlement
at the time of his or her death, the estate is entitled to a payment in lieu in respect of the
outstanding leave. Therefore, employers should be prepared for the heirs of deceased employees
making claims in similar circumstances. The entitlement will, however, depend on heirs bringing
their claim within the relevant time limit set by national law, the individual’s contract or an
applicable collective bargaining agreement.
Taken from the Ius Laboris Knowledge Base: www.globalhrlaw.com
About Ius Laboris
Ius Laboris is an alliance of law firms offering employers cross-border employment and pensions
law advice. It has 1,300 specialist HR lawyers in over 150 cities and 44 countries. Ius Laboris
offers access to the best local HR law experts in one global team with 20% more ranked
employment lawyers (Chambers & Partners, November 2013) than any other global HR legal
services organisation. Further, Ius Laboris has 50% more recommended lawyers than its nearest
rival in a recent survey in PLC's employment law guide. Clients include many household names as
well as multinational companies in all sectors ranging from energy, retail and technology to
pharmaceuticals. For more information on Ius Laboris, please visit iuslaboris.com.