BAG clarifies in new decision: Three-year limitation period for vacation compensation remains

As a result, many employers feared a flood of outstanding compensation claims from employment relationships that had already ended. The Federal Labor Court has now provided more clarity with its most recent decision of 31.01.2023, case reference: 9 AZR 456/20, and ruled that the limitation period of three years continues to apply to claims for leave compensation after the employment relationship has ended. For old cases, however, this period will only begin to run from the start of 2019:

In its decision, the BAG clarified that vacation compensation claims for terminated employment relationships are still subject to the statutory limitation rules. According to the BAG, the fulfillment of the obligation to cooperate is irrelevant. This was justified by the fact that the entitlement to vacation compensation merely represents financial compensation for the vacation and does not serve the purpose of recreation. The weaker position of the employee, from which the employee's need for protection when taking leave is derived, ends with the termination of the employment relationship.

In its ruling of the same day (Ref.: 9 AZR 244/20), the BAG immediately confirmed this case law and clarified that claims for vacation compensation after termination of the employment relationship are also subject to collective bargaining exclusion periods, even if employers have not complied with their duty to inform.