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Restrictions on curtailing vacation for parental leave periods

The Federal Labor Court (Bundesarbeitsgericht) ruled on 19 May 2015 (docket number: 9 AZR 725/13) that an employer is not allowed to curtail the employees vacation entitlement due to parental leave once the employment relationship has ended.

In general, the employer is allowed to curtail the employee’s vacation entitlement for the calendar year by one twelfth for every full calendar month of parental leave; however, the vacation entitlement is not curtailed by virtue of law, an explicit declaration of the employer is necessary. According to this new judgement, the employer has to declare this during the existing employment relationship, not after the end of the employment relationship when the employee claims compensation for untaken vacation.

With this new judgement, the Federal Labor Court has explicitly overturned its own long-standing practice that an employer can declare the curtailment even after the end of the employment relationship.