How to use remaining vacation in a termination agreement advolaw labor law

Utilize remaining leave in the termination agreement – here's howYou should use the remaining leave in the Termination agreement make sure that your Residual leave paid out. Otherwise, you may be foregoing cash. We explain how you can best utilize your vacation entitlement.

Contents

1. Forfeiture of remaining vacation after a termination agreement?

Conclude a termination agreement, thus ending the employment relationship. Residual leave that you can no longer take is then to be paid to you. So you receive money for each open day of vacation. Your vacation entitlement therefore does not automatically expire after a termination agreement.

Attention: there is still a big risk that you involuntarily give up your remaining leave in the termination agreement.

Therefore, you should avoid these three dangers in particular:

– Do not sign any settlement or discharge clauses without first speaking to an employment law specialist. You otherwise waive all your claims. Thus also on the payment of your remaining leave. – If you are released from work before the end of the contract, the employer may use this time if necessary. Offset against your remaining leave. You should prevent this. – Calculate exactly how much remaining vacation you are entitled to and record this in the termination agreement.

We offer you a competent initial assessment at a flat fee of € 190.00 plus. VAT. to.

If, after an initial consultation, you wish to instruct us to take on your case, we will of course discuss the costs to be expected and the possibility of costs being covered by legal expenses insurance or by the employer with you prior to mandating us to do this.

2. When do I have to take my remaining vacation before the end of my contract??

Even after signing a termination agreement, you still have to take your remaining vacation "in kind" during the remaining time in the company. So the law wants you to actually take time off. A payout comes only under the u.g. conditions are met.

If your employer therefore sends you on vacation after you have signed the agreement, these vacation days are thus generally forfeited. However, you are not obliged to proactively approach the employer and ask for the vacation to be utilized. If you are not released from work. Therefore, you must continue to work even during the phase-out period. If your employer sends you on vacation during this time, these vacation days are generally lost. If you are released from work. your employer sends you on vacation at the same time. Since you already have time off because of the leave, this only has the effect of offsetting your vacation days against your leave. This can be prevented by explicitly excluding the offsetting of vacation and time off in the termination agreement.

TipYour employer is in principle entitled to grant you leave unilaterally during the phasing-out period. You can therefore also be "sent on vacation against your will". Your employer can even specify the period of leave if this is the only way to ensure that the leave is actually taken. An exception applies only if the determination of the new vacation period would be "unreasonable" for you. However, there are high requirements for this – the financial disadvantages due to a cancellation of the vacation are not sufficient.

The reverse is not true: you may not take the leave without your employer's consent. Taking leave on your own authority may even be grounds for extraordinary termination of employment. However, vacation requests must be approved unless "urgent operational concerns or vacation requests of other employees who deserve priority from a social point of view conflict with them" (§ 7 para. 1 Federal Vacation Act). Your employer must therefore be able to give good reasons for rejecting your request for vacation.

3. When can I have residual vacation paid out?

You are entitled to payment of vacation days at least if you were unable to take your remaining vacation before the end of your employment (§ 7 para. 4 BUrlG). According to convincing legal opinion, it is sufficient that you are still entitled to vacation days after your last working day. Whether or not you have previously made an effort to use them as real vacation is irrelevant.

In the case of a termination agreement, this will often be the case. In many cases, the employment relationship is to be terminated at short notice, so that an early termination is agreed and you no longer take your vacation in kind.

Example: You conclude an agreement with your employer on 24.10. a termination agreement stipulating that the employment relationship will end as early as on 31.10. ends. You still have 15 days of remaining vacation. In the remaining period you will not be able to take all your remaining leave. The remaining vacation days will therefore be paid off.

In many cases, your employer will also no longer grant you leave due to urgent operational needs. For example, because you need to train a new employee or complete important projects. In these cases, you can also demand payment of your vacation days.

Even if you take leave without counting it towards your vacation, you may still have vacation days left over. In this case, you can also demand payment of the vacation days if you were no longer able to take it.

4. How much remaining vacation am I entitled to?

You have a statutory right to minimum leave per year. The exact number of your vacation days is calculated according to the number of working days per week. You are entitled to four days' vacation for each day worked per week.

– Example 1: If you work five days a week, you are entitled to 20 days of leave. – Example 2: If you work three days a week, you will have 12 days of vacation.

Of course, you may be entitled to additional vacation days by labor or collective bargaining agreement.

TipIt may be worthwhile to delay the termination date in the termination agreement. If you leave the company only in the second half of the year (i.e. from 1.7.), you have the full vacation entitlement. Something else only applies if your employment contract or collective bargaining agreement expressly provides for deviations. If, on the other hand, your employment ends already in the first half of the year, the vacation entitlement is calculated on a pro rata basis. You are then entitled to as many twelfths of the annual leave as the employment relationship lasted full months in the year. For example, if you leave the company at 30.6. from the company, you are entitled to 6/12, i.e. half of the annual leave, for the six full months of existence – for the 5-hour week, this would be ten days of leave.

If you conclude a termination agreement with your employer during the course of the year, you may not yet have used up all your annual leave. You therefore still have a "residual leave" before the employment relationship ends. Since a termination agreement is usually intended to end the employment relationship without a long notice period, this is often the case.

Example: In March, you conclude the termination agreement with your employer and agree that the employment relationship is to end in August. You have already taken five days of vacation in January at this time. You would have actually wanted to use the remaining 15 days in November.

5. How much do I receive per paid vacation day?

After you have determined the number of your open vacation days, it is now interesting to know how much you receive per vacation day. The calculation of your vacation allowance is based on § 11 BUrlG. According to this, the following procedure is to be followed:

– You multiply your average monthly gross income for the last three months by 3. You will find out in a moment which payments have to be taken into account in detail. – Now multiply this value by the number of your open vacation days. – Divide the result of this calculation by the number of your usual working days in the last 13 weeks (i.e. factor 65 for a five-day week). Whether you actually worked, were sick, or holidays fall within the reference period is irrelevant.

The amount calculated in this way results in the vacation compensation to which you are entitled in gross terms. However, you will have to pay social security contributions and taxes on this amount.

In the average monthly earnings are to be considered:

– Your normal, regular salary – standby pay – supplements for shift work, etc. – Allowances

On the other hand, it is not included in the calculation:

– Overtime pay for the last 13 weeks – Vacation pay – Christmas pay – Bonus

6. What applies to vacation entitlement when you are on leave of absence?

In practice, your employer will often give you time off after concluding a termination agreement. The leave can also already be agreed in the termination agreement. With a leave of absence, you no longer have to show up for work. You can take care of the search for a new job. Without leave of absence, on the other hand, even during the phase-out period between conclusion of the termination agreement, you must. Termination of the employment relationship continue to show up for work. Whether this occurs depends on the individual case – there is no entitlement to leave of absence. During the leave of absence, you will generally continue to be paid unchanged.

Tip: As a rule, you do not have to worry about any effects on your social security due to the leave of absence. According to the opinion of the Federal Social Court, the employment relationship "ends" only with the agreed expiration, but not already with the leave of absence. Even during a leave of absence, your statutory health, nursing care, pension and unemployment insurance thus continues to exist.

If you are released from work by your employer during the phase-out period, the question arises as to whether your remaining leave is also used up as a result. In other words: If the leave of absence is credited against the remaining vacation days?There is no generally valid answer to this question – whether an accrual is made varies from case to case. The leave of absence alone therefore does not yet lead to the consumption of the remaining vacation time. Is also not to be understood automatically as vacation granting. However, under the following two conditions, your vacation will be counted towards the leave of absence:

– In the termination agreement it was expressly agreed, that your vacation is also compensated with the release from work. It should be noted that the crediting cannot be agreed retroactively. So if you were given paid time off for the phase-out period and your employer notices after the termination of the employment relationship that there are still vacation days left, your employer is basically out of pocket. Remaining vacation days must then be paid out to you. – This exemption is irrevocable. In the case of a revocable leave of absence, the employee retains his vacation entitlements according to the opinion of the Federal Labor Court, so that these must be compensated financially when the employment relationship is terminated (cf. BAG, ruling dated 14.3.2006 – Az. 9 AZR 11/05).

7. Can I inadvertently waive my vacation entitlement in the termination agreement??

Yes, a termination agreement often contains a "settlement and discharge clause" such as

"The parties agree that upon execution of this agreement, all mutual claims arising from the employment relationship and its termination, known or unknown, are settled."

You cannot effectively waive your vacation yourself. So even if you sign such a clause, you still retain your vacation entitlement.

But beware: This applies without restriction only to your statutory minimum leave (§ 13 BUrlG). Your contractual additional leave may be lost per completion clause. In addition, such a clause will be your undoing if you want to have your remaining vacation paid out after the end of the employment relationship. You can very well effectively waive this purely monetary claim. Lastly, a note: Be careful with a settlement-. Settlement clause always careful. Such a formulation is extremely broad. May have unexpected consequences for you. Before signing such a clause, you should therefore always consult with your specialist employment law attorney.

8. Forfeiture of leave approved for the period after the departure?

In some cases, your employer has already approved your vacation well in advance. If you now unexpectedly conclude a termination agreement before your vacation, the question arises as to whether your vacation days are forfeited.

Of course, you are still entitled to your vacation. Since the vacation would fall in a period when you are no longer working for your employer, the determination becomes moot. You therefore retain your vacation days. Can "redistribute" it. If you are no longer able to actually take the vacation or to count it towards a leave of absence, the vacation days will be paid out.

If your vacation request relates to a period between the signing of the termination agreement and your last day of work, you will of course continue to have time off as requested.

Conclusion

– With a termination agreement, your remaining vacation does not automatically expire. However, there is a risk that you may unintentionally waive your vacation entitlement. – In principle, vacation can and must be taken "in kind", i.e. as actual vacation. – Residual leave can also be paid out if you are no longer able to take it due to the termination of your employment relationship – especially in the case of short-term termination agreements and many days of residual leave, a payout can be considered. – You are generally entitled to four days of minimum statutory leave for each day worked per week. Often, your employer will pay you for the period between the conclusion of the termination agreement and the end of the employment relationship. End of employment leave from work. The leave will only be credited against remaining vacation days if crediting is agreed in the termination agreement and it is irrevocable. – By means of a compensation and settlement clause in the termination agreement, the employee waives almost all claims arising from the employment relationship. In individual cases, this may also affect claims in connection with the remaining leave. – Already approved leave taken for a period after the scheduled end of your employment does not expire. It must then be taken or paid out before the end of the working relationship.

We advise you. Attorney Georg Gradl is an expert in termination agreements. Experienced specialist lawyer for labor law. Feel free to send us your questions by e-mail or give us a call.

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