Unilateral ordering of leave by the employer

As a result of the Covid-19 crisis and the associated lockdown, many companies have tried to absorb the decrease in work this spring with various measures. Leave entitlement was often used before furloughing employees. This was motivated not only by a wish to create the conditions for state support through seasonal furlough allowances or to enable childcare; the aim was for employees to avoid taking leave entitlement during the ‘restart’ period, i.e. when the order books and workload situation were expected to improve again. Today, given the exponential increase in the number of infections, there may be another, albeit modified, lockdown. Companies are therefore increasingly wondering (again) whether existing leave entitlement can be used to absorb a decrease in work. In particular, the main consideration is whether employers can order leave unilaterally, even contrary to the employee’s wishes. This can be assumed to be the case for a coronavirus-related decrease in work, subject to the following conditions.

1. Statutory guidelines for granting leave

At first sight, the German Federal Leave Act (Bundesurlaubsgesetz – BUrlG) does not provide a clear answer: in the first sentence of section 7(1) of the Act, the employer must take account of the employee’s wishes when fixing the dates of leave, unless it is contrary to urgent business concerns or to the leave wishes of other employees deserving priority from a social point of view.

The employer must therefore take account of the employee’s wishes for leave when specifying the dates of leave. It can only go against the employee’s wishes if urgent business concerns or the holiday wishes of other employees stand in the way. The central question is therefore whether the current pandemic is a ‘business concern’ if leave preferences are known (for example, when a request for leave has been made).

2. Taking account of the employee’s wishes to take leave

However, this is irrelevant where no request to that effect has been expressed and the period of leave has been fixed unilaterally by the employer. In that case, the leave is effectively granted if the employee ‘accepts’ the unilateral determination (Federal Labour Court judgment of 22 Sept 1992, 9 AZR 483/91). The employee does so if he/she does not immediately, i.e. without culpable delay, inform the employer that he/she does not accept the unilateral determination (Federal Labour Court, judgment of 6 Sept 2006, 5 AZR 703/05). According to the case law of the Federal Labour Court, it would be an abuse of law (section 242 German Civil Code) if the employee does not initially respond to the holiday order and subsequently puts forward an alternative wish to take leave.

Whether such an ‘objection’ is deemed to be raised without delay will depend on the circumstances of the individual case. If a sufficiently long advance notice period has been observed by the employer, the right to object expires at the latest when the employee’s actual leave starts. It is, however, correct to apply the principles developed by the Federal Labour Court on the rejection of dismissals under section 174 German Civil Code. According to that, an objection made more than one week after the unilateral allocation of leave is no longer deemed to be without delay and therefore irrelevant (cf. Federal Labour Court, judgment of 5 Dec 2019, 2 AZR 147/19).

3. Unilateral leave order by the employer contrary to the employee’s wishes – Timely objection by the employee

The question of whether the employer may unilaterally determine leave contrary to the employee’s known wishes has not been conclusively clarified in the case law and legal literature.

• Some courts and legal authors have answered this question in the affirmative by making reference (which reference might be challengeable, though) to the wording of the first sentence of section 7(1) Federal Leave Act if there are urgent business concerns in favour of taking the leave during the period indicated by the employer. In any event, this argument is supported by the purpose of the provision. In fact, the ultimate purpose of the first sentence of section 7(1) Federal Leave Act is to strike a balance between the interests of the employer and those of the employee. Granting the employer merely a right to object to the employee’s wishes is not enough. However, in order for a unilateral leave order to be issued contrary to the employee’s wishes, the employer must demonstrate that there are particularly important business concerns.
  
  
• It is not clear that a decrease in work due to the pandemic is sufficient. On the contrary, it is argued that the employer bears the risk of not being able to employ individual employees in the absence of work (sentences 1 and 3 of section 615 German Civil Code). However, sentences 1 and 3 of section 615 German Civil Code are applicable only if the employee was under an obligation to work at all. But that is not the case here. After all, granting leave cancels out the obligation to work during the period of leave. The question of granting leave therefore precedes section 615 German Civil Code. During leave, employee receive holiday pay and therefore do not suffer any financial disadvantage. It is true that the risk allocation in sentences 1 and 3 of section 615 German Civil Code cannot be ignored in the law on leave, either. What matters, however, is a balancing of interests between the individual leave wishes of the employee and the employer’s business concerns. In extreme situations, the employee must also contribute to the survival of the company. Thus, during the pandemic, it may well be admissible for the employer to order leave unilaterally. The decisive factor is whether predominant business concerns exist.
  
  
• If this cannot be reliably assessed, an alternative may be to order company-wide holidays. We will address that topic in our next article.