According to Art. 7 Para. 1 of the Working Time Directive 2003/88/EC, employees are entitled to a minimum of four weeks’ paid annual leave. Austrian labor law goes beyond the requirements of EU law by providing for an annual leave entitlement of at least 30 working days in accordance with Section 2 (1) UrlG. According to the Austrian Vacation Act (UrlG), vacation entitlement must generally be taken in the year in which it was taken. However, an accumulation of vacation days is permitted. According to § 4 Para. 5 UrlG, vacation entitlement only expires two years after the end of the vacation year in which it arose. Employees therefore have a total of three years to use up their vacation. Used vacation days are always deducted from the oldest outstanding vacation. The ECJ has ruled (once again) that unused vacation can only become time-barred if the employer warns the employee in good time of the impending expiry of vacation entitlement and also enables the employee to take this vacation.

And the Supreme Court also recently ruled that vacation compensation claims of a certain amount cannot expire if the employer does not ensure that the vacation is used up in good time.

This means that people who have terminated an employment relationship without having used up leave from previous years now have the chance to receive late compensation payments. The Supreme Court thus ruled in favor of a dismissed gamekeeper.

The successful plaintiff had been employed as a gamekeeper since 2003 and later also as an estate manager. He was on duty almost constantly seven days a week and used only 121 of the 444 days of vacation to which he would have been entitled. Although he was always granted time off when he needed it, he saw no possibility of taking more time off without jeopardizing the operation of the estate due to a lack of qualified substitutes.

When he was dismissed at the end of 2020, he only received compensation for the vacation time he had not taken in the last three years: EUR 9131.53. The Higher Regional Court of Graz, on the other hand, awarded the plaintiff compensation for a further 180 outstanding vacation days (EUR 24,260.89), citing the decision of the ECJ (C-120/21). The Supreme Court also confirmed that the employer had a duty to request and inform.

The first defendant had neither urged the plaintiff to use up his leave nor informed him of the impending limitation period and thus breached its obligation, now laid down by the ECJ, to ensure that the plaintiff actually took his annual leave.

This prevents the limitation of the leave entitlement guaranteed under EU law in accordance with Art. 7 Para. 1 of the Working Time Directive 2003/88/EC. The annual leave guaranteed under EU law is 4 weeks. The leave entitlement in excess of this under the UrlG was subject to the statute of limitations. The plaintiff was therefore awarded a total of EUR 33,392.42 net sA in vacation compensation.

This duty to warn will now – contrary to the decision of the Supreme Court of 29.08.2019 on 8 ObA 62/18b – also apply to employers in cases of bogus self-employment, which will also lead to the vacation (replacement) claim under EU law becoming time-barred.

In any case, employers are advised to ask their employees to use up their leave in good time, to inform them of the limitation period and to document this.