Vacation payout after termination is a statutory claim that employees are entitled to when they can no longer take their vacation because the employment relationship ends. Many employees do not know, however, how to calculate and enforce this claim. A recent ruling by the Regional Labor Court of Rhineland-Palatinate shows what matters – from calculation to burden of proof.
Vacation Payout After Termination: What Is It and When Do You Have a Claim?
Vacation payout is the financial compensation for vacation days you have not taken by the time your employment relationship ends. The claim arises when the employment relationship ends and you still have unused vacation. This can happen with an ordinary or extraordinary termination, but also with a termination agreement. The key point is that the vacation must not have been forfeited – more on that later.
The statutory claim derives from Section 7(4) of the Federal Vacation Act (BUrlG). Under this provision, vacation must be paid out if it can no longer be granted in whole or in part because the employment relationship has ended. This means you have a right to payment even if you resigned yourself or the employment relationship was ended by mutual agreement.
However, there is an important limitation: The claim exists only for vacation days that were actually not taken and have not been forfeited. Whether forfeiture has occurred depends on several factors, which we will examine below.
The Case: Truck Driver Sues for Vacation Payout – What the Court Decided
In the decided case, a truck driver was employed by a company from July 2021 to August 2022. His employment contract provided for 24 working days of vacation per year. After his termination, he demanded payout for 24 unused vacation days. The employer had already paid a partial amount of 294.54 euros net but disputed that the plaintiff was entitled to so many days.
The Labor Court of Ludwigshafen partially upheld the claim. On the plaintiff’s appeal, the Regional Labor Court of Rhineland-Palatinate awarded him an additional 337.32 euros gross but dismissed the remainder of the claim. The court clarified that the employee must prove the untaken vacation days – a point often underestimated in practice.
Also noteworthy is the temporal component: The plaintiff initially sued for only 14 days and later expanded the claim to 24 days. The court had to examine whether the expansion was admissible and whether the claim existed for the entire year. Ultimately, it awarded only a partial amount because the plaintiff could not prove for all days that he had not taken vacation.
The Legal Basis: Section 7 BUrlG and Payout of Untaken Vacation Days
The Federal Vacation Act stipulates in Section 7(2) that vacation must be granted and taken in the current calendar year. Only for urgent operational or personal reasons can it be carried over to the following year. In that case, however, it must be taken by March 31 of the following year, otherwise it is forfeited – provided the employer has properly warned about the forfeiture.
Section 7(4) BUrlG governs the payout: If vacation can no longer be granted because the employment relationship has ended, it must be paid out. The payout is therefore not a voluntary benefit by the employer but a statutory claim. However, this claim applies only to vacation days that were actually not taken and have not been forfeited.
In the case at hand, the plaintiff had a gross monthly salary of 2,435.84 euros. The court therefore had to determine how many vacation days were actually still open. Because the plaintiff could not prove for all days that he had not taken vacation, the court awarded only a partial amount.
How to Calculate Your Vacation Payout: Gross Salary and Vacation Days
The amount of the vacation payout is based on your gross earnings. As a rule, the average daily earnings of the last 13 weeks before the end of the employment relationship are used as the basis. This value is multiplied by the number of outstanding vacation days. When calculating your vacation payout after termination, you should therefore include all supplements, commissions, and other remuneration components.
An example: If you earned a total of 10,000 euros gross in the last 13 weeks and had 20 working days per month, this results in a daily earnings of approximately 38.46 euros (10,000 euros / 260 working days). With 10 outstanding vacation days, the payout would amount to roughly 384.60 euros. Note that this amount is still subject to tax and social security contributions.
In the case at hand, the plaintiff had a gross monthly salary of 2,435.84 euros. The court therefore had to determine how many vacation days were actually still open. Because the plaintiff could not prove for all days that he had not taken vacation, the court awarded only a partial amount.
Note: The exact calculation can be complex, particularly if variable remuneration components or special payments play a role. In case of doubt, you should consult a specialist lawyer for labor law.
What You Must Watch For: Forfeiture of Vacation Entitlements and Burden of Proof
A frequent point of dispute is the forfeiture of vacation entitlements. According to the case law of the European Court of Justice, however, the vacation entitlement is protected if the employer has not warned about the forfeiture in good time. Since 2019, employers must actively inform their employees that unused vacation will be forfeited. Without such a warning, the vacation does not lapse automatically even after March 31.
The burden of proof generally lies with the employee: They must demonstrate that they did not take the vacation. The employer, in turn, must document when vacation was granted. In the case at hand, the plaintiff apparently could not credibly establish all days, which led to a partial dismissal. You should therefore keep your own records of your vacation days and retain vacation requests and approvals.
Another point is the time limit for asserting the claim: Contractual or collective-bargaining exclusion periods can shorten the claim. Check therefore whether your employment contract or collective agreement provides for such deadlines. Often they amount to only a few months after the end of the employment relationship.
Vacation Payout and Severance: Two Separate Claims
Many employees confuse vacation payout with a severance payment. Both claims can, however, exist independently of each other. While the vacation payout is based on statutory grounds, a severance payment is a contractually agreed or comparatively arranged payment. It is often paid in a termination agreement or as part of an unfair dismissal proceeding. If you want to know more about severance payments, our guide Severance After Termination provides a comprehensive overview.
It is important to view and enforce both claims separately. A severance payment generally does not replace the vacation payout unless the termination agreement expressly provides otherwise. Examine every contract carefully before you sign it.
Conclusion: With These Steps You Secure Your Vacation Payout
If you want to claim your vacation payout after termination, you should act quickly. First, determine your outstanding vacation days based on your employment contracts and vacation records. Then submit a written demand to your employer and set a deadline for payment. If they do not comply, you can file a claim with the labor court.
Pay attention to the collective-bargaining or contractual exclusion periods, which often amount to only a few months. If you are unsure whether your claim exists or how to enforce it, you should consult a specialist lawyer for labor law. You can read about the costs of an unfair dismissal claim in our article Costs of an Unfair Dismissal Claim. For financing a lawsuit, a litigation funder like RechtStark may be an option, covering the costs if you win. Further information on the unfair dismissal claim is available on our overview page Unfair Dismissal Claim: Everything You Need to Know.
Do not hesitate to assert your rights – the vacation payout is a statutory claim to which you are entitled. With the right steps and good preparation, you can successfully enforce your claims.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.