German Courts Reshape Holiday Rules: What Employers Must Know Now
Published on 08/01/2026 at 07:31 | Redaktion boerse-global.de
The summer holiday season has become a legal minefield for German employers. A series of court rulings and new collective agreements are forcing organisations across the church, public service and broadcasting sectors to rethink how they handle vacation time, sick leave and post-termination arrangements.
At the centre of the shift is a landmark decision from the Thuringia Regional Labour Court. On 2 March, judges struck down a blanket cap that limited summer holidays to two weeks. The ruling makes clear that annual leave must generally be granted as a continuous block — and that staffing shortages cannot justify across-the-board restrictions.
New framework for church and social services
The Labour Law Commission of the regional church and Diakonie in Württemberg published a revised model works agreement on 26 May, designed to give institutions a legally watertight structure for allocating holiday entitlements. Supplementary resolutions followed on 8 May and 10 July. Already in December 2025, the church had adopted adapted versions of TVöD regulations into its own employment ordinance (KAO).
The legal foundation remains the Federal Holiday Act: 24 working days for a six-day week, 20 for a five-day week. But the new agreement also reflects recent case law on employer notification duties. If companies fail to warn staff in good time that their leave is about to expire, those days no longer lapse.
Sick leave and termination clauses under scrutiny
Employees who fall ill during their holiday for three or more days can reclaim those days as credit. The situation differs for compensatory time off — illness does not typically interrupt an agreed period of leave used to reduce overtime balances. In such cases, the time credit is still consumed.
The Federal Labour Court delivered another significant ruling on 25 March (case reference 5 AZR 108/25), declaring that release-from-work clauses following a notice of termination are invalid when they undermine the employer's obligation to provide work without a specific, legitimate interest being demonstrated.
Deadlines and pay changes on the horizon
Staff covered by TVöD provisions should note an upcoming deadline: until 1 September, they can convert part of their Christmas bonus into up to three additional days off. One free day corresponds to roughly 5.4 percent of the annual special payment. From 2027, a general additional leave day will be introduced.
The Westdeutsche Rundfunk broadcaster reached a collective agreement in late July. Pay will rise in three stages, starting with 1.23 percent backdated to 1 February. Trainees gain an extended guarantee of employment after their apprenticeship plus an extra holiday day.
Academic sector and apprenticeship reforms
The federal cabinet approved a draft bill on 29 July to modernise the law governing fixed-term contracts in academia. Minimum contract durations for initial appointments and improved compatibility of career and family life are the main priorities. Third-party-funded positions are also set to receive family-policy instruments.
Apprenticeship pay rises in 2026: the minimum training allowance for the first year will be €724 per month. Parents of trainees under 25 remain eligible for child benefit.
Not everyone is satisfied with current arrangements. In Baden-Württemberg, the Education and Science Workers' Union (GEW) has criticised the fact that around 4,000 trainee teachers were dismissed into unemployment without pay at the start of the summer holidays. Ensuring continuous payment throughout the holiday months would cost public budgets an estimated €11.5 million.
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