OGH: No full holiday compensation for resignation without cause after all?

Published on 09. August 2022

The Austrian Supreme Court (OGH) (9ObA147/21i; 8ObA95/21k; 8ObA37/22g) has clarified for Austrian law the decision by the ECJ that caused a stir (C-233/20, job-medium GmbH, NewsMonitor Episode 14), according to which compensation for unused annual leave is payable even if the employee terminates the employment relationship without cause: in the event of a resignation without cause, the holiday compensation is only available (pro rata) for up to four weeks of leave per holiday year. 

The Austrian Supreme Court has reached this decision based on the principle of the primacy of Union law. While four weeks of paid leave are guaranteed under Union law (Article 31(2) CFR and Article 7(2) of Directive 2003/88/EC), the Austrian Leave Act (UrlG) provides for an entitlement to five weeks of paid leave. The national legal situation thus goes beyond the minimum entitlements required under Union law. However, according to the ECJ, the protection afforded by Union law in the event of an early resignation without cause only covers the holiday entitlement guaranteed by Union law, i.e. four weeks per year. Therefore, the holiday compensation in the event of an early resignation without cause relates to just four and not five (or six) weeks of leave. This means that, for any holiday entitlement in excess of four weeks per year, there is no holiday compensation in the event of an early resignation without cause (Section 10(2) UrlG).

Any employees who resign without cause are entitled (pro rata) to holiday compensation for four weeks per holiday year of unused leave, but not for any time beyond that.