Working-Life > Vacation > Closedown

Company Closedown or Company Holidays: Legitimate when Operationally Necessary

Definition, Explanation

A possible way of employers to cope with bad order situations is, besides cutting temporary work and working time accounts, reducing working hours, the imposing of company holidays which implies for the employees forced vacation, forced leaves. In that case, the whole or parts of the company are closed down for a period of time. Legal requirement are urgent operational necessities, e.g. the company being seriously affected by an economical crisis.

The forcing thing about company holidays, or forced leaves, is that the days off are subtracted from employees' vacation days or working time accounts. So the employees' vacation planning can become an almost completely imposed one. The employees must be left a reasonable number of vacation days to deliberately decide when to take. There are, however, no explicite numbers given by jurisdiction.

If an employee's vacation is already planned, he must accept an unpaid leave or a compromise of additional vacation days with lesser remuneration. If the vacation has already been granted, then the forced leave will be a paid exemption due to work shortage. This is a risk born by the employer.

During company holidays, the salaries and the social insurance contributions are paid on. No shift-, overhours- and piecework bonuses. An unpaid forced leave is illegal, unless an employee agrees to it.

If the orders shortage is not successfully alleviated by the company holidays, what remains to be tried is short work.

Tips, Checklist

• Employers must justify forced leaves by operational necessities
• If there is a works council, they co-determinate the dating and the duration of forced leaves
• If working hours are defined in employment contracts, cutting can only be done via dismissals, that is dismissals for operational reasons, or dismissals with altered conditions of employment
• Leaves should possibly be designed as a continuous period, at least 10 work days in a row

Last update: 09/18/2009