Leave à la carte - trust leave put to the test

January 2022 · Estimated read time: mins

Zwischen Kontrolle und Vertrauen: Chancen und Risiken der Flexibilisierung von Urlaub

At vangard | Littler, we expect that even once the immediate consequences of the pandemic have been overcome, everyday working life and the employment relationship will not return to the "normal state" that existed before the pandemic. Rather, the world of work will have changed permanently, and employers will no longer be able to avoid accommodating the need for "more flexibility in working life." One form of flexibilization could be “trust leave”.


Instead of granting employees a certain number of vacation days through their employment contract, as is usually the case, it is left up to them to decide when and how much vacation they take within a year. If employees can determine the volume of their leave themselves, this is a balancing act between trust and control for employers. This presents both opportunities and risks. What options are there for making vacation more flexible and attractive - in the spirit of New Work?


Legal "must-haves" for the employment contract

However, before thinking about making vacation more flexible, it is first important to keep in mind which statutory minimum entitlements must remain untouched in any case: The statutory minimum vacation entitlement under the Federal Vacation Act (BUrlG) of 24 days for a 6-day week or 20 days for a 5-day week must not be undercut. To ensure this, it is advisable to include a corresponding minimum number of vacation days to be taken in the employment contract. It should also be stipulated there that the vacation taken is to be credited with priority to the statutory vacation entitlement. Finally, employers should not refrain from comprehensively documenting vacation periods in order to clarify the social insurance situation, e.g. with regard to accidents at work.


Opportunities and risks of the confidential leave

Employees are given a considerable boost of confidence by structuring their leave in this way. But what are the specific opportunities and risks of introducing trust leave?


The opportunities can only be assessed if we consider the purpose of the leave, which is to recuperate as well as to protect the employee's health in order to restore performance.


1) Relaxed employees are satisfied employees, who statistically take less sick leave and are less likely to leave the company.

2) Furthermore, the trust factor can lead to a strengthening of the relationship and a higher level of identification with the company and have a positive effect on work motivation.

3) Word gets around about a practice that is popular with the workforce, which can generate positive publicity for the company. This in turn can have a positive impact on the recruitment side.

4) The employer can be relieved by spending less effort on planning and approving leave. Cooperation among work groups plays a major role in this. They need to organize who takes vacation and when, so that the team remains able to work. Vacation days can therefore generally be taken without further approval from superiors due to the staff's own responsibility.


On the risk side

1) Negotiations with the works council may become necessary due to a right of co-determination.

2) As is so often the case with the flexibilization of work processes, the possibility of abuse also resonates, as the trust placed in the company can be exploited.

3) In fact, there is also a risk that employees will take less leave than before. They may feel they have to work more to avoid the impression that they are not working properly. However, the behavior in this regard depends on the individual character, so against this background, the personal situation in the company should be evaluated as to how high the risk is for taking less vacation.  

4) In addition, concerns may arise that the vacation days taken are, for example, a basis for bonus compensation for the employer and thus take fewer vacation days in order not to put the professional career in jeopardy.

5) In addition, it may be advisable to create a policy on trust leave to ensure an orderly workflow. However, this may take time and effort.


Balance between trust and control

As attractive as the opportunities presented for the introduction of trust leave are, employers are also afraid of the misuse of this institute. In order to prevent this, there are a number of possible arrangements. This can be done in particular by setting limits to the freedoms associated with trust leave.


In terms of time, this can be done by specifying a maximum number of vacation days per year in addition to the minimum number. Likewise, the number of vacation days taken at a stretch can also be limited in order to rule out the possibility of a month-long absence. Such a regulation should then be flanked by a specification of minimum intervals between the individual vacation blocks. In this way, constant alternation between periods of presence and absence can be avoided. This is particularly important if the activity requires a certain degree of continuity - for example in customer support or within projects.


Limits can also be set in procedural terms: If theoretically all employees can take vacation at any time, then there is also a risk that this will happen at the same time - especially around public holidays or on bridge days. To prevent sudden understaffing, a certain notice period can be specified here. If the announcement is also in text form (e.g. e-mail), it is also easier to track who is going on vacation and when. In order to prevent ill will within a team, it is also advisable to make it compulsory for colleagues to consult with each other and to hand over tasks or current projects accordingly.


What else to consider 

In connection with the granting of trust leave, there are further implications that need to be considered. This applies, for example, to continued payment of wages in the event of long-term illness. If employees can take leave for as long as they wish, they can also extend the period of continued payment without any de facto limit. In the case of terminated employment relationships, there is also a risk that employers will no longer have the planning security intended by the notice periods. With regard to the settlement of vacation entitlements after termination of the employment relationship, the question also arises as to how many days this entitlement relates to. In companies with a works council, the corresponding right of co-determination must also be observed.


Which regulations are right is entirely up to the individual company. In view of the large number of possible consequential problems, it is therefore advisable to obtain tailored advice prior to introduction.

Subscribe to our newsletter