Leave of absence

In labour law, leave of absence is defined as a unilateral order by the employer or an amicable agreement between the employee and the employer to release the employee permanently or temporarily from the obligation to perform his or her work.

If the leave is granted at the employee’s request without the employee being legally entitled to it, it is usually unpaid. In insolvency proceedings, the temporary insolvency administrator/provisional cover pool administrator will, in consultation with the management or the insolvency administrator/cover pool administrator, grant unpaid release if payment of the fees will not be possible.

We have collected the most frequently asked questions here.

Can I be exempted from performing my work as part of insolvency proceedings?

Yes, this is possible at any time in the insolvency proceedings.

Is an exemption a dismissal?

A leave of absence is not a termination of the employment relationship, but releases you from the obligation to perform the work.

Will my holiday entitlement or overtime account be used up during the leave?

Yes, as a rule, the leave is arranged taking into account leave and overtime. However, the offsetting must be expressly referred to in the exemption. Also, the exemption for the period of offsetting can only be irrevocable, so that you can dispose of this time. For the time after leave and overtime have been taken, the leave can also be revocable, i. e. you may have to be available during this time. The right of disposition is incumbent on the employer (in the event of insolvency with external administration, the insolvency administrator), who can order the taking of leave and overtime.

What if I have already planned holidays during the leave period?

You should draw the insolvency administrator’s attention to this. In most cases you can certainly start your holiday. It is important that you inform the benefit office when you receive a benefit. However, you may not be on holiday on the day on which you apply for the benefit; if necessary, talk to your employer or the insolvency administrator about being ordered back from holiday for this day.

If there is a works council, does it have to agree to an exemption?

An irrevocable exemption may already be a change of operation. A works agreement on a reconciliation of interests must be concluded with the works council before any blanket exemptions can be granted.

If a works council is in place and it is not prepared to settle a balance of interests because of the change of business, can there be disadvantages for me?

The claims in the indemnity, even if the payment settlement for it does not take place directly, are undisputed, provided that the indemnity does not take place at the employee’s request. However, in such a case only a revocable release can take place and the benefit centres (employment agency, job centre etc. ) can refuse a bridging benefit due to the non-existent, irrevocable release.

Can the employer or the insolvency administrator ask me to continue working or resume my work during the leave?

A distinction is made between a revocable and an irrevocable exemption. In the event of revocable leave, the employer may at any time require the employee to resume work. In the case of an irrevocable release, the employee is no longer recalled to work during the release phase. Resumption of work is only possible by mutual agreement between the employer and the employee.

If a revocable leave of absence has been granted and I do not comply with the request to take up work, can I be disadvantaged?

Yes, the right to issue instructions is incumbent on the employer or, after the opening of insolvency proceedings, on the insolvency administrator. If you do not comply with this request, you may lose your entitlement to compensation.

I was irrevocably exempted, what do I have to do to get performance for my living?

To enable you to earn a living, the legislator stipulates that you can apply for benefits within the framework of the so-called "non-discrimination”;. Nevertheless, the granting of such benefits is regulated by the legislator in § 157 para. 3 of the Third Social Code Code (SGB III). The service provided here by the employment agency will then be offset against your run-out wage (claim to compulsory insurance in accordance with § 55 InsO). If you are not entitled to unemployment benefit, the Jobcenter (also Arge) and, in the event of illness, your health insurance fund are responsible.

I was granted revocable leave, but my employer cannot pay me a salary. What do I have to do to earn a living?

In accordance with § 138 SGB III, they are entitled to unemployment benefit I within the framework of nonetheless being granted (§157 (3) SGB III), even in the event of revocable release from work, if the other prerequisites for receiving unemployment benefit are fulfilled.

This also includes unemployment.

An (albeit temporary) unemployment is also present if the employer declares the renunciation of the authority to issue directives or the performance of work. This declaration is the result of the leave of absence you received (. . . The leave of absence means that the insolvency debtor or the undersigned as your employer will no longer claim your work performance with immediate effect, so that you may not perform your work performance for the insolvency debtor or for the insolvency administrator as of the date of the leave of absence. …)

You must also declare to the employer that you no longer recognise the employer’s right to direct. This declaration must be made in writing. Your employer must confirm receipt in writing. You then forward the declaration confirmed by the employer to the employment agency responsible for you, referring to your benefit claim.

We would like to expressly point out that the job search registration is also a prerequisite for the receipt of benefits. If you have any questions, please contact your local employment agency.

What do I have to pay attention to when receiving benefits?

In order to be able to make use of benefits within the framework of the non-discriminatory granting of benefits, you must speak to the employment agency responsible for you directly, preferably on the same day, after receipt of the leave of absence and apply for benefits in the form of unemployment benefit I within the framework of the non-discriminatory granting of benefits (§ 157 Para. 3 SGB III). As a rule, benefits are only granted from the day of the personal audition.

Is a telephone call or an Internet job search notification sufficient to receive services from the Employment Agency?

You must differentiate between job search registration and application for benefit (unemployment benefit). You can register for employment on the website of the Employment Agency (www. arbeitsagentur. de). In order to receive a benefit, you have to go to the employment agency responsible for you in person.

What if I am not entitled to Unemployment Benefit I?

If necessary, the Job Centre can also provide basic services (§ 33 SGB II), which will also be offset against your claims to your discontinuation wage.

It is important that you speak to your job centre (unemployment benefit office II) in person and apply for basic benefit (§ 33 SGB II).

What if I’m sick?

If you are ill or if there is a ban on employment due to pregnancy or if you receive an AG supplement to your maternity pay, you have to ask your health insurance company which sickness benefit can be paid within the framework of the nonetheless granted benefits. In any case, you should also check with your health insurance company to see whether you also need to notify your local employment office. The service provided here by the health insurance company is then offset against your discontinuation wage.

Which documents should be submitted to the benefit office (Agentur für Arbeit, Jobcenter, health center)?

When applying for benefits (Alg I, Alg II, sickness benefit) within the framework of the nonetheless granted benefits, you must submit to the benefit office a copy of the (un)revocable release from work, copies of the last 12 pay slips which you received from your employer, a copy of your employment contract and, if you have already received them, the termination of your employer/your insolvency administrator/suspension contract, etc. You will also need your passport or identity card and, if applicable, a current registration certificate. As a rule, you will still receive documents from there which you must have completed by your employer or the payroll office of the insolvency administrator and submitted to the benefit office.

What should I do if the benefit office asks me to submit an application for insolvency money?

Here you must first check whether you want to apply for the benefit for the period before or after the day of the opening of insolvency proceedings. You are only entitled to claim insolvency money for a period of three months, calculated from the day before the insolvency event (opening of the insolvency proceedings or the day on which the insolvency was dismissed for lack of assets) or, if your employment relationship was terminated before that day, three months retroactively to the termination of your employment relationship. For the period after the occurrence of the insolvency event there is generally no claim to insolvency money.

If you apply for benefits for the period after the insolvency event, it cannot normally be insolvency money. If the benefit is for the period before that, then it is usually insolvency money and you should definitely apply for it. However, you may have to apply for additional unemployment benefit, as the legal requirements for the payment of insolvency benefit have not yet been met.

What information is important for the benefit office?

It is important for the benefit office to know that you are applying for the benefit within the scope of the nonetheless grant, as your employer does not pay any remuneration or you do not receive any benefits from the insolvency proceedings. Inform the benefit office of the name and address of your employer and of the insolvency administrator or cover pool administrator.

Can I take up a new activity during the leave?

Yes, this is possible after consultation with the insolvency administrator. However, you must have the income achieved offset against your claims (§ 615 BGB). If you receive benefits from the employment agency, the job centre or your health insurance fund, you must inform the benefit office before you start work so that you do not have to answer for abuse of benefits.

Can I terminate my employment during the leave?

Yes, the right to terminate the employment relationship also exists during a leave of absence. However, the statutory and contractually stipulated notice periods must be observed. In the opened insolvency proceedings, the insolvency administrator (also the own administrator) has a special right of termination according to § 113 InsO; the period of termination here is a maximum of 3 months. If you want to leave prematurely, you must talk to your employer or the responsible insolvency administrator.

What happens if I or the employees of the employment agency have questions about the benefits within the framework of the nonetheless granted?

In this case, you can contact the personnel office of the insolvency administrator. Of course, this offer also applies to your customer advisor at the Agentur für Arbeit, your job centre or your health insurance companies.