HR-Glossar

Freistellung (release from duties)

Which forms of release from duties exist in Germany, what revocable and irrevocable mean and how each affects holiday, pay and outside earnings.

1. What is Freistellung (release from duties)?

Freistellung means the employee is released from the obligation to work while the employment relationship continues. The term covers very different situations – which is the source of most of the misunderstandings.

The distinctions that matter are above all:

  • Paid or unpaid — whether pay continues.
  • Revocable or irrevocable — whether the person can be called back.
  • Unilateral or agreed — whether the employer directs it or both sides consent.

The second distinction carries the greatest consequences, specifically for a release after notice of termination. Only an irrevocable release can discharge holiday entitlements under Section 7 BUrlG – and for that the holiday must be expressly set off. With a revocable release this does not happen, because the person could be called back at any time and there is therefore no rest in the legal sense.

A second consequence concerns outside earnings: with an irrevocable release, the person must allow what they earn elsewhere to be set off under Section 615 sentence 2 BGB – with a revocable release, as a rule not.

Anyone reaching for the term "garden leave" should note the starting point below: German law begins from a right to be employed, not from a discretion to send someone home.

2. Origin and development

Release from duties is not a statutory concept of its own but a collective term shaped by practice and ordered by the courts. There is no general right of the employer to release someone unilaterally – the employee has, in principle, a right to be employed.

Unilateral release is therefore permissible only where there is an overriding operational interest or a contractual provision. During a notice period it is regularly recognised; during ongoing employment it requires justification.

3. Core principles and how it works

The right to be employed as the starting point

Without a reason or an agreement there is no right to send someone home.

Irrevocable, for holiday to be set off

Only someone who cannot be called back rests in the legal sense. And the holiday must be expressly set off.

Set-off of outside earnings

With an irrevocable release, earnings from elsewhere are to be set off. That belongs in the declaration, otherwise a dispute arises.

Pay continues unless otherwise agreed

Releasing someone means giving up the work, not the obligation to pay.

Secondary activity during the release

It can be permissible but touches on non-competition and questions of set-off. That belongs settled.

4. Who is Freistellung (release from duties) relevant for?

- Employers in separation situations – there the release is standard and error-prone. - Employees after notice – for them it is about holiday, pay and whether they may already work elsewhere. - HR – the wording of the release declaration decides its effect. - Works council – separate rules apply to release for works council duties.

5. How it differs from related terms

- Release and holiday – holiday is a statutory entitlement; a release can discharge it but is not the same thing. - Release and short-time work – in short-time work, working time falls away with a loss of pay and a replacement benefit; with a paid release, pay continues in full. - Release and suspension – suspension in connection with suspected misconduct is a particular form requiring justification. - Release and a prohibition on employment – a prohibition rests on protective legislation, a release on a decision or an agreement.

6. Variants and adaptations

- Revocable release – recall possible; no set-off of holiday, as a rule no set-off of outside earnings. - Irrevocable release – no recall; holiday can be set off, outside earnings are to be set off. - Unpaid release (special leave) – at the person's request, with consequences for insurance cover and holiday entitlement. - Release for works council duties – governed by statute, with an entitlement of its own. - Release for care or childcare – separate statutory entitlements with their own rules.

7. Advantages and challenges

Advantages

  • Separations can be arranged with less conflict
  • Trade secrets and client relationships are protected during the notice period
  • Holiday entitlements can be discharged alongside, where it is structured correctly
  • For employees, time to find a new position while pay continues

Challenges

  • Handover of knowledge effectively does not happen
  • The wrong form misses the intended set-off of holiday entirely
  • Set-off of outside earnings is often forgotten in the drafting
  • Unpaid release affects insurance cover and holiday entitlement
  • Unilateral release during ongoing employment is open to legal challenge

8. Best practices for implementation

Word the declaration precisely

Revocable or irrevocable, setting off which holiday, with or without set-off of outside earnings. Three sentences that decide everything.

Set off the holiday expressly

Without express set-off the entitlement remains and must be paid out at the end.

Plan the handover before the release

Releasing someone means giving up the remaining time. Whatever is to be handed over belongs done beforehand.

With unpaid release, clarify insurance cover

After a short period, membership of the statutory health insurance through the employment ends. That belongs discussed before the release begins.

9. Tips for employers and employees

For employers

  • **Irrevocable, if holiday is to be set off** – it does not work any other way
  • **Deal with outside earnings** – the set-off does not arise by itself if it is not declared
  • **Handover first** – after the release nobody is there any more
  • **Be careful during ongoing employment** – the right to be employed is the rule, release the exception

For employees

  • **Read the declaration closely** – revocable or irrevocable decides holiday and outside work
  • **Clarify a new role beforehand** – with an irrevocable release, earnings are set off
  • **Check your remaining holiday** – if it was not expressly set off, it remains
  • **With unpaid release, think about insurance** – cover does not end at once, but it does end

10. Conclusion

Release from duties is one word for many different situations, and that is exactly where the risk lies. The decisive fork is revocable against irrevocable: only an irrevocable release can discharge holiday – and only where it is expressly set off – and only with an irrevocable release are outside earnings set off. Three sentences in the declaration decide whether a release achieves what was intended by it. What it never achieves is a handover of knowledge; that belongs beforehand.

For an international group the term to be careful with is the English one. "Garden leave" suggests a discretion the employer does not have here: German law starts from the employee's right to be employed, so a unilateral release during ongoing employment needs a justification, and only during a notice period is it regularly accepted.

A note on sources: the Civil Code has an official English version, cited below. The Federal Leave Act does not (checked on 2026-09-27); its German text governs.

Sources

Related terms

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