BAG: Crowdworkers may be regarded as Employees

Not only politics but also the judiciary are currently dealing with modern forms of employment and the ongoing digitalisation of the world of work. Last week the Federal Labour Court (Bundesarbeitsgericht – BAG) had to decide on the employee status of a crowdworker. Contrary to the previous instances, the BAG recognised in the case to be decided that the crowdworker’s work was dependent on instructions and determined by others. Thus, the contractual relationship between the crowdworker and the crowdsourcing company was to be regarded as an employment relationship, decision of 01 December 2020 – 9 AZR 102/20.

Irrespective of this, the Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales – BMAS) plans to regulate the placement of work via digital platforms, in particular to clarify the legal status of platform workers more easily and with legal certainty. 

1.Facts of the BAG Decision

In the case on which the decision is based, the defendant crowdsourcing company carries out checks on product presentations at retail outlets and service stations on behalf of its customers. The inspection activities are carried out by crowdworkers. Their main task is to take photos of product presentations and to answer questions about product advertising. The defendant offers the assignment of these control activities on an online platform. Crowdworkers can accept them via a personal user access. There is no obligation to accept the assignments. If the crowdworker accepts an assignment, he has to execute it regularly within two hours according to detailed instructions of the defendant. For each completed assignment, the crowdworker will receive so-called experience points on his user account. The more experience points a crowdworker has gained, the higher his level. The latter enables the crowdworker to accept several orders at the same time and consequently to increase his hourly rate.

The applicant last carried out 2978 assignments for the defendant over a period of eleven months. In early 2018, the defendant informed the plaintiff that he would not be offered any further assignments due to some discrepancies. The plaintiff thereupon sought a judicial declaration that an employment relationship existed between him and the defendant. In addition, the plaintiff asserted outstanding claims for remuneration. The defendant thereupon terminated any existing employment relationship as a precaution. The plaintiff subsequently extended his claim to include an application for protection against dismissal.

2. Decision of the BAG

After the plaintiff was defeated in the lower instances, the BAG ruled in favour of the plaintiff at least partially: an employment relationship existed with the plaintiff at the time of the defendant’s precautionary termination. For the assessment of the employee’s status, it depends on whether the employee carries out externally determined work subject to instructions and in personal dependence, taking into account all circumstances of the individual case. The decisive factor in this respect is in particular the fact that the crowdworker is bound by instructions with regard to place, time and content of the work. In this respect, the “lived” contractual relationship and not the contract designation is decisive.

In the specific case, the BAG concluded that the plaintiff had worked for the defendant in a manner typical of employees. The decisive factor for this was in particular the defendant’s incentive system: only a higher level in the evaluation system enabled the plaintiff to accept several orders at the same time in order to complete them on one route and thus generate a higher hourly wage. As a result, the plaintiff was induced to carry out continuous control activities in the district of his habitual residence.

Nevertheless, the BAG rejected most of the plaintiff’s appeal, since the precautionary notice of termination effectively ended the employment relationship of the parties. With regard to the claims for remuneration, the BAG stated that the plaintiff could not demand remuneration based on the calculation of his fees received as an allegedly freelance employee. Rather, only the usual amount of remuneration is owed, which is to be clarified by the Munich Regional Court.

3. Assessment of the Decision

The starting point for the BAG’s decision was an examination of the degree of economic and personal dependence of the plaintiff. In this context, the BAG seems to have attached considerable importance to the design of the defendant’s remuneration system. In this respect, the reasons for the ruling, which have not yet been published, will have to be examined in detail. It remains to be seen, however, whether the reasons for the decision will be published in each case.

In addition, the BAG’s statement on the amount of the plaintiff’s remuneration claims has considerable practical relevance, also in terms of social security law. This is because this argumentation can be applied to all cases in which bogus self-employed persons demand remuneration under an employment contract. In particular, it remains to be seen whether case law develops a rule of thumb capable of generalisation for the relationship between the fees promised to the bogus self-employed person and his remuneration as an employee and whether the social courts will follow suit here.

4. Outlook

The BMAS is also currently dealing with modern forms of work and has announced that platform work will be more strongly regulated in future. The BMAS position paper provides for the following key points to strengthen the rights of platform workers vis-à-vis work platforms:

  • Inclusion in the statutory pension scheme and participation of the platforms in the payment of contributions
  • Improvement of accident insurance coverage
  • Introduction of a shift in the burden of proof in proceedings to clarify the status of employees
  • Introduction of minimum notice periods
  • Improving the judicial review of certain clauses in the General Terms and Conditions, which unilaterally place the platform workers at a disadvantage.

Of course, we will keep you informed as usual about the latest developments in jurisdiction and legislation.

Dr. Lorenz Mitterer                                                   Katharina Schlonsak

Lawyer                                                                        Lawyer

Specialist Lawyer for Employment Law

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