Frank Schröder

Frank Schröder
Director, Head of Marketing & Communications

Büro Dusseldorf
+49 211 6901-1200

Are “crowdworkers” employees? The Munich regional labor court provides for certainty in the first instance.

BTadvice 2020-Q1

“Crowdworkers” – also called “digital nomads” – work through an employment agency. Companies look for people to whom they can assign jobs. These can include merely digital activities, such as texting or programming, but also classic services, such as the control of the presentation of goods in retail.

Hierbei Crowdworkers register on the different platforms and apply for various jobs which, after the application’s acceptance, must be processed by the crowdworker in a short time.

Currently, crowdsourced jobs are rather low-paid jobs and no highly remunerated positions. According to a study, 1 million Germans work in such jobs in Germany. For many people, such model seems to be quite attractive. They can work from home and decide how many jobs they accept and how long they are occupied. To others, crowdworking is an opportunity to make some extra money. Not only in Germany but also in other EU member states the share of crowdworkers continues to rise.

However, the question is how such form of work must be treated pursuant to labor and social security law. As far as we can see, such question has been answered for the first time by the Munich regional labor court (“LAG”) on December 4, 2019 – 8 Sa 146/19 – which decided there is no employment relationship between the crowdworker and the platform used by the crowdworker to look for jobs. In the case at hand, the plaintiff had entered into a framework agreement with the platform operator “Roamler”. The platform’s operator performs controls of goods presentations in retail and at gas stations. The platform operator had terminated the contract with the plaintiff per email. The plaintiff had appealed against such termination.

The LAG Munich argues that an employment relationship pursuant to Art. 611a Sec. 1 BGB (German Civil Code) exists if the employee, in the service of another person, is obliged to perform work which is subject to instructions and is determined by others and if he is personally dependent. According to prevailing case law, an employee must be integrated into the employer’s work organization and must be bound by instructions in terms of place and time of work. However, the contracts with the internet platform “Roamler” do explicitly not provide for such obligation. The crowdworkers are in particular not obliged to accept jobs; the platform, in turn, is not obliged to offer jobs. For the LAG Munich, such basic agreement was decisive as it does not meet an employment contract’s requirements. Furthermore, the crowdworker was not integrated into the platform’s work organization. The fact that the plaintiff earns his living with his crowdworking activities for the platform as he worked for a monthly remuneration of ca. EUR 1,800.00 does not change the legal situation. Even the Munich labor court came to the same conclusion.

Due to the legal matter’s significance, the Munich labor law allowed for an appeal to the German Federal Labor Court (“BAG”). The LAG Munich had explicitly not decided the question whether or not the individual jobs established a fixed-term employment relationship, if applicable, in relation to the individual customers. On the one hand, this had not been asserted by the plaintiff’s action, on the other hand, the 3-week time limit had been lapsed for such complaints.

Therefore, it remains to be seen how the BAG is going to decide the issue. In literature, the question as to what kind of contractual relationship crowdworking involves is discussed quite controversially. The plaintiff had been supported by the German industrial union of metal workers (“IG Metall”), which demands fair working conditions for the increasing number of crowdworkers and was disappointed by the LAG Munich’s decision.

Under social security law, crowdworkers are currently treated as self-employed and are as such not subject to social security contributions. There is no case law in connection with this issue, either; therefore, the development should be monitored.