On December 4, 2019, the Higher Labour Court of Munich (LAG Munich) made an important decision regarding the classification of so-called crowdworkers under labour law. The ruling clarifies a much-discussed issue from the area of Work 4.0. For the time being. In individual cases.
Crowdworkers are micro-jobbers on the Internet. Crowdworking stands for the performance of paid temporary jobs that are relayed via Internet platforms or smartphone apps. Typical tasks include testing apps, photographing shop opening hours or verifying information from the Internet. According to the “Crowdworking Monitor” of the Federal Ministry of Labour and Social Affairs, almost 4 million eligible voters were working as crowdworkers in Germany in 2018. The trend is on the rise. There is no entitlement to a minimum wage, holidays or paid sick leave. But in many cases there is also no obligation to accept an assignment and no authority to decide where and when the assignment should be carried out. A cheer for the freedoms of the digital world, a revolution in the world of employment, or a targeted circumvention of minimum labour law standards?
In the case at hand the LAG Munich had to clarify whether crowdworkers are employed or self-employed.
The plaintiff had been working for the defendant for some time. He worked for the defendant for about 15 – 20 hours per week and earned about 60% of his income thereby. The plaintiff, among others, carried out a verification of the display of goods for brand manufacturers in retail stores and at petrol stations. Due to disagreements, the defendant terminated the cooperation. The plaintiff was not able to accept any further orders and sued. In his opinion, the business relationship could not be effectively terminated by e-mail because the parties had an unlimited employment relationship. The Munich Labour Court dismissed the claim and in the first instance (Case No. 19 Ca 6915/18) ruled in favour of self-employment.
The plaintiff’s appeal was unsuccessful. The LAG Munich (Case No. 8 Sa 146/19) confirmed the decision of the lower court. Crowdworkers are self-employed. According to the legal definition, an employment contract only exists if there is mutuality of obligation. In addition it must be a relationship of subordination and personal dependency between the employee and the employer. This is generally indicated by the fact that the employee has to follow work instructions in terms of time, place and content and is integrated into the employer’s operational organisation. In the opinion of the LAG Munich, these criteria are not met in the defendant’s case. There is no obligation for the crowdworker to accept the assignment. The mere fact that the plaintiff makes a considerable part of his living via the defendant’s platform and therefore feels obliged to accept a contract is not sufficient for the assumption of an employment contract. The defendant is also not obliged to offer work assignments. The agreement between the crowdworking platform and plaintiff is to be regarded as a mere framework agreement. No employment contract was established between the parties. The written form requirement as in the case of terminations of employment relationships therefore does not apply. The framework agreement could be effectively ended by the defendant via email. The contractual relationship between the parties was effectively terminated.
Due to the fundamental importance of the case, however, an appeal to the Federal Labour Court was allowed.
In order to avoid unpleasant surprises, employers should, in case of doubt, resort to the status determination procedure of the German Pension Insurance Organisation. Here too, it is better to be safe than sorry – pseudo-self-employment is very costly for both employers and employees.
The ruling of the LAG Munich is not a model decision that makes a general statement about the employee status of crowdworkers. In the future the employee status will be disputed on the basis of various criteria in individual cases. The conditions under which crowdworkers fulfil their tasks are as diverse as the tasks themselves. A reliable prognosis cannot be made by the employer alone in advance. However, the decision of the LAG Munich shows that, in the absence of mutuality of obligation and subordination, there are strong evidences for self-employment.
(30 December 2019)