Federal Labor Court: Crowdworkers can be Employees.

 Federal Labor Court decides on crowdworkers’ employee status for the first time (Ref.: 9 AZR 102/20).

Federal Labor Court: Crowdworkers can be Employees

According to a decision by the Federal Labor Court (Bundesarbeitsgericht, BAG), the relationship between crowdworker and crowdsourcer can constitute an employment relationship.

The crowdworking segment of the labor market is growing. Crowdworkers take on jobs via a platform on the Internet and increase their income with “micro jobs”. The question of whether crowdworkers are employees is disputed.

The Federal Labor Court has now ruled in a judgment dated December 1, 2020, that an employment relationship may exist between the operator and provider of the online platform (crowdsourcer) and the jobholder (crowdworker) (Ref.: 9 AZR 102/20). 

Activity bound by instructions and determined by others

The Federal Labor Court explained that the employee status according to Article 611a of the German Civil Code is dependent on whether the employee performs work which is bound by instructions and determined by others in a relationship of personal dependency. If the factual performance of the activity constitutes an employment relationship, the designation in the contract between the crowdsourcer and the crowdworker is no longer relevant. An overall assessment of all the circumstances can then show that the crowdworker is to be considered an employee, according to the Federal Labor Court.

Almost 3,000 Orders Following Precise Specifications

In the underlying case, the defendant provider offered microjobs via an online platform based on a basic agreement and general terms and conditions. Crowdworkers were able to accept the jobs via an app but were not contractually obligated to do so. With the number of completed jobs, the level increased and the crowdworkers were allowed to accept several jobs at the same time. Within 11 months, the plaintiff had accepted almost 3,000 jobs and completed them according to the crowdsourcer’s detailed specifications. Ultimately, the provider did not want to give him any more assignments.

The crowdsourcer wanted to avoid future disagreements but in doing so achieved the opposite. The crowdworker filed a lawsuit and demanded a statement that a permanent employment relationship existed. At the same time, he raised remuneration claims and defended himself against an further, alternative termination notice by the provider.

Federal Labor Court Recognises Employment Relationship

The lawsuit was partly successful before the Federal Labor Court. After the lower courts had rejected the plaintiff’s employee status, the Erfurt judges found that an employment relationship was present. The plaintiff had carried out the assignments in bound by externally determined instructions, and in was in a relationship of personal dependence. He had not been able to freely determine the place, time and content of the work. In the overall evaluation, the plaintiff’s activity was characteristic for an employee. The Federal Labor Court also found that the fact that he was not contractually obligated to accept orders did not contradict this. The provider’s entire organizational structure was designed to motivate and reward the crowdworkers to continuously accept orders, the Federal Labor Court explained. Through this incentive system, the plaintiff had been induced to continuously perform control activities. For this reason, he was to be qualified as an employee as a crowdworker in this case. The Federal Labor Court, however, deemed the termination to be effective and referred the legal dispute back to the Higher Labor Court with regard to the remuneration claims.

Many things depend on the classification of a crowdworker as an employee. For instance, social security, leave entitlement or protection against dismissal. Although in this instance the Federal Labor Court made a decision on a case-by-case basis, it clarified in its ruling that crowdworking can in fact constitute an employment relationship. Therefore, platform providers must pay close attention to how they organize their services and, in particular, reconsider close ties with crowdworkers and detailed specifications for the execution of orders.