GRP Rainer LLP

Employment Relationship After Years of Contract Work - Employment Contract

An employment relationship can be established regardless of whether a service contract was signed, even after contract work under instructions.


Cologne, NRW -- (SBWIRE) -- 09/23/2013 -- GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Bremen, Dusseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London conclude: In a Decision of August 1, 2013 (File number 2 Sa 6/13), the Superior Labour Court (LAG) of Baden-Württemberg has ruled that regardless of whether a service contract was signed, an employment relationship can be established even after contract work under instructions when the employee is integrated in the business. The LAG had to decide in a case where a distinction had to be made between a service contract and an employee loan contract. The two plaintiffs had been freelancers in an IT system house which had assigned them to work for ten years in the defendants business under a service contract. The two plaintiffs thought that an employment relationship existed because they were integrated in the business of the defendant and worked under the company’s instructions. The defendant thought that no employment relationship existed since the plaintiffs were not directly appointed by the company. They had been assigned to the company via a ticket system, and they were called up by the IT employees.

After the action was dismissed by the lower court, the LAG now agreed with the plaintiffs. In the opinion of the court, there was no service contract but an employee loan contract. The plaintiffs had been employed on the premises of the defendant for a long period of time. Furthermore, the plaintiffs had used the defendant’s operating equipment. The court confirmed that the plaintiffs had worked under instructions from the defendant. The LAG further pointed out that what counted was not what was in the agreement but what had actually happened, which indicates that the plaintiffs worked under the defendant’s instructions and were integrated in the defendant’s business. It therefore had to be assumed that there was a virtual employment contract between the plaintiffs and the defendant. While such a system had been contractually agreed upon between the service provider and the defendant, it had seldom been carried out. Instead, the defendant’s employees had directly approached the plaintiffs and given them work orders.

People affected by contract work and service contracts are often facing some legal questions. It is therefore advisable to seek legal advice from a lawyer experienced in labour law who can examine the situation in an individual case.

GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.
Contact Michael Rainer
Lawyer, Managing Partner

GRP Rainer LLP
Hohenzollernring 21-23
50672 Cologne

Phone: +49 221-27 22 75-0 click my link