In the current discussion about the abusive use of contracts for works and services (see also 2.1 below), the Federal Labour Court of Berlin-Brandenburg reached on 12 December 2012 (docket no. 15 Sa 1217/12) a significant decision on the existence of a disguised provision of temporary workers and pseudo contracts for works and services.

In the underlying factual situation, the claimant, who worked as a packager, sued her employer for “equal pay”. The employer had concluded a contract for works and services with a German limited liability company [Gesellschaft mit beschränkter Haftung, GmbH], at whose premises the claimant conducted her work. The employee asserted remuneration claims on the basis of an alleged temporary work relationship. The decisive factor in this connection was whether the “contract for works and services” between the employer and the GmbH could indeed be classed as a contract aimed at the performance of a work or service or, in contrast, whether it could be classed as a concealed provision of temporary work.

According to the findings of the Regional Labour Court of Berlin-Brandenburg, the fact that the services were oriented towards the needs of the employer suggested that the claimant was integrated into the employer’s business and hence a disguised provision of a temporary worker. The existence of a contract for works and services between the GmbH and the defendant could not be assumed since it was only through the instructions given by the GmbH that the subject matter of the services to be rendered by the defendant was first determined, and hence the instructions substantially originated from the GmbH. The performance of the defendant was exhausted – as is typical for a “hiring enterprise” – in the provision of the production employees (and therewith also the claimant) to handle the needs arising at the GmbH.

The Regional Labour Court of Berlin-Brandenburg has developed the dogmatic delimitation between the contract types, which is to be applied in practice. In the actual event of a disguised provision of a temporary worker, there are also substantial risks for the party supposedly ordering the service. This not only concerns the subsidiary liability for social security claims, but also possible violations of the German Temporary Employment Act. If a contract for works and services is agreed, then more is required than just a formally correct contract for works and services, which already begins with the correct designation of the parties as the ordering party and the contractor and continues with the definition of the work or service and the liability regulations. Rather, a further requirement is that the integration of the employees in the business of the ordering party is avoided in case of the deployment of external employees of the entrepreneur. In no case may the ordering party give these employees instructions regarding the content, nature and scope of their performance.