Illegal employee leasing – burden of proof

BAG, judgment of 25 July 2023 - 9 AZR 278/22

Facts

The subject matter of the litigation was the question of whether an employment relationship had come into existence between the parties as a result of illegal employee leasing.

Since January 2012, the plaintiff had been working as a systems engineer for the company "E-GmbH" (E-GmbH). The plaintiff was deployed by the defendant, a company in the automotive industry. There, the plaintiff, as part of a team assigned to a department, took over the support of control units for produced automobiles. The team consisted of employees of the defendant and employees of external companies, such as the plaintiff, who was employed by E-GmbH.

The plaintiff stated that there was a case of illegal employee leasing and thus an employment relationship existed between the plaintiff and the defendant. In this regard, the plaintiff claimed that the subject matter of the contract between the defendant and E-GmbH had been an employee leasing. The concrete tasks of the employees had been dependent on the instructions of the defendant.

In contrast, the defendant took the position that the plaintiff had been deployed as an agent of E-GmbH within the framework of a service contract, which included the services to be rendered. The defendant and E-GmbH had already distributed the work within the said team in advance by assigning the employees of the external company accordingly.

Illegal employee leasing or agent of a contract for work or services?

The BAG has confirmed the decision of the Regional Labor Court (LAG) according to which an employment relationship was established between the parties by means of illegal employee leasing pursuant to Sec. 10 (1) half-sentence 1 in conjunction with Sec. 9 (1) no. 1a half-sentence 1 AÜG. The defendant’s revision remained unsuccessful.

An employment relationship between the hirer (the defendant) and the leased employee (the plaintiff) is deemed to have been established pursuant to Sec. 10 (1) half-sentence 1 AÜG if the employment contract between the lender (E-GmbH) and the leased employee is invalid. Pursuant to Sec. 9 (1) no. 1a half-sentence 1 AÜG, this is the case if, contrary to Sec. 1 (1) sentences 5 and 6 AÜG, the employee leasing has not been expressly designated as such and the person of the leased employee has not been specified.

According to the legal definition of Sec. 1 (1) sentence 2 AÜG, an employee leasing exists if an employee is integrated into the hirer's work organisation and is subject to the hirer's instructions. In this respect, employee leasing within the meaning of the AÜG is characterised by a special arrangement of the legal relationships between the lender and the hirer (by means of an employee leasing contract), between the lender and the employee (by means of a temporary employment contract) and by the absence of a legal relationship between the employee and the hirer based on an employment contract. The lender has the duty to promote the hirer's business purposes by selecting employees and providing them to the hirer based on the employee leasing contract.

In contrast, an employee is deployed as an agent under a contract for work or services if the contractor acts as the employee's employer for a third-party company. In this case, the contractor is responsible for the production of the promised work or for the performance of the promised services and decides on the necessary organisational actions. As an agent, the employee is then subject to the instructions of the contractor, but instructions from the third-party contractor are also possible. The AÜG does not cover these contracts for work or services.

The contractual agreements of the parties, but also the actual implementation of the contract, must be considered to determine whether an illegal employee leasing arrangement exists or whether the work is performed for a third-party company within the framework of a contract for work or services. If the contract and its practical implementation contradict each other, the latter shall be decisive pursuant to Sec. 12 (1) sentence 2 AÜG.

Facilitation of the employee's burden of explanation and proof in accordance with the principles of the secondary burden of explanation

In principle, the employee bears the burden of proof for the facts that establish the employment relationship with the hirer pursuant to Sec. 10 (1) sentence 1 AÜG. However, according to the principles of the secondary burden of proof, a graduated burden of proof is possible. This is the case if the employee who is obliged to present evidence is outside the relevant sequence of events and is therefore not in a position, despite exhausting all possibilities, to determine the facts more precisely to be able to present the necessary facts. If the relevant circumstances are known to the opposing party and more detailed information can be provided, the opposing party must deny the alleged facts in a substantiated manner – and not just simply – by presenting the facts that speak in favor of the opposite.

In the present case, the plaintiff could not present any further facts due to lack of knowledge of the content of the contractual agreements between E-GmbH and the defendant. The defendant would therefore have had to present the concrete content of the agreements in accordance with the principles of the secondary burden of proof. The defendant did not comply with this obligation, despite the corresponding instructions and requirements imposed by an order of the LAG.

The defendant has not shown that in accordance with Sec. 1 (1) sentences 5 and 6 AÜG the employee leasing was expressly designated as such and the person of the plaintiff was specified. As a result, the employment contract between the plaintiff and E-GmbH is invalid pursuant to Sec. 9 (1) no. 1a half-sentence 1 AÜG, so that pursuant to Sec. 10 (1) sentence 1 AÜG an employment relationship between the defendant and the plaintiff has come into existence.

Importance for the practice

The principles of the secondary burden of proof make it easier for an employee to present the facts required for the establishment of an employment relationship pursuant to Section 10 (1) sentence 1 AÜG. In continuation of its jurisdiction (cf. BAG judgment of 5 July 2022 – 9 AZR 323/21, margin no. 21), the BAG confirms this once again in this judgment.

Consequently, also in the future, if employees are leased out to a third-party company or are deployed for the performance of contracts for work or services at third party companies, the relevant legal relationships should be precisely regulated by corresponding contracts and attention should be paid to compliance with these in the actual performance of the contracts. Employers should try to avoid any indications that would lead to the conclusion that employees deployed by third parties under a contract for work or services are bound by instructions and integrated into the work organisation of the third-party company.