Update Employment Law February 2022

Employees may require the employer to provide necessary work materials

Federal Labour Court (BAG), judgment dated November 10, 2021 - 5 AZR 334/21 (so far only published as press release)

The BAG has ruled that bicycle delivery personnel must be provided with the work equipment necessary for their job (here: smartphone and bicycle) by the employer. The BAG thus confirms the decision of the Regional Labour Court in Hessia (LAG) of March 12, 2021 (File No. 14 Sa 306/20; the decision of the LAG was discussed in our September newsletter from 2021).

Facts of the case 

The plaintiff and appellee (hereinafter plaintiff) worked as a bicycle delivery driver (so-called "rider") for the defendant and appellant (hereinafter defendant) and delivered food and drinks from various restaurants to customers on its behalf. Both the schedules and the addresses of the restaurants and customers were communicated to him via an app on his private smartphone. The obligation to use his own work equipment resulted from the contractual agreements of the parties, which are general terms and conditions (AGB, „Allgemeine Geschäftsbedingungen“). As compensation for the use of his own work equipment, the defendant granted the plaintiff a repair credit of EUR 0.25 per hour worked, which could only be redeemed at a company designated by the defendant.

The plaintiff made a claim against the defendant for the provision of a smartphone and a bicycle, which he needed to perform his work.

The Frankfurt/Main Labour Court had dismissed the action. It assumed that the parties had at least impliedly agreed that the plaintiff had to provide the disputed work materials himself. The plaintiff had signed the employment contract in the knowledge of this, so that the provision did not violate section 138 German Civil Code (BGB). The LAG rejected this view of the labour court and upheld the plaintiff's appeal. The LAG based its opinion primarily on an unreasonable disadvantage for the plaintiff if he has to provide the work materials himself. 

Decision of the BAG

According to the published press release, the BAG - like the LAG - also assumes an unreasonable disadvantage for the plaintiff within the meaning of section 307 (2) no. 1 in conjunction with section 307 (1) sentence 1 BGB and declares the contractual agreements between the parties to be null and void. 

According to the guiding principle of the employment relationship, the employer must provide the work equipment essential for the performance of the agreed activity and ensure that it is in working order.

However, the contractual provisions of the parties stipulate that the acquisition and operating costs and the associated financial risk lie with the plaintiff. The defendant would no longer have to be responsible for the wear and tear, depreciation, loss or damage of the necessary work equipment. In this respect, the guiding principle and the contractual arrangement are diametrically opposed.

Any contractual or statutory compensation claims could not (in the present case) justify a different result. The repair credits granted to the plaintiff would be based on the mere working time, without reference to the concrete mileage. Nor could the plaintiff freely dispose of these credits, since he was only allowed to visit repair shops selected by the defendant. No compensation was provided for the use of the smartphone. 

Practice Notes

The BAG reaffirms the view that the employer, in accordance with the legal guiding principle of section 618 BGB, must provide the essential work equipment and bear the associated risks. After all, in return, the employer derives the (financial) benefit from the business and, in addition to the operational processes, also shapes the deployment of its employees.

The BAG's explicit reasons for its decision will be of decisive importance for the future drafting of contracts. The BAG - like the LAG - also sees the possibility of a deviating contractual agreement. It will be interesting to see whether the BAG provides further details of such a contractual agreement. 

Essential parameters of the agreement of a repair budget should be (as far as it can be inferred from the press release) the following: 

  • Repair budget is based on actual miles driven, not hours worked.
  • The employee is free to decide which repair shop to visit for repairs.
  • Compensation must be "reasonable" in amount.

It is difficult to say how high "appropriate compensation" is. However, it can be expected that courier services will adjust their employment contracts and that the relevant clauses will subsequently be subjected to renewed scrutiny by courts as a result of employee complaints. Following this, guidelines can be developed as to when compensation is "appropriate".

Insofar as corresponding clauses can also be found in employment contracts from comparable sectors (e.g. postal delivery staff or other delivery drivers), consideration should also be given to reviewing the employment contract clauses. If the employment contracts do not contain an (effective!) forfeiture clause of contractual claims, the employees could assert claims retroactively for three years, because then only the general statute of limitations according to section 195 BGB applies. 

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