The German judiciary scrutinises the social care sector. Employment agencies to pay outstanding wages.

The social care services market in Germany is developing dynamically, mainly due to posted workers from Eastern European countries, including Poland. However, it appears that a revolution in this sector is imminent. This productive, yet poorly regulated branch of the German economy has recently attracted the attention not only of the German government and the European Union but also of the German judiciary. The latest indication of forthcoming changes is the judgment of the Berlin Regional Labour Court dated 17 August 2020, case reference 21 Sa 1900/19, awarding a Bulgarian caregiver approximately €36,000 in unpaid wages from the employment agency that hired her.

Factual background

The claimant, a 70-year-old Bulgarian citizen, was employed from 21 June 2013 by R. – BG OOD, a company based in Bulgaria, as a social assistant for 40 hours a week in return for a basic monthly salary initially amounting to 783 Bulgarian levs. She was posted to work in Germany, where she worked as a caregiver and domestic helper in private households. From 2014, she worked for Mrs Z., a 96-year-old requiring care, in her apartment in a senior living complex in Berlin. Her contract with the Bulgarian employment agency stipulated that she was to work six hours per day and 30 hours per week, with a 60-minute rest period and free weekends. The contract obliged her to provide basic care to the senior (for example, assistance with hygiene and dressing), specifying that this could not be the dominant part of the services provided. The caregiver was exempt from heavy gardening or fieldwork as well as professional nursing procedures.

At the same time, she was required to provide night watch duties, and at contract signing, it was specified that the claimant should be present with the person she cared for day and night. The caregiver lived with the 96-year-old in the senior residence and was at her disposal daily from 6:00 a.m. to 11:00 p.m. She explained that she had to keep her bedroom door open all night to hear the elderly woman calling for help, for example when she wanted to go to the bathroom. The claimant received only one day off work, irregularly, only after threatening Mrs Z.’s son with legal action if refused. After requesting holiday leave and holiday pay, she received a ready-made termination notice from the agency, which she did not sign. Consequently, the agency terminated her employment, and the caregiver filed a lawsuit claiming unpaid wages at the statutory minimum wage for 24 hours’ work.

Labour court proceedings

Although the labour court upheld the claimant’s claim, the higher court (Berlin Regional Labour Court) reduced the recognised working hours for unpaid wages to 21 hours and determined the amount according to the general statutory minimum wage (rather than the nursing wage applied by the first-instance court).

Relying on the German Civil Code, the court stated that the employer owes the statutory minimum wage for every hour actually worked. This includes not only work during regular hours but also on-call duty, meaning time spent fulfilling external needs as well as inactivity imposed by the employer during which the employee must remain at the workplace or a designated location and cannot freely decide how to use this time, i.e., there is no break or free time. This condition applies to on-call duty, which the court defined as a period of alert attention in a relaxed state. This means the employee must be available at a place designated by the employer, at any distance from the workplace, ready to start work if necessary. The court emphasised that the statutory obligation to pay wages under the Minimum Wage Act does not differentiate according to the degree of actual use of working time.

Continuous on-call duty

The court concluded that since the claimant, being merely present in Mrs Z.’s household, was effectively on call, her presence sufficed to qualify as on-call duty and thus counted as working time. The scope of services and related expectations of Mrs Z. were also known to the defendant, as she was the contractor. The defendant was thus aware of the working conditions faced by the claimant. However, no precautions or organisational measures were taken to structure the claimant’s working time to limit it.

The panel of the higher court further concluded that the claimant could spend time within the apartment, for example taking long baths or making phone calls, to avoid the need to be ready to work at any time, and could leave the apartment for a certain time, e.g., to meet friends or go for a walk. The potential free time was estimated at three hours, so the regional court awarded the claimant wages based on 21 hours of on-call duty per calendar day.

The court also held that it is the employer’s responsibility—the employment agency—to monitor the claimant’s working hours and ensure that the scope of services does not lead to excessive workload. No agreement was made with Mrs Z. on a concrete list of services with realistic deadlines and clear rules specifying when the claimant was available and when not. The claimant received no clear instructions on when she must be available for Mrs Z. or when she could or should refuse care requests without further explanation. The contract used vague clauses such as “mutual agreement” and “on-site,” which the court interpreted as the employer not imposing any specific working time.

The Berlin Regional Labour Court ruled that the constitutional right to choose one’s profession and place of work, and to exercise that choice under appropriate conditions, also applies to posted workers, pursuant to the provisions of the Treaty on the Functioning of the European Union, which prohibits any discrimination within the EU based on nationality.

It would not be consistent with the above-mentioned state protection obligation if civil law and its general clauses were interpreted in a way that would allow the employer, by simple contractual agreement, to evade the obligation to pay wages for work that the employer necessitates.

Deductions for board and lodging

Although common practice in the social care market, the labour court held in the case that deductions for board and lodging, which Mrs Z. was obliged to provide to the claimant, should not be made. Remuneration in kind does not constitute payment within the meaning of the German Minimum Wage Act.

The judgment challenges the so-called 24-hour care model and the associated violation of workers’ rights. On the other hand, the Berlin Regional Labour Court’s ruling may result in foreign agencies no longer finding it profitable to engage workers from Eastern Europe due to rising costs. It is possible that in the near future, more caregivers will claim their due wages, potentially leading to a crisis in the social care services market in Germany, where posted workers constitute a significant share.