{"id":4119,"date":"2019-09-30T09:30:58","date_gmt":"2019-09-30T07:30:58","guid":{"rendered":"https:\/\/it-landgraf.de\/an-externally-hired-managing-director-of-a-gmbh-acting-as-an-employee\/"},"modified":"2019-09-30T10:46:15","modified_gmt":"2019-09-30T08:46:15","slug":"an-externally-hired-managing-director-of-a-gmbh-acting-as-an-employee","status":"publish","type":"post","link":"https:\/\/it-landgraf.de\/en\/an-externally-hired-managing-director-of-a-gmbh-acting-as-an-employee\/","title":{"rendered":"AN (EXTERNALLY HIRED) MANAGING DIRECTOR OF A GMBH ACTING AS AN EMPLOYEE?"},"content":{"rendered":"\n\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-fcb9xg-faf8ecc1650769f0f05440ff1711844c\">\n.avia-section.av-fcb9xg-faf8ecc1650769f0f05440ff1711844c{\nbackground-repeat:no-repeat;\nbackground-image:url(https:\/\/it-landgraf.de\/wp-content\/uploads\/3629.jpg);\nbackground-position:0% 0%;\nbackground-attachment:scroll;\n}\n<\/style>\n<div id='av_section_1'  class='avia-section av-fcb9xg-faf8ecc1650769f0f05440ff1711844c main_color avia-section-default avia-no-shadow  avia-builder-el-0  el_before_av_section  avia-builder-el-first  hide_on_print avia-full-stretch avia-bg-style-scroll av-minimum-height av-minimum-height-40 av-height-40  container_wrap sidebar_right'  data-section-bg-repeat='stretch' data-av_minimum_height_pc='40' data-av_min_height_opt='40'><div class='container av-section-cont-open' ><main  role=\"main\" itemprop=\"mainContentOfPage\"  class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-4119'><div class='entry-content-wrapper clearfix'>\n<\/div><\/div><\/main><!-- close content main element --><\/div><\/div><div id='av_section_2'  class='avia-section av-ea3w1g-e12a8958254a750c715b4492c405dc96 main_color avia-section-default avia-no-shadow  avia-builder-el-1  el_after_av_section  avia-builder-el-last  avia-bg-style-scroll container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-4119'><div class='entry-content-wrapper clearfix'>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-cgmmxg-3b78369ec7b2b168bd7d5170eb91212b\">\n.flex_column.av-cgmmxg-3b78369ec7b2b168bd7d5170eb91212b{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-cgmmxg-3b78369ec7b2b168bd7d5170eb91212b av_two_third  avia-builder-el-2  el_before_av_two_third  avia-builder-el-first  first flex_column_div av-zero-column-padding  '     ><style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-k165qe6j-39f10abaa3a70bf6f6268484cc6e78fa\">\n#top .av-special-heading.av-k165qe6j-39f10abaa3a70bf6f6268484cc6e78fa{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-k165qe6j-39f10abaa3a70bf6f6268484cc6e78fa .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-k165qe6j-39f10abaa3a70bf6f6268484cc6e78fa .av-subheading{\nfont-size:15px;\n}\n<\/style>\n<div  class='av-special-heading av-k165qe6j-39f10abaa3a70bf6f6268484cc6e78fa av-special-heading-h1 blockquote modern-quote  avia-builder-el-3  avia-builder-el-no-sibling '><div class='av-subheading av-subheading_above'>30. September 2019\n<\/div><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >AN (EXTERNALLY HIRED) MANAGING DIRECTOR OF A GMBH ACTING AS AN EMPLOYEE? <\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-atoalw-b00dff7695316cafe84422a6de600ad2\">\n.flex_column.av-atoalw-b00dff7695316cafe84422a6de600ad2{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-atoalw-b00dff7695316cafe84422a6de600ad2 av_two_third  avia-builder-el-4  el_after_av_two_third  el_before_av_two_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-k165qs3w-8e9b06f408b390eb4bc9beb176d3816d '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><p><strong>Two current decisions are addressing the question, whether an (externally hired) managing director of a limited liability company [<em>Gesellschaft mit beschr\u00e4nkter Haftung &#8211; GmbH<\/em>] can be regarded as employee. While being denied by the Federal Labor Court [<em>Bundesarbeitsgericht &#8211; BAG<\/em>] in its decision of 21 January 2019 (file no. 9 AZB 23\/18), the Federal Court of Justice [<em>Bundesgerichtshof &#8211; BGH<\/em>] grants an externally hired managing director the status of an employee (decision of 26 March 2019, file no. II ZR 244\/17). Nonetheless, the two decisions are not contradictory.<\/strong><!--more--><\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-9n0dec-f74a95e5cccd39011f84502c35b757b2\">\n.flex_column.av-9n0dec-f74a95e5cccd39011f84502c35b757b2{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-9n0dec-f74a95e5cccd39011f84502c35b757b2 av_two_third  avia-builder-el-6  el_after_av_two_third  el_before_av_one_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-k165te90-e17fbfeec5672c6a532eb2b83c84385e '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><h2>I. Previous legal situation and background<\/h2>\n<p>Under German law, an employee is defined as a person who is obliged by an employment contract to perform work in the service of a third party on the order of others in personal dependence. The employer\u2019s right to give instructions may include content, execution, time and place of the work. In contrast, an employee who works for a company on the basis of a freelance employment contract can essentially design and organize his or her activities and working hours freely. If a managing director is to be regarded as an employee in an individual case, this may lead to the application of employee protection regulations as well as consumer protection regulations and the jurisdiction of the labor courts.<br \/>\nAccording to the case-law of the BGH, the managing director of a GmbH so far had to act on the basis of a freelance employment contract &#8211; and not on the basis of an employment contract. On the other hand, the BAG has repeatedly pointed out in the past that the contract underlying the activity of a managing director can also be concluded as an employment contract.<br \/>\nIn the decisions reviewed herein, the BAG now denies the employee position of the managing director of a GmbH, while the BGH affirms it. In both cases, the suing externally hired managing directors objected against a termination given by the GmbH.<\/p>\n<h2>II. The managing director as an employer-like person &#8211; the decision of the BAG<\/h2>\n<p>In the case decided by the BAG, the managing director of a GmbH sought to bring the legal dispute about her dismissal before the labor courts. However, they only have jurisdiction in disputes in which there are employers on one side and employees or at least employee-like persons on the other.<br \/>\nThe BAG denies the jurisdiction of the labor courts in the case decided by it. The court points out in its reasoning that the activity of the suing managing director on behalf of the GmbH did not show any degree of personal dependency which would constitute an employment relationship when all circumstances were considered as a whole. This resulted from the fact that, according to the contract between the GmbH and the managing director, the determination of the place and time of her activities was reserved for the managing director herself. In addition, the restrictions on the content of the managing director&#8217;s activities given in the specific case, such as a duty of disclosure and a reporting obligation towards the shareholders&#8217; meeting as well as her obligation to be bound by resolutions, orders and instructions issued by the shareholders&#8217; meeting were merely a consequence of her position as managing director.<br \/>\nNor is the managing director an employee-like person because the managing director of a GmbH is not comparable to an employee in terms of his or her social position. Instead, he or she was a social antagonist of the workforce because, as an unrestricted representative of the GmbH, he or she also performs employer functions.<\/p>\n<h2>III. The managing director as an employee \u2013 the decision of the BGH<\/h2>\n<p>The BGH, on the other hand, had to deal with a case in which an externally hired managing director objected to a termination of the GmbH based on a termination option provided for in the parties&#8217; employment contract in the event that the managing director entered the 61st year of life. It had to be clarified whether this provision infringes the prohibition of discrimination on grounds of age as laid down in the German General Equal Treatment Act [<em>Allgemeines Gleichbehandlungsgesetz &#8211; AGG<\/em>].<br \/>\nThe question arose as to the applicability of the prohibition of age discrimination to the managing director. Pursuant to section 6 para. 3 AGG, the AGG is to be applied mutatis mutandis to managing directors when it comes to provisions on access to employment or career advancement. The case before the BGH, on the other hand, concerns regulations on the dismissal of a managing director, so that the applicability of the AGG cannot be based on section 6 para. 3 AGG. The BGH nevertheless affirms the applicability of the AGG because it regarded the managing director as an employee to whom the prohibition of discriminatory dismissal conditions pursuant to section 6 para. 1 sentence 1 no. 1 AGG was also applicable.<br \/>\nThe BGH states that the term \u201cemployee\u201d in the AGG is not to be equated with the term \u201cemployee\u201d in German law because the AGG derives from EU law. For the purposes of European Union law, the manager of a company is an employee if, for remuneration, he provides services to the company, carries out his duties in accordance with the instructions or under the supervision of that company and may be dismissed from his post at any time without restriction.<br \/>\nIn the present case, the externally hired managing director was subject to comprehensive auditing and monitoring rights of the shareholders&#8217; meeting and its instructions. In addition, the GmbH could generally revoke the appointment of the managing director at any time in accordance with section 38 para. 1 German Law on Limited Liability Companies [<em>Gesetz betreffend die Gesellschaften mit beschr\u00e4nkter Haftung &#8211; GmbHG<\/em>]. In the opinion of the BGH, the activity of the managing director thus fulfilled the requirements of the EU employee concept. The managing director should therefore be regarded as an employee within the meaning of the AGG As a result, the managing director benefits from the comprehensive protection against discrimination provided by the AGG.<\/p>\n<h2>IV. Two courts, two conflicting decisions?<\/h2>\n<p>Even if it may appear differently at first glance, the decisions of the BGH and the BAG can still be aligned with each other. For the BGH, the reason for classifying the GmbH managing director as an employee is only the applicability of the term \u201cemployee\u201d under EU law, which is broader than the German term \u201cemployee\u201d. The BAG, on the other hand, bases its decision on the German concept of an \u201cemployee\u201d. As a result, the BAG does not contradict its earlier case law according to which a managing director may have an employee status as it still does not fundamentally exclude the possibility that a managing director may work for the GmbH on the basis of an employment contract. In fact, it was only in the specific case to be decided that there was no sufficient personal dependence on instructions and thus no employee status of the managing director.<br \/>\nTherefore, the decisions do not represent a change in jurisdiction, but rather a consistent continuation of the differentiation between national and EU law concepts of employees. In its decision, the BGH expressly refers in this respect to its previous case law, according to which the managing director of a GmbH does not generally have any employee status when applying the German concept of employee. It can therefore be assumed that discrepancies between the case law of the BGH and that of the BAG on the question of the status of an employee as a GmbH managing director will continue to exist.<\/p>\n<h2>V. Consequences and practical advice<\/h2>\n<p>As in the past, the BAG&#8217;s decision described above will continue to entail the risk that the labor courts will also regard  externally hired managing directors of a GmbH as employees under German law. In order to avoid this &#8211; and in particular the resulting applicability of the employee protection provisions to the managing director &#8211; special caution is required when determining the rights and obligations of the managing director of a GmbH within the framework of drawing up a contract.<br \/>\nDue to the BGH decision described herein, contractual termination options in connection with the age of a managing director are to be considered problematic. In its ruling, however, the BGH points out that such regulations may exceptionally be justified by company interests and company-related interests. Such provisions should therefore also be formulated with due care.<\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-7n2zt0-8bdd81e7d2ed0bae5b342783b6e9765b\">\n.flex_column.av-7n2zt0-8bdd81e7d2ed0bae5b342783b6e9765b{\nborder-radius:0px 0px 0px 0px;\npadding:7px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-7n2zt0-8bdd81e7d2ed0bae5b342783b6e9765b av_one_third  avia-builder-el-8  el_after_av_two_third  avia-builder-el-last  sy-only-desktop hide_on_print flex_column_div  column-top-margin'     ><p><div  class='avia-builder-widget-area clearfix  avia-builder-el-9  el_before_av_textblock  avia-builder-el-first '><section id=\"categories-3\" class=\"widget clearfix widget_categories\"><h3 class=\"widgettitle\">Newsletter issues<\/h3>\n\t\t\t<ul>\n\t\t\t\t\t<li class=\"cat-item cat-item-265\"><a href=\"https:\/\/it-landgraf.de\/en\/category\/2025-q3-en\/\">2025 Q3<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-267\"><a 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Law<\/a><\/li>\n<li><a href=\"http:\/\/9zh.f5b.myftpupload.com\/en\/taetigkeitsgebiete\/employment-law\/\">Employment Law<\/a><\/li>\n<\/ul>\n<\/div><\/section><br \/>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-e8cj8-602c909ee9af34dfded0127abb15e98d\">\n#top .hr.hr-invisible.av-e8cj8-602c909ee9af34dfded0127abb15e98d{\nheight:8px;\n}\n<\/style>\n<div  class='hr av-e8cj8-602c909ee9af34dfded0127abb15e98d hr-invisible  avia-builder-el-11  el_after_av_textblock  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div><br \/>\n<section  class='av_textblock_section av-2tuxck-e3971dd19168d3f27eb8eefe25372e4c '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock hide_on_print'  itemprop=\"text\" ><h2>Downloads<\/h2>\n<p><a href=\"#\" onclick=\"window.print();return false\">Print<\/a><br \/>\n\n\n\n\t<div class=\"dkpdf-button-container\" style=\" text-align:left \">\n\n\t\t<a class=\"dkpdf-button\" href=\"\/en\/wp-json\/wp\/v2\/posts\/4119?pdf=4119\" target=\"_blank\"><span class=\"dkpdf-button-icon\"><i class=\"fa fa-file-pdf-o\"><\/i><\/span> Download (PDF)<\/a>\n\n\t<\/div>\n\n\n\n\n\n<\/p>\n<\/div><\/section><\/p><\/div><\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='after_section_2'  class='main_color av_default_container_wrap container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-4119'><div class='entry-content-wrapper clearfix'>\n","protected":false},"excerpt":{"rendered":"<p>Two current decisions are addressing the question, whether an (externally hired) managing director of a limited liability company can be regarded as employee. While being denied by the Federal Labor Court in its decision of 21 January 2019 (file no. 9 AZB 23\/18), the Federal Court of Justice grants an externally hired managing director the status of an employee (decision of 26 March 2019, file no. II ZR 244\/17). Nonetheless, the two decisions are not contradictory.<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"mc4wp_mailchimp_campaign":[],"footnotes":""},"categories":[150],"tags":[],"class_list":["post-4119","post","type-post","status-publish","format-standard","hentry","category-2019-q3-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts\/4119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/comments?post=4119"}],"version-history":[{"count":4,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts\/4119\/revisions"}],"predecessor-version":[{"id":4124,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/posts\/4119\/revisions\/4124"}],"wp:attachment":[{"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/media?parent=4119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/categories?post=4119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/it-landgraf.de\/en\/wp-json\/wp\/v2\/tags?post=4119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}