Germany: Referees and Theatre Directors – Federal Labour Court on Employee Status

Structuring options for employers: distinguishing freelancers from employees via consensus principles and instruction rights

The Federal Labour Court (BAG) issued two decisions shortly before the end of 2025 on the distinction between employees and freelance service providers – and thus on the jurisdiction of the labour courts. Whilst it classified assistant referees of the 3rd Football League as freelance service providers (BAG, 03.12.2025 – 9 AZB 18/25), the court classified the general director of a municipal theatre as an employee (BAG, 02.12.2025 – 9 AZB 3/25). The differing outcomes – which are not novel in substance – illustrate what employers should consider when making such classifications and what scope they should use for structuring.

Respective contractual arrangements and practice are decisive

The assistant referee missed out on a potential framework agreement with DFB Schiri GmbH for deployment in the 3rd Football League - which is why he brought a claim against them. This contract would not have provided for an obligation to accept match officiating duties but would only have assigned these according to the consensus principle. Exemptions could have been registered, and assignments could still have been declined even after allocation. Remuneration would have been paid per match deployment.

The contractual situation in the case of the general director was different: he concluded a fixed term 'director's contract' with a municipal theatre, which he managed jointly with the administrative director, being independently responsible for artistic decisions (programme, casting, direction). He was subject to the legal supervision of the mayor, who could also intervene in all areas in the event of disagreements with the administrative director. He was paid monthly.

Employee status is not dependent on profession or sector

The respective legal basis of both decisions of the 9th Senate is the concept of 'employee'. Pursuant to Section 611a (1) of the German Civil Code (BGB), an ‘employee’ is a person who is obliged to perform work subject to instructions and determined by others in personal dependence. A person is subject to instructions if they cannot essentially freely organise their activities and determine their working hours. What is always decisive is an overall assessment of all circumstances in the individual case – both for referees and theatre directors. The nature of the respective activity determines the degree of personal dependence on the employer or client. As a general rule, many activities can be carried out both in an employment relationship and in a freelance service relationship – what is decisive and thus determinative for the applicability of various (protective) provisions is rather the actual structuring of the contractual relationship.

The director is subject to instructions – the referee is not

The BAG rejected the argument that the assistant referee was subject to instructions on the grounds that he could exclude assignments in advance through 'exemptions' and could still decline them even after allocation without having to fear sanctions. Rather, the consensus principle applied to each individual match deployment; a unilateral instruction by DFB Schiri GmbH to participate in a specific match was not possible. During the match, he officiated without being subject to instructions, solely on the basis of football rules. Even in the case of an incorrect assessment, his decisions were binding and could only be corrected by the referee himself. Furthermore, only a deployment-related payment was to be expected, which indicates a service relationship.

The situation was fundamentally different for the general director: Despite extensive artistic freedoms, he was subject to material instructions from the mayor – including process-oriented ones. Moreover, the general director was heavily integrated into the division-of-labour organisation of the theatre; meaning that permanent close coordination with the administrative director was unavoidable. A further indication of personal dependence was that the mayor decided in the event of disagreements. Additionally, the general director received a fixed monthly gross salary – typical of an employment relationship.

Practical recommendations for employers

• define rights to issue instructions precisely: result-oriented specifications and the consensus principle are indicative of freelance work, while process-oriented instructions are indicative of employment relationships
• plan organisational integration: the stronger the integration into division-of-labour processes or the operational organisation, the more likely an employment relationship exists
• choose the remuneration model deliberately: fixed monthly salaries indicate employment relationships, while purely deployment-related remuneration indicates freelance service relationships
• clarify obligations and dependencies: approval requirements for secondary activities, certificates of incapacity for work and detailed holiday regulations are indicators of employment relationships
• keep the overall assessment in view: even if individual aspects indicate freelance work (such as the general director's freedom to organise his time), other circumstances (such as comprehensive rights of the employer to issue instructions) may prevail in the overall assessment!

Use scope for structuring!

Both decisions demonstrate that a highly qualified or specialised activity can in principle be carried out both in an employment relationship and as freelance work. The distinction is not a question of job title or sector, but of the respective actual and concrete structuring. Employers have scope for structuring but must use it consistently. Those who wish to engage freelance service providers must, for example, also grant them genuine freedom in accepting and executing assignments. Those who, on the other hand, establish rights to issue instructions, organisational integration and employee-like obligations must expect the assumption of an employment relationship – regardless of what the contract states.