Employee was not Employed by the Payroll Company

An employee whom the employer had not properly informed about the transfer of her employment contract to a payroll company could annul the termination of the employment contract with the original employer due to error.
As of November 2016, a catering company had employed a female employee. After three consecutive fixed-term employment contracts, the employment contract had tacitly been extended for an indefinite period of time in September 2018. The latest written agreement mentioned an average working scope of ten hours per week. The employee had been classified in the lowest CLA scale and earned the minimum wage.
In 2019, the catering company had entered into an agreement with a payroll company, to which it wanted to transfer its staff. In September 2019, the employee had signed a payroll company employee card stating that she would be employed by the payroll company as of September 1, 2019 and that her employment contract with the catering company would be terminated on August 31, 2019.
In October 2019, the catering company assured the employee in writing that everything would remain the same in the transfer to the payroll company. According to the employer, the amount of the salary at the payroll company was consistent. Then the employee signed an employment contract with the payroll company. Under this contract, among other things, the CLA for temporary workers (NBBU) applied, which implied that the employment contract was entered into for a period of 37 weeks, that the number of working hours was at least one hour per calendar quarter and that, in the event of illness, 90% of the wage would be paid, after deduction of two waiting days.
In 2020, the catering company had been closed for some time due to the Covid pandemic.
The catering company then offered its employees to borrow an amount equal to the average wage earned in the preceding three months. It was agreed that any State compensation due to the inability to work during the pandemic would be used to reimburse the loan. The employee thus borrowed an amount of € 2,100.
In July 2020, the employee reported sick. The payroll company paid a sick pay of € 180 per month. Finally, on August 1, 2021, the employee left the service.
After having left the service, the employee claimed that the catering company should pay her back wages, based on a working scope of 70 hours per month. She relied on the legal presumption according to which the working hours were considered to be equal to the average working scope of working hours during a three months period. She also claimed that she had remained employed by the catering company, also after September 1, 2019.
The Sub-district Court rejected the claims because the employee had agreed to the termination of the employment contract with the catering company by signing the employee card first, and the employment contract with the payroll company later.
On appeal, however, the Court of Appeal decided that it should be assessed whether the employee had made a mistake and whether the catering company had provided the employee with incorrect or incomplete information. The Court decided that the information provided had been incorrect. After all, not everything had remained the same in the transfer to the payroll company.
The agreement for an indefinite period was changed into a fixed-term contract.
The scope of the working hours had become at least one hour per three months instead of 70 hours per month.
And the sick pay had become lower, to which the Court added that, during illness, the employee should, in any case, receive the minimum wage.
For these reasons, the termination of the employment contract was voidable due to error. The Sub-district Court had ruled that the employee should have dissolved the agreement to terminate the employment contract with the catering company within three weeks, but according to the Court of Appeal, the three-week period only applies to the right of withdrawal, not to an annulment due to defect of consent, such as error, as well.
Since, thus, the employee had remained employed by the catering company, the employee's wage claims are allowable. The amount of the loan provided should be offset against the net amount of the wage claim.

In practice, employers who want to do business with a payroll company sometimes underestimate "the transfer" of existing employees to the payroll company. Sometimes it is even unilaterally carried out and employees suddenly receive a pay slip and their salary from the payroll company. For a transfer to a payroll company, however, the employee's cooperation in terminating the existing employment contract and entering into a new employment contract with the payroll company is required. If the employer does not fully or incorrectly inform its employees about the consequences of the transfer for the employees, or if the employer does not allow the employees the freedom to decide freely, employees can subsequently annul the termination of the employment contract with the original employer due to defect of consent, such as mistake, fraud or unfair exploitation of circumstances.