Hessian Finance Court also stops Minimum Wage Act (Mindestlohngesetz - MiLoG) checks

Created date: 2018-12-17

With the resolution dated 07.11.2018 (file no.: 7 V 476/18), the Hessian Finance Court in Kassel stopped the minimum wage check of a Polish transport company at the main customs office in Gießen. The main customs office in Gießen had identified the driver at a German motorway service station during an international transport with a loading point in Germany and now wanted to demand the driver's wage documents from the employer to check for the German minimum wage.


Within the framework of the temporary legal protection, the Hessian Finance Court stopped this check due to serious doubts about the underlying order for a review by the main customs office. The Fiscal Court justified its doubt that the legal issues of the legality of an auditing regulation in accordance with § 2 of the Illegal Employment Act for foreign transport companies have been handled in at least five lower-court rulings as well as two rulings by the German Federal Constitutional Court (Bundesverfassungsgericht) and civil court case law and the rulings have indeed sometimes been opposing. In addition, numerous diverging legal opinions exist in the legal literature because the legal opinions on the rulings and decrees have sometimes clearly been quite opposing. Insofar as this is evident, a ruling by the highest court of the German Federal Fiscal Court has not been issued so that substantial doubt exists from a legal perspective.


Previously, the Berlin-Brandenburg Finance Court (file no.: 1 V 1175/17) had forbidden the minimum wage check of a Polish transport company due to serious doubts as to the conformity of the law with European law when applying it to foreign transport companies for all types of transport. In addition, the Weißenburg District Court (file no.: 1 C 435/16) and Ansbach Regional Court (file no.: 1 S 872/17), had declared MiLoG not to be applicable to foreign hauliers, even in the case of cabotage, due to infringement of the European freedom of services. The MiLoG also does not stand up to scrutiny under European law before courts abroad. Thus, the Austrian Supreme Court (OGH) has already issued a ruling on 29.11.2016 (file no.: 9 ObA 53/16 (h) declaring MiLoG inapplicable to a driver commuting from Salzburg to Munich.


In contract, the Fiscal Court of Baden-Württemberg declared the auditing of a Slovakian transport company to be legal and in compliance with European law in a ruling of 17/07/2018 (File Ref. No.: 11 K 544/16). However, not all aspects relevant to European law were the subject of the proceedings. Moreover, this decision is not yet legally binding and has been submitted to the Federal Finance Court for a ruling. As essential questions regarding the determination of the minimum wage and the scope of application for foreign transport companies have not been clarified, the submission of audit documents to the German main customs offices is currently like a game of Russian roulette. For example, the question of the crediting of Polish daily allowances and lump sums for overnight stays in 2015 has still not been resolved by the courts. However, whether a Polish driver would have had to receive € 14.07 per hour in 2015, or – like German drivers – only € 8.50 per hour in 2015, taking into account mandatory wage components in Germany and Poland, depends on the legally binding definition.


The German customs authorities have also announced four different exchange rate provisions for the conversion rate, which alone give rise to a differential risk of up to 5%.

In addition, the secondary obligations (in particular the reporting obligation) of the Act, which only apply to foreign and not to domestic companies, turn out to be predominantly cost-intensive bureaucratic harassment. The EU Commission had already criticised the disproportionate nature of the secondary obligations for foreign transport companies resulting from the MiLoG when initiating the infringement proceedings.


In addition, it appears the chickens are coming home to roost, as the Posted Workers Act (Arbeitnehmerentsendegesetz – AEntG) regulations designed primarily for construction services have been transferred to the transport sector without taking into account the special features of the sector. While a worker employed in the construction sector is only posted to a country whose labour and social security regulations must be taken into account in addition to those of his home country, a driver comes into contact with the systems of up to 28 EU member states in one month. As European harmonisation has not yet taken place, the employer is confronted with wage accounting requirements that contradict one another on central points and that make uniform and legally compliant accounting objectively impossible.


In addition, there is not even uniform treatment in the individual Member States as to the types of transport to which the respective national minimum wage obligation should apply. In Germany, the Federal Ministry of Labour and Social Affairs issued a press release in January 2015 "temporarily suspending" checks and fine proceedings on transit transports. Whether or not a driver can demand the minimum wage for transit journeys for the period from 2015 until today according to the will of the Federal Government is not clear from the press release, let alone from the law or the associated ordinances.


Due to this massive legal uncertainty, it is more than incomprehensible that the Federal Republic of Germany has so far not been able to bring itself to decide on an exception to the MiLoG for the transport sector or at least to suspend it until the European mobility package comes into force. At present, the MiLoG in the transport sector therefore seems primarily market protectionist, especially since the labour market does not allow any employment below the German minimum wage rates for the drivers who are desperately sought after throughout Europe.


The judicial objections to the handling of the MiLoG are therefore hardly surprising.


The full text of the decision (PDF)