In an original article for FONDS professionell ONLINE, attorney Johannes Fiala and actuary Peter Schramm explain why they consider the decision of the Bavarian State Social Court on the obligation of a broker to pay pension contributions to be correct.
The ruling of the Bavarian State Social Court (LSG) on the pension insurance obligation of certain brokers has caused a great stir in the industry. The AfW Bundesverband Finanzdienstleitung has sharply criticised the ruling and classified it as a individual decision. This assessment is contradicted by Johanes Fiala, a Munich-based specialist lawyer for insurance law, and Peter Schramm, an actuary. They consider the argumentation of the LSG, which draws a comparison with franchise companies, to be correct and thus also the conclusion that formally independent brokers may possibly be in such a dependent relationship with a pool of brokers. Read the original commentary below. (jb)
A recent judgement of the Bavarian Regional Social Court (LSG Munich, judgement of 3 June 2016, ref. L 1 R 679/14) has as a result ordered an insurance broker to pay statutory pension insurance contributions. A (supposedly different) legal relationship between insurers, pool and insurance broker does not even matter. Reality beats the appearance of the wording.
Insurance distribution law has no influence on social security law
The LSG cited the analogous example of the franchisee in the grounds of the judgment. The franchisee is also an employee-like self-employed person, because economically he is de facto dependent on the franchisor. Here, too, the situation for the franchisees is often glossed over in order not to make them too aware of their dependency, by whitewashing them with fine words.
In social security law, what matters is the facts, the lived practice. If, for example, an employer does not pay wages, he/she is still liable for social security contributions because of work performed – but not for the declaration and payment of income tax. The factual is the uncancelled employment contract and the actual cooperation. Experts speak of the “phantom wage” – which is not paid, but from which social security is nevertheless owed.
Employment-like – genuine – self-employed persons receive at least 5/6 of their income from one source and do not employ an employee – a mini-job does not count. Such self-employed persons owe the full contribution to the statutory pension insurance.
No grossly erroneous decision in individual cases
Pools can be de facto ‘sales agents’ for the pool broker on the basis of the judgment.
If, for example, a self-employed bricklayer concludes a contract with Hochtief AG, according to which Hochtief is merely a possible subcontractor to whom the complete order can also be passed on, and thus appears, with the entire offer and all machines from Hochtief, but actually arranges orders only for Hochtief, with him as the contractual partner, which are then immediately transferred to Hochtief, then employee similarity as a self-employed person would be the order of the day, possibly even bogus self-employment.
de facto employee similarity in the case of franchisees and pool brokers
The franchisee, for instance in the catering sector, may also not sell products of the franchisor but of suppliers to whom he only gets access through the franchisor. It is therefore also irrelevant for pension insurance that the pool is not used to broker the latter, but rather products of many insurers to which the pool only provides access.
And, of course, the franchisee is responsible for the customers who visit him, for example that they do not fall down or get food poisoning. He even has a big responsibility and does not get the customers sent by the franchisor. He also bears a great economic risk. He is therefore undoubtedly self-employed – but economically dependent on the franchisor and thus similar to an employee. Therefore, it does not matter that the broker is the legal guardian of the individual policyholders and is liable for his advice.
In terms of the Social Security Code (SGB), the many customers are nevertheless not his clients. Just as the customer who asks to be shown a red-green striped tie is not the client of the employed salesperson. The insurance broker does not have such special features that he cannot be judged according to the usual criteria according to SGB.
Of course, it is only about those brokers who do more than 5/6-ths of their business with a pool. These can be quite a few, as there are pools that offer brokers everything they need. Especially brokers who offer their customers an all-round service, i.e. who are not specialized in certain products and work alone, hardly get enough direct connections to insurers due to lack of turnover and are therefore de facto dependent on pools.
Self-chosen occupational profile leads to employee similarity
This is precisely the ideal image that many brokers have of themselves. They tend to work alone. It is to be expected that these social security audits will now become a system and not remain an isolated case. The Auditing Service of the German Pension Insurance Association (DRV) is taking this up. Each broker can then assess whether he is one of those (however many) who are affected. If necessary, the broker must then prepare for subsequent payment of the RV contributions for five years or an amount of 50,000 euros.
The LSG is not interested in what is written on paper, but in how it is actually lived. It is not impressed by attempted (self) deception. Pool brokers must therefore recognise that they may be dependent on pools in a similar way to employees. Her client is the pool – her supposed client is not hers.
Even the fact that the broker – often only theoretically – can change the pool or is directly linked to insurers does not make him independent as long as he is actually dependent on the pool. Nor are all dependent employees independent just because they can change employers or become self-employed – even if they could take the customers they have recruited with them.
by courtesy of
www.fondsprofessionell.de (published on 05.07.2016)
