Esports and international workers?

On the topic of when and whether an esports team should consider a player an employee or a contractor, I’ve written quite a bit here on the blog. But, if one is correct, these statements are all big crap. For it must always be kept in mind that it is fundamentally impossible to regulate at all whether an esports player is an employee or a contractor. Indeed, the status under social security law cannot be settled between two parties. The social security lawyers (or the labor lawyers) would say: “Would be even nicer!”. The status held by an esports player is determined solely by the circumstances under which the player works for the team.

A player is self-employed only if he is essentially free to determine his activity, place of work and working hours. In the case of dependent employment, there are more obligations from which the employer can exercise control and supervision. An employment relationship is distinguished by the degree of personal dependence. The delimitation can be complicated in detail and this can really only be definitively found out through a status determination procedure.

In esports, the situation is now even more complicated. This is because esports teams often even consist of players who reside in different EU countries, and in some cases even live outside the EU. This must often be checked here first, which law applies at all. And that can often be really complicated. If a contract contains a pure choice of law, or if such a choice is not permissible, the applicable law for individual employment contracts shall be determined in accordance with Art. 8 Rome I Regulation:

Unless the law applicable to the employment contract is determined by choice of law, the employment contract shall be governed by the law of the country in which, or otherwise from which, the employee habitually performs his work in fulfillment of the contract. The state in which the work is usually performed does not change if the employee temporarily performs his work in another state.

It is true that one reads from time to time that where the work is done can depend on where the team is located, because it is from there that the instructions emanate. However, this is not likely to be the majority legal opinion. Rather, it can be assumed that the work is performed where the associated computer is operated most of the time. If this is the case, things get really complicated. As far as possible, a choice of law should be made so that the employee status in Germany is then determined according to § 611 a BGB. At least in the case of professional teams where the player wants to earn his living from the activity, it is to be assumed according to the Federal Labor Court, in line with the ruling on competitive athletes, that performance of work is present when “playing”. This should be even more true for players from other countries, where the professionalization of esports is much more advanced than in Germany.

Players from other countries must then also be measured against the criteria as to whether or not they qualify as employees. As outlined above, one of the most important criteria is whether the player is obligated to perform work for the team under instructions and in a state of personal dependency (§ 611 a I 1 BGB). This is likely to be the case with professional teams in particular, as there is no need to have ongoing “rosters.” The location of the activity is also relevant here. A gaming house (even only temporarily) probably leads to an affirmative answer to this criterion in most cases, but also the pure activity via the Internet can have a location-related nature in that the manner, times and equipment of the “workplace” are specified or even provided. Other aspects are time constraints and the constraint of instructions (where, when, how and in which way a player should play, which sponsorships he has to carry out, what he has to stream where, when, how, what he has to call himself and much more).

Especially for teams that, for a variety of reasons(see this article), want to avoid having their players classified as employees, adjustments can be made to the above set screws, especially for internationally active players. However, the various advantages and disadvantages must be taken into account.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.