26 December 2012

Place of work determines applicable law

By Godelijn Boonman

The Rome Convention determines the law applicable to contractual obligations entered into between 1 September 1991 and 17 December 2009.

Both this convention, as well as its modernised successor, the Rome I regulation, contains special rules for individual employment contracts.

Collision rules

Rome I determines the applicable law to be the law chosen by the parties. However, the employee cannot be deprived of the protection of rules that may not be derogated from under the law that would have been applicable in the absence of a choice. Rome I stipulates a clear order of elements, which determines the applicable law if the parties did not make a choice of law.

The contract shall be governed by the law of the country:

a. in which or, failing that, from which the employee habitually carries out his work.
b. where the place of business through which the employee was engaged is situated.
c. where it appears from the circumstances as a whole that the contract is more closely connected with a country other than that indicated in paragraphs a or b, the law of that other country shall apply (rule of exception).

The Rome Convention incorporates materially the same rule in article 6 sub 2 a) and b), but it does not prescribe an order between sub-paragraphs a) and b).

Modernisation by the European Court of Justice

In two recent cases concerning the transport and the maritime sector (ECJ 15 March 2011, C-29/10 Koelzsch/Luxemburg and ECJ 15 December 2011, C-384/10 Voogsgeerd/Navimer), the Court ruled that the order stipulated in Rome I , must be deemed to apply in relation to article 6 sub 2 a) and b) of the Rome Convention as well. Sub-paragraph b) only becomes relevant, if it is not possible to determine the applicable law using the criterion of the place “where the employee habitually carries out his work”.

This criterion must be interpreted broadly, which is especially relevant in relation to the transport and the maritime sector, as employees often work in many different countries in these sectors. Indicators include the place from which the employee embarks, the means of transport and to where he returns afterwards, the place where he takes instructions, where he organises his work and/or where tools are stored.

Only if these indicators do not allow the determination of the applicable law, does the law of the place of business of the employer apply. Only procedural facts are to be taken into account when determining the place of business, not factors related to the work of the employee. Furthermore, the place of business must have a permanent character.

Killing two birds with one stone

The Court has given an important interpretation to the Rome Convention, as well as to Rome I by the rulings cited above. Firstly, the Rome Convention is now modernised, as a fixed order must be deemed to exist between sub-paragraph a) and b). Secondly, it seems reasonable that the indicators which are to be taken into account when applying sub-paragraph a) and b) are also applicable in relation to Rome I. Furthermore, a third ruling is expected, as the Dutch Supreme Court has posed prejudicial questions concerning the rule of exception in the Schlecker/Boedeker case. Hopefully, this ruling will introduce even more clarity in relation to the Rome Convention and Rome I.

Questions? More information?

Please feel free to contact us for legal advice on this topic or related questions.

 

Godelijn Boonman

Godelijn Boonman

Lawyer / partner

Godelijn Boonman has focused entirely on employment law for over 20 years, with international employment law playing an increasingly important role in her practice.

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