Abstract
This contribution deals with both jurisdiction and applicable law with regard to cross-border collective actions in labour law. It demonstrates that the European conflicts rule embodied in Article 9 of the Rome II Regulation is open to diverging interpretations. This can, to a large extent, be explained by the very diverse legal characterisation of industrial action in the national systems of the EU Member States. The connecting factors used in the Rome II Regulation also create specific challenges when applied in the context of industrial action. As a result of these complications, Article 9 Rome II currently fails to fulfil its function of creating legal certainty around the legality and the legal consequences of industrial action with a cross-border element. A further clarification of the scope of Article 9 and the role played by the law of the country in which the industrial action is taken would help to reduce the current confusion and uncertainty. The uncertainty as to the applicable law is exacerbated by the rules on jurisdiction in the Brussels I bis Regulation which allow, to some extent, for forum shopping. Two provisions of the Brussels I bis Regulation might warrant revision to reduce their negative impact on the exercise of the right to industrial action: the rule on multiple defendants (Article 8(1)) and the rule granting jurisdiction to the place where the damage caused by the industrial action is sustained (Article 7(2)).
Introduction: the private international law framework
When relationships between private parties have a cross-border element, for example, because the parties are domiciled or established in different countries, several questions arise that would not be relevant in fully domestic cases. Take, for example, a case like the DFDS Torline Caledonia case, in which a Swedish trade union, supported by an international trade union association based in the UK, gives notice of an industrial action against a Danish company that operates a ferry between Sweden and the United Kingdom in order to persuade the employer to sign a (new) collective agreement on behalf of the Polish crew. In such cases, it is not immediately obvious which court has jurisdiction over the case and which law it should apply in respect of the question of whether the action is permitted or not. 1 The rules on these issues are, to a large extent, unified in two Regulations: the Brussels I bis Regulation on jurisdiction and recognition of judgments 2 and the Rome II Regulation on the applicable law to non-contractual obligations. 3
The Brussels I bis Regulation distributes jurisdiction between the courts of the Member States. The main rule contained therein (Article 4) gives general jurisdiction to courts of the Member State in which the defendant is domiciled. 4 However, Article 7 of the Regulation also offers alternative jurisdiction – in contract cases, to the courts of the place of performance of the obligation in question (paragraph 1); and in tort cases, to the courts of the place where the harmful event occurred or may occur (paragraph 2). The place where the harmful event occurred can be both the place where the tortious act took place (locus actus) and the place where the damage was sustained (locus damni). Except where the Regulation provides otherwise, parties may also choose to confer jurisdiction on a specific court (Article 25). When several defendants are sued on the basis of claims that are closely connected, the claimant may sue them all in the domicile of one of them. This means that in the example given above, we would have to determine the place where the industrial action has been taken, but also the place where the damage has been sustained. The employer may choose to sue both the Swedish trade union and the international association in Sweden or rather in the UK. 5
There is an abundance of case law on the concepts used in Regulation Brussels I bis, such as the concept of tort, the place where damage occurred or the place where the tortious act took place. These concepts were already used in the predecessors of the current Regulation Brussels I bis (Regulation 1215/2012): the Brussels I Regulation (Regulation 44/2001) and the Brussels Convention, which makes the case law interpreting the parallel provisions in these older instruments relevant even today. However, some aspects of the Brussels I bis Regulation are problematic when it comes to industrial action. These will be discussed in Part II of this contribution. Part I focuses on applicable law.
As explained above (and discussed in more detail below), the rules on jurisdiction contained in the Brussels I bis Regulation make it possible, in cross-border cases, for courts in more than one country to have jurisdiction. This is also true in cases in which questions are raised – either directly or indirectly – regarding the legality of an industrial action and/or the non-contractual obligations arising from such action. Hence the plaintiff has a distinct opportunity to engage in forum shopping. It is undesirable that such forum shopping would result in law shopping as well. The outcome of a dispute on the legality of an industrial action should not depend on the forum before which the dispute is taken. This need for decisional harmony is not only stipulated as one of the main goals of unification of choice of law rules in the preamble of the Rome II Regulation, 6 but it is crucial when the applicable law affects the enjoyment of a fundamental right, such as the right to industrial action. Unions and workers need to know in advance whether the action they contemplate taking is legal or not and whether an agreement entered into to end or prevent the industrial action will be held to be binding when challenged in court. Hence there is a need for a common choice of law rule which would offer all parties to collective disputes the necessary legal certainty as to the legality of their actions.
Article 9 Rome II contains a special rule on industrial action that is meant to ensure that the non-contractual liability arising from such action is dealt with by a conflict of law rule that is more adequate for dealing with that type of claim than the general rule of Article 4 of the Rome II Regulation. In two articles published in 2011/12, Filip Dorssemont and I discussed several issues regarding the interpretation and application of Article 9 Rome II which may all contribute to a lack of decisional harmony. 7 A quick scan of more recent literature and case law, conducted in January and February 2023, suggests that most of the issues that were identified at the time still exist. 8 Authoritative interpretation by the Court of Justice of the European Union (CJEU) is lacking 9 and national case law is scarce and inconclusive. 10 As a result, the Rome II Regulation has, to date, failed to achieve the goals of legal certainty and decisional harmony around the applicable law in cases of industrial action. What the problems are, and how these could be addressed, will be discussed in Part I of this contribution. The main findings are summarised in the concluding paragraph.
Part I: the law applicable in cases of industrial action 11
The Rome II Regulation on the law applicable to non-contractual obligations contains, in Article 9, a special rule on industrial action, stating: Without prejudice to Article 4(2), the law applicable to a non-contractual obligation in respect of the liability of a person in the capacity of a worker or an employer or the organisations representing their professional interests for damages caused by an industrial action, pending or carried out, shall be the law of the country where the action is to be, or has been, taken.
Article 4(2) reads:
However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.
Finally, under Article 14 the parties may agree to submit non-contractual obligations to the law of their choice, provided this choice is based on an agreement entered into after the event giving rise to the damage occurred.
These provisions raise several questions, some of which relate to the scope of application of Article 9: What is meant by ‘industrial action’ in Article 9? Is Article 9 also applicable to the question of the legality of the action itself, rather than only the liability for damages caused by the action, etc? Others pertain to the connecting factors used in Article 9 and Article 4(2): the place where the damage is sustained and the common habitual residence of the parties. Both aspects will be discussed below.
Very diverse conceptualisation under national law leads to different characterisation in private international law
The concept of industrial action
One problem underlying the differences in interpretation is the diverse conceptualisation of industrial action as a social and legal phenomenon. Though all EU Member States recognise the right to industrial action, the way the phenomenon is categorised legally is very diverse. In some countries industrial action is a constitutionally defined and protected right. 12 Action that falls within the scope of the constitutional definition is protected in law. Action falling outside the scope, however, is illegitimate and not deemed to be industrial action (within the meaning of the constitution). Such a definition makes the question of legality moot: industrial action is by definition legitimate; illegitimate action cannot be industrial action within the meaning of the constitution. Other Member States have a more open definition of industrial action, but not all industrial action is legitimate. The legality of the specific action may depend on various factors, including the goal thereof, the means used, and the procedure followed (see also below).
Individual right or collective right?
Another difference between Member States concerns whether industrial action is seen as a right of the collective (unions) or of the individual workers (albeit enjoyed collectively). 13 This difference in conceptualisation directly affects the starting point for the choice of law analysis. Is the position of individual workers participating in the action dependent on the legality of the actions taken by the unions, or does the position of the unions depend on the legality of the action of the individual workers? If industrial action is analysed from the perspective of the individual worker, not performing the duty to work under the contract of employment is the basic characteristic of the industrial action we call ‘strike’. This could lead to the characterisation of the phenomenon as related to (the individual) contract (of employment). If industrial action, on the other hand, is a right of unions to be exercised in the context of collective negotiations, the right is pre-contractual at the collective level. In other countries, an illegitimate industrial action is dealt with under the law of tort. These differences raise two questions: the first pertains to the question of whether the legality of the action is covered by Article 9 of Regulation Rome II, and the other pertains to the problem of the incidental question.
Issues regarding the scope of Regulation Rome II and Article 9 thereof
National differences
When deciding on whether to grant an injunction or award damages in a case against the organisers of and/or participants in an industrial action, the court will – depending on the national system – have to consider several aspects of the action involved, including who organised the action, with what goal in mind, the means chosen and whether the requirements on procedure have been met. It will also have to consider whether the action is proportionate in light of the damage done to third parties. National systems may contain different rules on each of these issues. A political action might be allowed in one system and illegal in another. Picketing and occupation of the plant may be an acceptable means to put pressure on the employer in one system and forbidden in others. Before organising an industrial action, unions may have to call a vote or parties may be obliged to first engage the services of a special mediation body. Likewise, the impact on third parties may or may not make an industrial action illegal. 14 The rules on each of these points, taken together, constitute the national framework for industrial action. 15
One of the questions discussed in literature concerns the possibility to distinguish between the legality of the industrial action and the ‘non-contractual obligations in respect of the liability for damages caused by an industrial action, pending or carried out’.
16
It has also been suggested the question of which means can be used to put pressure on the employer might not be covered by Article 9 of Regulation Rome II. These differences of interpretation are caused in part by the preamble, which contains two recitals on industrial action:
“The exact concept of industrial action, such as strike action or lock-out, varies from one Member State to another and is governed by each Member State's internal rules. Therefore, this Regulation assumes as a general principle that the law of the country where the industrial action is taken should apply, with the aim of protecting the rights and obligations of workers and employers.” “The special rule on industrial action in Article 9 is without prejudice to the conditions relating to the exercise of such action in accordance with national law and without prejudice to the legal status of trade unions or of the representative organisations of workers as provided for in the law of the Member States.”
But a first question to be answered would be: what is considered an industrial action, triggering the application of Article 9? Or more specifically: which law decides on this issue?
Autonomous interpretation of the concept of industrial action?
Based on recital 27, several authors have suggested that the concept of industrial action for the purpose of determining the scope application of Article 9 should not be interpreted autonomously, but rather should depend on national law. 17 However, different authors would then apply different laws to this question: the law of the forum, the law of the place where the action is taken or the presumed lex causae (the law applicable to the action). Such national interpretation of a concept used in a Regulation is rare – as a rule, the CJEU will interpret concepts used in a private international law Regulation autonomously, unless the Regulation specifically provides otherwise. 18 The principle of autonomous interpretation is expressly stipulated in recital 11 of the preamble. The fact that the concept of industrial action varies between Member States – and that this constitutes a valid reason for having a special rule on industrial action which deviates from the standard rule – seems to offer insufficient ground to deviate from this basic principle. 19 This is all the more true if we take into account the fact that in some systems the concept of industrial action is constitutionally circumscribed and limited to actions deemed to be legal. If that classification is used to determine the scope of application of Article 9, the content of the provision seems to lose meaning – as by definition, participating in an action that is legal under the constitution cannot be a tort.
The legality of the action
This brings me to the second point raised in the literature: the legality of the action as such. In this context it is relevant to refer to the Hrvatske Šume case concerning the scope of application of Article 5(3) of Regulation 44/2001, the predecessor to Article 7(2) of the Brussels I bis Regulation, which deals with special jurisdiction in matters relating to ‘tort, delict or quasi-delict’. 20 In that judgment the CJEU stressed that concepts used in the Regulations on jurisdiction should be interpreted consistently with similar concepts used in the Regulations on applicable law, such as Rome II. In order to determine whether a claim for restitution based on unjust enrichment can be considered to be a tort for the purpose of jurisdiction, the CJEU examined the elements that are constitutive of an action in tort, namely, a harmful event, damage, and a causal link. The harmful event has to be an act that can be imputed to the defendant in that he or she is alleged to have committed an act or omission contrary to a duty or prohibition imposed by law. Based on these requirements, the CJEU decided that a claim of restitution – as it is not linked to any unlawful conduct of the defendant – is not a claim sounding in tort. This suggests that the unlawfulness of the act (or omission) is an integral part of the concept of tort. 21 Article 15 of the Rome II Regulation supports this conclusion by including the basis and extent of liability and the grounds for exemption from liability in the topics to be covered by the law applicable to the non-contractual obligation.
Nevertheless, it is possible to subject different elements of a single legal relationship to different legal systems. This is called dépeçage or severance. Article 3(1) of the Rome I Regulation on the law applicable to contractual obligations contains a provision on dépeçage, allowing parties to submit different aspects of their contractual relationship to different laws. 22 Article 4 of the Rome Convention, which preceded the Rome I Regulation, contained a similar possibility for the court deciding on the applicable law in absence of a choice by the parties. In its paragraph 1, Article 4 stated: ‘To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a separable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.’ This provision was omitted when the convention was transposed into the Rome I Regulation. In the ICF v Balkenende case, the CJEU stipulated that in contractual matters dépeçage is only allowed to the extent that the object of the part of the contract to be governed by a law other than that applied to the rest of the contract is independent from the rest of the contract. 23 The rule providing for the severance of a contract is of an exceptional nature and must be applied restrictively. It cannot be used to subject different obligations within the same contract (or part thereof) or different aspects of a single obligation to different laws.
Given this exceptional status of dépeçage, I doubt that a radical severance between the legality of the action and the consequences thereof can be based on the text of the preamble. 24 All the more so, because recital 27 is open to different interpretations. The recital can also be read as offering a reason for introducing a special rule on industrial action which deviates from the standard application in Article 4 by giving precedence to the place where the harmful event occurs over the place where the damage is sustained. 25
Those authors who on the basis of recital 27 of the preamble advocate for a separate analysis of the legality, subject this question to the law of the country where the action is taken, again on the basis of recital 27. 26 The difference between using the choice of law rules of Rome II and referring directly to the place where the action is taken, is that Article 9 incorporates the rule of common habitual residence of Article 4(2) and leaves open the possibility of choosing the law applicable under Article 14. When rethinking the rules for industrial action in Rome II, it is therefore crucial to discuss the usefulness of these two provisions when dealing with industrial action.
Legal status of trade unions and conditions relating to the exercise of the right
Recital 28 of the preamble seems to take two more issues outside the purview of Article 9. The wording ‘without prejudice’ strongly suggests that indeed the elements mentioned therein – the conditions relating to the exercise of industrial action and the legal status of trade unions – are subject to rules of their own, not deriving from the law that applies on the basis of Article 9. For the legal status of trade unions, this flows naturally from the fact that the legal status of entities is governed by ‘the law of companies and other bodies corporate or unincorporated’. 27 So indeed this question belongs to a different choice of law category.
This is different as regards the conditions relating to the exercise of industrial action. It is not clear from the wording of the preamble whether these ‘conditions’ refer to procedural requirements or, rather, the external manifestations of the industrial action, such as picketing, occupations, blockades and sit-ins. If the latter aspects are referred to, recital 28 can be understood as a specification of the rule of Article 17. This provision stipulates that ‘In assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability.’ As the external manifestations of industrial action may affect the public order of the country in which the action is taken, the general opinion would be that actions taken should respect these local rules, be it as a separate choice of law category, by way of overriding mandatory provisions (Article 16), as local safety and conduct rules (Article 17) or under the public policy exception (Article 26). For discussion of the differences between these private international law techniques, see below.
Tortious acts that are external to the industrial action as such (such as the use of violence against strike-breakers) 28 will be classified as a general tort, leading to the application of Article 4 Rome II. In that case the place where the act takes place and the place where the damage occurs will (most likely) both be located in the country where the action is taken.
The position of third parties
In its reaction to the Common Position of the European Parliament and the Council, the Commission stressed that Article 9 is not meant to be applied to liability for the damage that third parties may suffer as a result of industrial action. However, the Commission did not explain who is considered to be a third party in the case of industrial action. Industrial action can serve different purposes. In a political action, the goal is to put pressure on the government, which is not a party to the contracts of employment of the workers involved in the action. Solidarity actions are meant to put pressure on an employer who, again, is not the employer of the workers involved. One might argue that in those cases the employer whose workers engage in a solidarity action is actually a third party to the conflict, as this employer will not be able to comply with the demands of the workers. But even when the action is linked to collective negotiations that directly affect the workers involved in the action, the direct target might be the negotiating employers’ organisation rather than the individual employer.
Article 9 applies to ‘the liability of a person in the capacity of a worker or an employer or the organisations representing their professional interests for damages caused by an industrial action’. It is therefore limited to claims against workers in their capacity as workers, employers in their capacity as employers, and the other parties involved in their capacity as social partners. That the provision would also be limited to claims by injured parties in any of these capacities does not follow from the wording of the provision and would run against the purpose of providing the parties to the conflict legal certainty as to the law applicable to the legal consequences of their actions. 29 If liability vis-à-vis third parties is indeed submitted to a law different from the law applicable under Article 9, the interaction between the rules should ensure that the legality of the action is judged against the same law, regardless of the context in which the question is raised
The incidental question
The legality of an industrial action can be put to the court as the main question. 30 This would be the case when the employer demands an injunction to stop or prevent the action, but also when the employer takes a claim for damages against the unions (or individual workers) based on the illegality of the industrial action.
But the legality issue can also arise in cases in which the worker or the trade union files a claim based on the collective agreement and the employer argues for nullity of the agreement based on duress. In another scenario, the employee may approach the court to get redress for retaliation measures taken by the employer (e.g., dismissal based on non-performance of the contract during the strike). 31 In the latter two scenarios, the legality of the strike is an incidental question in a contractual dispute.
Lastly, the legality of a solidarity action may depend on the legality of the action it is supporting, raising the issue of legality of the supported action as an incidental question, this time in an action based on tort.
There is no EU rule on how to treat incidental questions. They might be dealt with under the law applicable to the main issue, but may also be subject to their own applicable law. Decisional harmony can only be reached if the law applicable to the (legality of the) industrial action is subject to one and the same law, regardless of the context in which the question is raised. 32 The Rome II Regulation currently does not offer this to parties.
The connecting factors: place where the action is taken and common habitual residence
Place where the action is taken and actions against ships
It is widely accepted that the place where the industrial action is taken is the natural connecting factor for both jurisdiction and applicable law. In general, this place is identical to the place where – absent the industrial action – the employees involved in the action would have performed their work. It would also normally coincide with the place where trade unions organise the collective representation of the workforce. Hence, it fits both a more individual approach and a more collective approach of the phenomenon of industrial action and in most cases would lead to concurrence of the law applicable to the contractual relationships between the parties involved and the law applicable to the non-contractual obligations arising out of the industrial action. 33 Problems will arise, however, when the place where the action is taken cannot be established and/or when this place has an insufficient connection with the relationships involved.
One of the case configurations in which application of the place where the action is taken might be problematic, is the seamen's strike. 34 As a rule such strikes take place when the ship is docked in a port. 35 The choice of a specific port may depend on the support local affiliates of the International Transport Workers Federation (ITF) and/or unions of dockworkers are willing to provide. The flag of the ship is, as a rule, not a significant factor in deciding where to go on strike. The contracts of the seamen tend to have little to no connection to the flag state either, as these seamen are recruited in their home country by a manning agency that may be established anywhere. In the case of Filipino seamen, however, manning agencies need government permission for their recruitment activities and have to work through a local subsidiary. 36 Furthermore, the government prescribes the use of a Filipino model contract in these cases. The model contract contains a choice of law clause in favour of Filipino law and a referral to a local dispute resolution mechanism. Other sending states (e.g., Indonesia) tend to be less involved in the exact content of the employment relationship with sailors recruited in their territory.
Technically, the question may be raised as to whether a strike on board a ship is regarded as taking place in the flag state or in the port state where the action is taken. The judgment of the CJEU in the DFDS Torline Caledonia case (referred to in the introduction) suggests that a strike of the seamen themselves might actually be considered as taking place in the flag state. 37 Support actions, however, will decidedly take place in the port state. In the legislative procedure leading up to adoption of the Rome II Regulation, Greece and Cyprus objected against the insertion of Article 9 because they did not want the law of the port state to be applied to seamen's strikes, as this might lead to forum shopping. 38 A similar concern can be deduced from an old Dutch case in which Filipino seamen on a ship flying the flag of Saudi Arabia went on strike in the port of Rotterdam. The Dutch Supreme Court applied Filipino law to the question of whether the strike was legitimate, hence applying the law designated in the individual contracts as governing the employment relationship to the question of the legality of the industrial action as well. The restrictions imposed by that law where not deemed to be contrary to Dutch public policy due to the very tenuous links of the case with the Dutch legal order. 39 So, there is a fear of forum shopping in both (some) flag states and (some) port states. The other side of the coin is of course the effective protection of the seamen involved: the rules on applicable law should provide the trade unions (notably, the ITF and affiliates) with a real possibility of defending the interests of seamen in a coordinated manner.
In practice, seamen's strikes depend, for their effectiveness, on support from unions and/or ITF affiliates in the port state. It is crucial that the legality of these support actions should not be subject to the often quite restrictive laws of the home state of the seamen. The support given by organisations in the port state might take the form of boycotts and support actions. 40 Boycotts may take the form of a call not to enter into a contract of employment with the blacklisted employer. Such a boycott is hard to localise as there is no duty to enter into a contract to begin with. 41 The effective part of the support action is not this primary boycott, but rather the secondary boycott in which dockworkers refuse to service the blacklisted ship. This secondary boycott takes place in the port state. However, some national laws make the legality of the secondary action dependent on the legality of the primary action. This is problematic when a primary action is taken by the seamen themselves. In general, I have recommended treating preliminary questions regarding the legality of an industrial action as an independent matter for choice of law purposes, as only such independent treatment can offer legal certainty to the parties involved in the action. In the case of boycotts, however, legal certainty seems to require that a secondary action taken in support of a seamen's strike be judged entirely under the law of the place where the secondary action is taken. This is all the more relevant as the Rome II Regulation has universal application. It is not restricted to cases in which a law of an EU Member State applies to the case. Its rules could therefore lead to the application of a law that shows little or no respect to workers’ rights. 42
Common habitual residence
Article 9 of the Rome II Regulation refers back to its Article 4(2), which stipulates that ‘where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.’ Neither the provision itself nor the travaux préperatoires 43 give any guidelines as to the application of this provision in the cases where there might be multiple parties causing the damage and/or more than one victim, each with their own habitual place of residence. There is no case law yet on the question of how the subrule on common residence should be applied in that scenario. A similar provision in Dutch law 44 was interpreted in such a way that every offender-victim combination must be considered separately as regards the special subrule on common residence. 45 This may (or may not) be acceptable in the case of traffic accidents or pub fights in holiday resorts, but applying this rule to industrial action would have highly undesirable consequences. It would, for example, imply that the conflict between Laval and the Swedish unions in the well-known Laval case (in which the Swedish trade unions organised a blockade of the construction site of a Latvian employer posting workers to Sweden) 46 would be subject to the main rule (the place where the action is taken), making Swedish law applicable to the relationship. If a Latvian union had also been involved in the action, however, the dispute between the employer and the Latvian union would have been governed by the law of the country of the common place of residence, namely, Latvian law. The application of the rule of common residence in the relationship between the employer and individual workers would depend on the residence of each of the workers concerned. This splitting up of the industrial action into individual relationships covered by different laws runs counter to the purpose of Article 9 and denies the collective character of industrial action. Hence, we have to assume that the reference to Article 4(2) in Article 9 cannot be interpreted in this way. But if the exception of the common habitual residence can only be applied if all parties involved (including all workers participating in the action) have a common habitual residence, it will most likely not work in practice.
What is the problem the reference to Article 4(2) is meant to solve? It would seem that the reference to the common habitual residence is meant to cover those situations in which the place where the action is taken has little or no connection to the parties to the conflict and the pre-existing relations between them. Such instances of a relatively disinterested locus actus may arise in seamen's strikes (but only if these do not involve any local parties), or in the case of the posting of workers (but only where action is taken to improve the long-term labour conditions of the workers rather than the conditions during the posting). 47 But in such cases, the factor pointing to a more closely connected law seems to be the habitual place of work and/or the law applicable to the contracts of employment rather than the habitual residence of the parties to the conflict. In seamen's strikes, in particular, the law applicable to the contracts of employment seems to be resorted to in practice as an alternative to the place where the action is taken. Article 9 does not directly permit this, but sometimes the incidental question issue can be used to achieve the same result.
It would seem that the connecting factor based on common habitual residence does not perform a meaningful function in the context of industrial action. On the contrary, it can cause uncertainty and confusion as regards its application. If the description above regarding to purpose of the reference to Article 4(2) is correct, it would be advisable to amend Article 9 in such a way that the exception to the application of the law of the place where the action is taken is clearly circumscribed. For posted workers this might mean that a distinction is made between actions aimed at improving the long-term conditions of their employment (to be subject to the law of the habitual place of work) and actions aimed at improving the conditions of posting and/or integrating their activities in the host state into the local system of industrial relations (to be subject to the law of the host state). For seamen, the situation is even more complex. In practice, courts seem to rely on the law applicable to the pre-existing collective agreements the industrial action seeks to replace and/or the law applicable to the individual labour contracts of the crew concerned.
Corrections to the lex causae
The law applicable to the non-contractual obligation, as identified by Article 9, juncto Article 4(2) and Article 14) (lex causae), could be any law – the application of Rome II is not restricted to intra-EU cases. Although the system of conflict of laws is based on the assumption that private law rules are to a large extent exchangeable (in that each of them strives for justice between the parties), there is no guarantee that the applicable law will respect the fundamental principles of the law of the court hearing the case. Moreover, the conflict of law rules are designed to identify the law most closely connected to the individual parties to the dispute. They may be less well equipped to take public interests into account and deal with public law regulations. Therefore, the system of Rome II contains some corrective mechanisms that apply to the multilateral choice of law rules that determine the lex causae.
An important corrective mechanism in industrial action cases is the public policy exception. This exception may be invoked by the court hearing a case if the application of a provision of the foreign applicable law is manifestly incompatible with the public policy (ordre public) of the forum (see Article 26 Rome II). It is generally accepted that fundamental rights are part of the public policy of the forum. So, this provision may provide a safeguard in cases where the provisions of the applicable law fall well below the standards acceptable in the EU. However, a court will only protect its own public policy. And even then, the level of scrutiny may depend on the closeness of the link between the industrial action and the legal system of the court hearing the case. The Dutch Saudi Independence judgment is a case in point –serious restrictions to the right to strike were accepted as the case was deemed to be too removed from the Dutch legal order, even though the strike took place in a Dutch port. 48 Likewise, the literature refers to old French cases in which foreign laws prohibiting all industrial action were upheld, despite public policy objections being raised by the workers involved. 49
The public policy exception as described here (and codified in Article 26) has a negative function only – it blocks the application of certain provisions of the otherwise applicable law. Sometimes, however, rules that protect an important public interest claim mandatory application, regardless of the law applicable to the legal relationship. In the past this was referred to as the positive function of public policy, but it is now largely known as the exception of ‘overriding mandatory provisions’. This exception is laid down in Article 16 Rome II which stipulates: ‘Nothing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.’
The concept of overriding mandatory provisions refers to provisions the respect for which is regarded as crucial by a State for safeguarding its public interests, such as its political, social, or economic organisation. Even though the Member States enjoy discretion as to which rules they consider to be crucial for safeguarding the public interest, the concept should be interpreted restrictively. As a rule, it should not be used to grant overriding status to rules that deal with the matters that are explicitly mentioned as being covered by the lex causae in Article 15. For that reason, the CJEU was very critical of a Portuguese rule that would apply the Portuguese limitation period (as an overriding mandatory provision) to a claim relating to a traffic accident that occurred in Spain and was covered by Spanish law. 50 It is difficult to predict how the CJEU would react to rules on industrial action in this context. In contractual matters, employment contracts enjoy a special position, as in the case of posting large parts of the legal framework of the host state are applicable even when home state law applies under the choice of law rule. This deviation is regulated in the Posting of Workers Directive. A similar legal base is lacking as regards industrial action, but the national rules on industrial action are widely deemed to be of a public order nature. 51
Even when we assume that rules on industrial action can apply as overriding mandatory provisions, and through that mechanism can be given a territorial application, the protection offered to the unions and workers concerned is relative: Article 16 – like the public policy provision – is restricted to the application of rules of the forum, providing a further incentive for forum shopping.
There is only one relevant corrective mechanism that is not unilateral in character. Article 17 states: ‘In assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability.’ Though once again the exact meaning of this provision has not yet been teased out in case law, the provision would most likely cover external manifestations of industrial action, such as picketing and strikes. A more extensive reading would even include the standard of behaviour (and hence the lawfulness thereof) in the rules that pertain to safety and conduct of the place where the action is taken. 52 An important difference with Article 16 is that these rules of safety and conduct do not apply as law, but rather ‘should be taken into account as a matter of fact’, and only then, ‘in so far as appropriate’. This offers flexibility to the judge hearing the case, with concomitant legal uncertainty for the parties.
Determining the applicable law: main findings
The multilateral choice of law rule refers to the place where the action is taken, but also contains a reference to the common habitual residence of the parties. The place where the action is taken will be relatively easy to ascertain in most cases but may prove problematic in the case of boycotts and seamen's strikes. The common habitual residence rule is unfit to deal with collective phenomena and should be amended if it is to be of any use in industrial action cases.
The exact scope of application of Article 9 is not clear. As such, the legality of the action in particular may be subject to another choice of law rule. Several authors advocate for strict adherence to the law of the place of the action in this respect.
Also, the corrective mechanisms that apply to the multilateral rule which are provided for in Articles 16, 17 and 26 largely serve to strengthen the position of the law of the place where the action is taken. An interesting example is Article 17, which allows courts to take into account the rules of safety and conduct of the place where the action is taken when assessing the conduct of the person claimed to be liable. This rule would include external manifestation of the action, such as picketing, and could serve as an implementation of recital 28 in as much as this paragraph refers to ‘the conditions relating to the exercise of such action in accordance with national law.’
Part II: jurisdiction
The rules on jurisdiction in Brussels I bis are not written with industrial action in mind. Like the rules on the applicable law, they are vested in a distinctly private law tradition which a strong focus on individual relationships. Jurisdiction will depend first and foremost on the domicile of the defendant and the nature of the claim entered by the plaintiff. If the question of the legality of an industrial action is an incidental one in an otherwise contractual dispute, jurisdiction will be determined on the basis of the rule for contracts. If the claim is based in tort, other grounds of jurisdiction may come into play. Hence, there is no guarantee that the court that decides on the legality of an industrial action will be the court of the place where the action is taken. This is true even in cases in which the legality of an industrial action is the main question that is put before the court.
Scope of application of Brussels I bis
The question of which court or courts can have jurisdiction in cases which touch on collective labour law is determined by different instruments, including the Brussels I bis Regulation and national law. The scope of application of Brussels I bis is restricted, largely, to cases involving defendants who are domiciled in a Member State. For claims based on individual contracts of employment, however, the scope is extended to include situations in which the employee is habitually working in the EU and wants to sue his employer in the place of work. 53 This territorial scope limits the relevance of the Brussels I bis Regulation in cases involving seamen – cases which often involve non-EU parties.
The scope of application of the Brussels I bis Regulation is restricted to civil and commercial matters – as is the scope of Rome II. 54 In the DFDS Torline Caledonia case, the CJEU applied the rules of the Brussels I Regulation/Convention to a procedure concerning the legality of a boycott action taken by Swedish trade unions, without paying any attention to Article 1. We can deduct from this case that the civil and commercial character of industrial action was not questioned. However, in the British Airways case against the Spanish unions of airline pilots, the High Court declined jurisdiction on the basis that industrial action, as a constitutional issue, fell outside the scope of application of the Brussels I Regulation. This case has been convincingly criticised by U. Grušić and does not constitute the communis opinio in the field. 55
Classification within the system of Brussels I bis
As the Regulation does not contain a special rule on industrial action, the normal rules of the Regulation will apply. And at this point the different ways in which the legality of an industrial action can be put before the courts, come into play again. The starting point for issues of jurisdiction is the claim and the identities of the parties involved in the case. Accordingly, a claim of an employee for payment of wages owed would sound in contract – and, more particularly, be a claim based on the individual contract of employment. This is true even if the soundness of the claim depends on the validity of a collective agreement entered into by the employer as a result of an industrial action. A claim of an employer against a trade union concerning a boycott action organised by the latter, will (as a rule) sound in tort.
The relevant rules
With regard to claims based on the individual contract of employment, the Regulation contains special rules aimed at the protection the employee in Section 5. The employee can only be sued in the place where he is domiciled and the validity of a choice of court agreement is limited to specific situations. 56 However, the employee can sue his employer either in the place where the latter is domiciled, or in the habitual place of work. If the place of work cannot be determined, the employee may sue the employer in the place where the establishment that hired the employer is or was situated. Moreover, the employee may also sue the employer in a branch or establishment of the employer if the contract of employment is linked to the operations of that branch or establishment. Lastly, in case the employee sues more than one party on related claims, he can do so in the place where one of them is domiciled (Article 8(1)). In the context of the posting of workers in the EEA, an additional ground of jurisdiction may be found in the country to which the worker is posted, but only as regards claims based on the special protection offered by the Directive on the posting of workers.
Proceedings between employers and the organisation representing the workers do not fall within the scope of application of Section 5. In that case that general jurisdiction is vested in the courts of the state of domicile of the defendant (Article 4). Special jurisdiction may be vested in the court for the place where the harmful event occurred or may occur in matters relating to a tort (Article 7(2)), and in the place of performance of the obligation in question in matters based on contract (Article 7(1)). In disputes arising out of the operations of a branch, agency or other establishment, the courts for the place where the branch, agency or other establishment is situated can also have jurisdiction (Article 7(5)). Where there is more than one defendant, claims against both defendants can be entered in the courts for the place where one of them is domiciled, providing there is a close enough link between the two claims (Article 8(1)).
Problems and solutions
How these grounds of jurisdiction work out in practice can be demonstrated by two well-known cases: the Danish DFDS Torline Caledonia case and the English British Airways case.
The DFDS Torline Caledonia case concerned a boycott of the Danish vessel Torline Caledonia organised by a Swedish trade union, and effected in a Swedish port. DFDS sued the Swedish trade union SEKO and sought to establish jurisdiction in the Danish courts based on the place of the tort. 57 Jurisdiction on the basis of the place of the tort can either be in the place where the act occurred or the place where the damage occurred, as chosen by the claimant. In this case, the harmful act was deemed to have occurred in Sweden, but the Danish court was unsure as to where to determine the damage had occurred. The CJEU decided that the damage could only be considered to have occurred in Denmark if the national court concluded that the actual damage was done on board the vessel. Following the referral, the Danish courts did indeed accept jurisdiction and found in favour of the plaintiff. The case not only provided the incentive for including a special rule on industrial action in the Rome II Regulation to avoid the application of the rule on the place where harm occurred, but it also triggered a request by the European Parliament to reconsider the rules on jurisdiction for these types of cases. 58
The British Airways case concerned an industrial action in Spain, organised by the local Spanish union in collaboration with the international pilots’ union, IFALPA. The latter was deemed to be domiciled in England at the start of the proceedings, creating jurisdiction on the basis of Article 4. 59 The English courts could also have had jurisdiction in the case against the Spanish union based on Article 8(1), if they had not declined to take the case for other reasons. This route of creating jurisdiction for English courts over industrial actions taking place elsewhere, based on the involvement of an international trade union association domiciled in the UK, also underlies the (in)famous Viking case against the international transport workers federation, ITF, likewise domiciled in the UK, for participating in a coordinated action against a Finnish shipowner in relation to a ferry service between Finland and Estonia. 60 After the British Airways case, IFALPA moved its headquarters to Canada. The ITF is still established in the UK (which is, however, no longer part of the EU).
According to the current interpretation of Article 8(1), any of the defendants can be used as an anchor for creating jurisdiction over the others; it is not required that the anchor is actually the main actor in the underlying conflict. 61 In labour disputes in international transport, Article 8(1) plays a distinctly disruptive role (more so than the interpretation of Article 7(2)). 62 For that reason, Laura Carballo Piñeiro advocates for an amendment to, or reinterpretation of, Article 8(1), restricting the use of the Article to providing ancillary jurisdiction over the international confederation in the place of domicile of the directly involved national union, and blocking the reverse scenario. 63 Article 11(1)(c) could serve as a model for such a clause.
As to the place of the tort, it is standard interpretation that in the case of non-contractual obligations, both the courts for the place where the harmful act occurred and the place where the direct damage occurred can have jurisdiction on the basis of Article 7(2). In complex torts involving several parties, the CJEU has stipulated that only acts imputable to the defendant create jurisdiction over that particular defendant. It could therefore be argued that the act imputed to the ITF in the DFDS Torline Caledonia case has a different locus to the act of the Swedish union, and both might have a different locus to the actual boycott of the ship by the dockworkers in Sweden would have. 64 It would be highly unfortunate for such differences to exist between the relevant loci actus as it would seriously reduce the predictability of the outcome in respect of the question of which court might end up passing judgment on the legality of the industrial action. When attachment to the place where the act occurs is propagated in industrial action cases, authors usually refer to the place where the industrial action is taken (or would be taken in the case of an announced but not effectuated action). This is based on an analysis that the primary act of workers in more typical forms of industrial action is non-performance (in whole or in part) of work.
However, it could also be argued that non-performance of work is (also) the primary damage – causing a drop in productivity on the side of the employer. 65 In most cases the drop in productivity occurs in the same place as the non-performance of work, but in the case of boycotts the two may diverge, as can be illustrated by the DFDS Torline Caledonia case. A boycott taking place in a Swedish port would (allegedly) make it impossible for DFDS to operate the boycotted Torline Caledonia vessel. Accordingly, the Danish court determined that the place where the damage occurred was on board the ship, and hence declared it had jurisdiction to hear the case. 66
The motion adopted by the European Parliament in 2013 calls upon the Commission to pay particular regard to the questions of ‘whether, concerning the liability of a worker or an employer or of an organisation representing the professional interests of workers or employers for damages caused by industrial action, any steps need to be taken to clarify that Article 7(2) of the recast Brussels I Regulation refers to the place where the industrial action is to be or has been taken, and whether alignment with Article 9 of the Rome II Regulation is necessary.’ Uncertainties as to the interpretation and application of Article 7(2) to industrial action indeed seem to warrant some guidance on this issue, potentially leading to a change to the text of Article 7(2) Brussels I bis. As mentioned before, industrial action is a labour law phenomenon with many public law and constitutional overtones. This makes it highly preferable that jurisdiction us granted to a court that can apply its own laws to the issue of the legality of the action and the consequences thereof. An adapted interpretation of Article 7(2) may, hopefully, lead to such concurrence of jurisdiction and applicable law.
But Article 7(2) offers alternative jurisdiction: claimants may still prefer to submit their claims in the domicile of (one of the) defendant(s), in accordance with Article 4(1). This can only be avoided if the courts of the place where the action is taken are granted exclusive jurisdiction – as is done for proceedings listed under Article 24. 67 The latter was indeed proposed by the Committee on Employment and Social Affairs in the 2013 procedure leading up to the recommendation cited above. The proposal of the committee on employment was not taken up in the final recommendation and, in my opinion, rightly so. Creating an exclusive basis for jurisdiction is a solution of last resort: there are good reasons for preferring the domicile of defendant as the basic ground for jurisdiction and for allowing the parties to a conflict some alternatives. Moreover, the rule of exclusive jurisdiction can only be fully effective if it also applies to cases in which the issue of the legality of the action only comes up as an incidental question. 68 That would mean exclusive jurisdiction would also rest with the court of the place where the action was taken when an employee seeks to enforce provisions of a collective agreement entered into as a result of an industrial action and the employer enters a defence of nullity of the agreement based on duress. Such broad interference with the normal rules of jurisdiction would seriously harm the position of individual workers relying on a collective agreement for their claim.
Overview of the main recommendations
Applicable law
In is still insufficiently clear which law applies to the various aspects of industrial action. Distinctions are made between (inter alia) the legality of the strike as such, the non-contractual obligations arising out of industrial action, the conditions for the exercise of the right to industrial action, claims by third parties and follow-up claims by the parties to the individual contracts of employment.
Under the Rome II Regulation most of these aspects will, most of the time, be regulated by the law of the place where the action is taken. It is advisable to take that as a starting point for rethinking the applicable law issue. Exceptions to this rule should be specific and circumscribed in order to offer workers and their representatives the legal certainty and predictability that is necessary for the effective enjoyment of the right to take industrial action.
The most relevant situations in which the application of the law of the place where the action is taken is challenged seem to be:
Industrial action taken while posted abroad. Here, the law applicable to the individual contracts of the workers involved in the action does not coincide with the law of the place where the action is taken. Industrial action undertaken by transport workers and, in particular, seamen. In this case also, the law applicable to the individual contracts may differ from that of the place of action, but in the case of a seamen's strike, even the determination of the place of the action is open for discussion.
In these cases, the major competitors for the place where the action is taken as the relevant connecting factor would be (1) the law applying to the industrial relations the action is meant to influence and/or (2) the law applying to the individual contracts of employment of the workers that would benefit from the result of the action. It would seem advisable to concentrate the discussion on finding workable solutions to these two scenarios. The current rule on common habitual residence is unfit to deal with these scenarios in a satisfactory way.
It is important to ensure that the law applicable to the question of the legality of the action does not depend on the context in which this question is raised. This could be achieved by specifying the law applicable to the legality of the action as such in the European instrument (or make clear this aspect is already covered by Article 9). A specific rule on the law applicable to the effects on the employment contract could also be developed (compare the French draft code on private international law). 69
Jurisdiction
The most problematic aspects of the Brussels I bis Regulation relate to Article 8(1) on multiple defendants and Article 7(2), especially where this provision grants jurisdiction in tort to the courts of the place where the damage is sustained.
Article 8(1) is used in practice to divert the jurisdiction over the legality of an industrial action away from the most interested forum, namely, the courts of the place where the action is taken. It would make sense to restrict the application of this provision in case of industrial action.
Likewise, the place of the tort referred to under Article 7(2) might need a special interpretation, focusing on the place where the industrial action is taken or announced to take place, while at the same time removing reference to the place where the harm occurs for jurisdiction purposes.
Both changes would ensure more parallelism between the rules on jurisdiction and the applicable law, without deviating too much from the basic principles underlying the Regulation.
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the European Commission DG employment (grant number ECE Contract, Lot 1 – Expert Meeting on private in).
