The contribution of the CJEU to the notion of habitual workplace in the field of international transport

Abstract

The notion of the place (or country) in or from which the employee habitually carries out his or her work in performance of the contract of employment plays an important role in determining the allocation of international jurisdiction and the law applicable to the employment contract in the case of international transport. The CJEU has interpreted the notion of ‘where, or from where, the employee habitually carries out his or her work’ very broadly, concomitantly reducing the scope of the ‘engaging place of business’ criterion. This article shows the evolution of CJEU case law and its contribution to the development of the notion of habitual workplace in the field of international transport.

I. Introduction

In the field of individual contracts of employment, the notion of the place (or country) in or from which the employee habitually carries out his work in performance of his contract of employment assumes considerable importance in determining both jurisdiction and the applicable law.

As regards the allocation of international jurisdiction, the Brussels Ia Regulation 1215/2012 ¹ provides that the employee may always sue an employer who is domiciled in a Member State in that Member State; ² in addition, the employee is given the option of suing the employer (even an employer domiciled in a third country) ³ in the place where or from where the employee habitually carries out his work ⁴ or, failing such a place, in the place where the place of business that engaged the employee is situated. ⁵ By contrast, the employee may only be sued in the Member State in which he is domiciled. ⁶ The possibility of derogating from these provisions by the insertion of a jurisdiction agreement is heavily restricted. ⁷

As regards the determination of the law applicable to the contract, which is governed by the Rome I Regulation, ⁸ the parties are free to choose the law applicable to the contract of employment ⁹ but this possibility is without prejudice to any greater protection that may be afforded to the employee by the non-derogable rules ¹⁰ of the law of the country in which or, failing that, from which, the employee habitually carries out his work in performance of the contract. ¹¹ Where there is no such country, the applicable law is that of the country in which the place of business that engaged the employee is situated, ¹² subject to the possibility of discarding either of these laws where the contract is more closely connected with another country. ¹³

The rationale behind the rules in the Rome I and Brussels Ia Regulations is to give the employee, as the weaker party, the protection of the forum and the law with which he can be expected to be familiar since he works or has worked there. ¹⁴ The ‘place of business’ criterion’ is thus subsidiary and, as we shall see, the CJEU has held that its focus is on the place of work rather than the place where the employer is established. ¹⁵

As we shall see, the CJEU has, in the context of both Regulations, interpreted the notion of ‘where, or from where, the employee habitually carries out his work’ very broadly, ¹⁶ concomitantly reducing the scope of the ‘engaging place of business’ criterion, thereby reducing the possibility for an employer to manipulate this criterion in its favour by arranging for an itinerant employee to be engaged through a place of business in a country which not only provides for a low level of employee protection but which also has little or no objective connection with the employment relationship.

II. The case law of the CJEU

A The case law prior to Koelzsch

The original version of the 1968 Brussels Convention on jurisdiction and enforcement of judgments in civil and commercial matters ¹⁷ contained no special provisions on the allocation of jurisdiction in disputes between employer and employee. Instead, jurisdiction was governed by the normal rules of the Convention, namely that the defendant was to be sued in the Contracting State of his domicile (Article 2 of the Convention), subject to the possible application of the forum contractus or a jurisdiction agreement. ¹⁸ The forum contractus rules simply allowed the defendant to be sued in the country in which the contractual obligation was to be performed. However, the Rome Convention, which was signed in 1980 but did not come into force until 1991, contained a provision, namely Article 6, the predecessor to Article 8 of the Rome I Regulation. That provision served to inspire the CJEU to engage in a remarkable piece of judicial legislation by adapting Article 5(1) of the Brussels Convention to the special case of individual employment contracts. In Ivenel v Schwab ¹⁹ it held that in such cases, the forum contractus would always be in the Member State in which the characteristic obligation of the contract, i.e., the work performed by the employee, was carried out. In reaching this conclusion, the CJEU specifically referred to Article 6 of the Rome Convention. In subsequent case law, the consequences of Ivenel v Schwab were worked out by the Court. Of particular interest is Mulox v Geels ²⁰ in which the CJEU, in order to localise the characteristic obligation of the employment contract, for the first time adopted the connecting factor in Article 6(2)(a) of the Rome Convention, namely the country in which the employee habitually carried out his work in performance of the contract. Not only that, but the Court went one step further by extending this connecting factor to embrace the country from which the employee principally discharged his obligation towards the employer.

This case law was incorporated into the 2001 Brussels I Regulation and subsequently the Brussels Ia Regulation. However, in the relevant provision of the Brussels I Regulation, only the place ‘where’ criterion featured; the ‘from where’ criterion was added in 2012. This is slightly strange since the ‘from where’ criterion had been promulgated in Mulox v Geels, well before the Brussels I Regulation was enacted.

B Koelzsch

In Koelzsch, cited above, the employee was a lorry driver who worked for a firm based in Luxembourg. He lived in Germany, where he picked up the lorry every working day, and in the course of a working day he delivered flowers to destinations primarily within Germany but also in neighbouring countries. The question arose as to the law applicable to the contract of employment, ²¹ with the employer arguing that the employee did not carry out his work in one country and thus the second connecting factor, namely the country of the establishment through which he had been engaged (Rome Convention, Article 6(2)(a)), applied. The employee, by contrast, contended that since he carried out his work from Germany, where he carried out the major part of his contractual obligations, German law should apply.

By this time, the legislature had enacted the Rome I Regulation, which contained the new, more extensive wording, but that Regulation was not applicable at the material time. Nevertheless, the Court transposed the reasoning that it had used in the Ivenel v Schwab and Mulox v Geels line of case law to hold that Article 6(2)(a) of the Rome Convention applies where the employee carries out his work in more than one country if the work has a significant connection with one country, and thus the criterion of the country in which the work is habitually carried out must be given a broad interpretation so as to embrace the country in or from which the employee carries out his activities of the majority thereof. ²² To that end, the national court should take account of the place from which the employee carries out his transport tasks, where he receives instructions, the place where the tools of the trade are situated, where the goods are unloaded and the place to which the employee returns after completion of the tasks. ²³ In the light of these factors it was clear that in reality the employee carried out his work in Germany. Although the result of the case rather anticipated the entry into force of the Rome I Regulation, it is scarcely a surprise, seen in the light of the previous case law and the ratio legis of Article 6 of the Rome Convention. Were the same facts to occur now, it is clear that the answer would be the same.

C Voogsgeerd

In Voogsgeerd, ²⁴ the CJEU continued it approach towards the notion of the country in or from which the work is habitually performed that it had adopted in Koelzsch and the earlier judgments on the Brussels Convention. In this case the employee was a sailor who lived in the Netherlands. Apparently, he worked for a Luxembourg company on a ship that flew the Luxembourg flag. However, he always boarded the ship in the port of Antwerp. The Belgian court assumed that he did not always perform his work in the same country and thus posed some questions on the ‘engaging place of business criterion’. However, the CJEU, after some prompting by the European Commission, hinted that it considered that the place of habitual work criterion was, by analogy with Mulox v Geels and Koelzsch, more likely to be applicable, subject to verification by the national court, and that it would lead to the application of Belgian law. The CJEU recalled in this respect that both the place where the employee received his instructions and where he reported for duty were relevant indicators. ²⁵

The Court also gave some useful guidance on the application of the ‘engaging place of business’ criterion, holding that this expression referred to the place of business through which the employee was engaged, as opposed to the place of business through which the performance of the contract was managed. ²⁶

In any event, the CJEU stated specifically that the country in or from which the employee habitually carried out his work constituted the main rule, to which the engaging place of business criterion was subsidiary. ²⁷

The CJEU, like the referring court, did not appear to attach any importance to the law of the flag as an indicator of the applicable law of the contract.

D Ryanair

Lastly, the Ryanair judgment, which concerns the rules on jurisdiction in the Brussels I Regulation (44/2001), continued along the same lines as its predecessors. The employees in question worked either for Ryanair, established in Ireland, or an associated company, and all were based in Charleroi in Belgium. The employees carried out a mixture of duties as both ground staff and airborne personnel and returned, at the end of every working day, to Charleroi. The employees argued that their Member State of habitual work was Belgium, whereas the defendants argued that since, from a temporal point of view, most of the work was performed on board the planes which were registered in Ireland, the place of habitual work should be treated as being Ireland.

Unsurprisingly, the CJEU gave short shrift to all of the defendants’ contentions. In addition to referring to the criteria that it had established in Koelzsch and Voogsgeerd, it expressly rejected the argument that the planes were to be treated as Irish territory, since there was no basis for such a contention in Article 17 of the Chicago Convention ²⁸ and, instead, it applied the reasoning that it had already employed in Koelzsch and Voogsgeerd. It was also aided by the existence of the notion of ‘home base’ in the relevant EU legislation which tended to coincide with the ‘place in which or from which the employee habitually carries out his work’. In that respect, the CJEU indicated that although the concept of home base was distinct from that of the ‘place where ²⁹ the employee habitually carries out his work’, the home base was nevertheless likely to play a significant role in the identification of the indicia determining that place. ³⁰

E Conclusion on the case law

As we can see, the CJEU has stretched the notion of the country in which the employee habitually carries out his work very considerably, thereby concomitantly reducing the scope of the place of engagement criterion. Nevertheless, while this approach takes some liberties with the wording of Article 8 of the Rome I Regulation and Article 19 of the Brussels Ia Regulation (and even more so with the predecessor provisions), it is nevertheless entirely in conformity with the ratio legis of those provisions, which is to facilitate access to the courts that are closest to the place where the employee works and to ensure the benefit of the protective provisions of the law with which he is assumed to be most familiar, and on which he can most easily acquire information from a local lawyer or union representative. This criterion can thus be applied in most cases, even of workers in the various transport sectors, except perhaps in extreme cases, ³¹ such as where an employee does not have an effective centre of professional activity and spends roughly equal amounts of time in each location of his work, or where the employee habitually works on the high seas ³² and does not consistently board the ship in the same country. ³³

III. Postscriptum: relevance of law of flag State in cases of seafarers’ employment contracts

As we saw in the Ryanair judgment, above, work on an aircraft is not to be equated with work in the State in which aircraft is registered and still less is work in a lorry or other vehicle to be assimilated with work in the country in which the vehicle is registered. Indeed, no-one has had the hardihood to even argue the point. However, a priori, there may be a stronger claim for a ship to be assimilated to the territory of its flag State. This was traditionally the view in Germany. It was advocated by the late Professor Mankowski ³⁴ and still finds some echoes in German literature. ³⁵ Nevertheless, it appears to have been disavowed as an independent connecting factor by the CJEU in Voogsgeerd. However, as we saw in that case, the factor that enabled Belgium, rather than Luxembourg as the flag State, to be treated as the country from which the employee habitually worked was that he always boarded the ship in Antwerp. And, as we saw in Booth v Phillips, this line of reasoning does not work where the place of boarding is not inconsistent or quite coincidental. In such cases the flag State may constitute a connection with the employment contract that is stronger than the presumptive default rule of the law of the country of the place of the engagement which, as we have seen, is better to avoid since it is entirely under the control of the employer.

In this respect a judgment of the German Bundesarbeitsgericht (BAG) is instructive. ³⁶ In that case, the applicant, a German seafarer, was employed on a number of cruise ships. The employer was an Italian company and the ships all flew the Italian flag. It would appear that the applicant did not always board the ships in the same country, albeit the precise details were a little sketchy. The lower courts held that there was no country in which the work was habitually carried out. Thus, according to the methodology of Article 6 of the Rome Convention, the law would be that of the establishment through which the applicant was recruited. Nevertheless, they applied the proviso to conclude that the contract had a closer connection with Italy, and thus Italian law applied. This conclusion was upheld by the BAG (although the judgment was quashed on other grounds). The BAG, despite considering that the place of work was traditionally considered to be in the country in which the ship was registered, at least where there was an objective connection with that country, nevertheless accepted the authority of Voogsgeerd to the contrary. However, it upheld the finding of the lower courts that Italian law applied. Amongst the objective indicia was the fact that the applicant paid income tax in Italy and was subject to the Italian social security regime, since the employer was registered in Italy and the ships flew the Italian flag. Thus, although the place of work of the employee was not assimilated to the State of the flag, the flag which the ships flew later reappeared as one of the objective circumstances that displaced the subsidiary place of the recruiting establishment connecting factor. The reasoning of the German courts in this case seems perfectly legitimate and illustrates that the law of the flag may still play a residual role in determining the law applicable to the contract of employment under Article 8(4) of the Rome I Regulation.