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SHOULD THE CONNECTING FACTOR OF THE ‘ENGAGING PLACE OF BUSINESS’ BE ABOLISHED IN EUROPEAN PRIVATE INTERNATIONAL LAW?

  • Uglješa Grušić (a1)
Abstract

In Case C–384/10 Jan Voogsgeerd v Navimer SA the ECJ dealt with a number of issues concerning the choice-of-law rules for employment contracts of the Rome Convention, most importantly the relationship between the connecting factors of the habitual place of work and the engaging place of business, and the interpretation of the latter connecting factor. After demonstrating that the ECJ has deprived it of almost any effect, that it leads to excessive legal uncertainty, unforeseeability of the outcome of litigation, and does not support the objectives of employee protection and proximity, this article concludes that the connecting factor of the engaging place of business should be abolished in European private international law.

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1 Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed in Brussels on 27 September 1968 [1998] OJ L27/1 (Brussels Convention); Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1 (Brussels I Regulation). Also relevant are the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters done at Lugano on 30 October 2007 [2009] OJ L/147/1 and its predecessor, the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters done at Lugano on 16 September 1988 [1988] OJ L319/9. For a discussion of the cases concerning the rules of jurisdiction in employment matters of these instruments see Grušić, U, ‘Jurisdiction in Employment Matters under Brussels I: A Reassessment’ (2012) 61 ICLQ 91.

2 [1998] OJ C27/47. The Convention on the law applicable to contractual obligations opened for signature in Rome on 19 June 1980 (Rome Convention) is published in [1998] OJ C27/34.

3 Case C–29/10 Heiko Koelzsch v Etat du Grand-Duché de Luxembourg, 15 March 2011, not yet reported in ECR (Koelzsch); Case C–384/10 Jan Voogsgeerd v Navimer SA, 15 December 2011, not yet reported in ECR (Voogsgeerd); compare Case C–133/08 Intercontainer Interfrigo SC (ICF) v Balkenende Oosthuizen BV and MIC Operations BV [2009] ECR I–9687.

4 Regulation (EC) 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations [2008] OJ L177/6 (Rome I Regulation).

5 Rome I Regulation, arts 28 and 29(2).

6 Brussels I Regulation, recitals 2 and 13; Rome I Regulation, recitals 6 and 23.

7 Brussels I Regulation, Section 5 of Chapter II (arts 18–21); Brussels Convention, arts 5(1) and 17(5).

8 Rome I Regulation, art 8; Rome Convention, art 6.

9 Brussels I Regulation, art 19; similarly, Brussels Convention, art 5(1).

10 Rome I Regulation, art 8(2) and (3); similarly, Rome Convention, art 6(2). Both the Rome I Regulation and the Rome Convention also mention that the country where the work is habitually carried out shall not be deemed to have changed if the employee is temporarily employed elsewhere.

11 Rome I Regulation, art 8(4); similarly, Rome Convention, art 6(2).

12 n 3.

13 The questions referred can be found in the ECJ judgment, para 21.

14 AG Opinion, paras 44–51.

15 ibid para 88.

16 ibid paras 52–63.

17 n 3.

18 Case C–125/92 Mulox IBC Ltd v Hendrick Geels [1993] ECR I–4075 (Mulox); Case C–383/95 Petrus Wilhelmus Rutten v Cross Medical Ltd [1997] ECR I–57 (Rutten); Case C–37/00 Herbert Weber v Universal Ogden Services Ltd [2002] ECR I–2013 (Weber).

19 AG Opinion, para 55 (emphasis added), referring to Koelzsch, paras 44–45.

20 ibid paras 56–63, in particular para 60.

21 ibid paras 64–75.

22 ibid para 65.

23 ibid para 70.

24 ibid para 72.

25 ibid para 71.

26 ibid para 73–74.

27 ibid paras 76–85, in particular para 83.

28 ibid paras 78–79.

29 ibid para 80.

30 ibid para 81.

31 ibid para 85.

32 ibid para 80.

33 ibid para 81.

34 ibid paras 86–91.

35 The Court arguably also addressed the concept of ‘employer’ for the purposes of Article 6 of the Rome Convention: ECJ judgment, paras 59–65. Although the Court had not been asked by the referring court to clarify this concept, it nevertheless stated, in para 62, that ‘it is a matter for the referring court to assess what is the real relationship between the two companies in order to establish whether Naviglobe is, indeed, the employer of the personnel engaged by Navimer’ and also noted several factors that the referring court should take into consideration for this purpose (the fact that the two companies had the same person as director and the fact that no transfer of employer authority from Navimer to Naviglove had taken place).

36 ibid paras 31–41. The Court referred to Koelzsch (n 3).

37 ibid para 33.

38 ibid para 36.

39 ibid para 37; also para 41.

40 ibid paras 31, 39–41, 44.

41 ibid paras 39, 44. In para 40, however, the Court used permissive language when it stated that ‘when [the place of actual employment, the place where the employee received instructions or to where he must report before discharging his tasks] are located in the same country, the court seized may take the view that the situation falls within the scope of Article 6(2)(a) of the Rome Convention’.

42 ibid paras 43–52.

43 ibid para 49.

44 ibid para 50.

45 ibid paras 53–58.

46 ibid para 54.

47 ibid para 55.

48 ibid para 57.

49 ibid para 55–56.

50 n 18.

51 n 18.

52 Mulox, para 24.

53 Rutten, para 50.

54 n 18.

55 ibid para 50.

56 n 3.

57 ibid paras 44–45; Voogsgeerd, paras 36–37, 41.

58 Voogsgeerd, para 39 (emphasis added); similarly, para 44; but see para 40 where the Court used permissive language (‘may’).

59 [1980] OJ C282/1, 27.

60 Bogdan, M, Concise Introduction to EU Private International Law (Europa Law Publishing 2006) 132, fn 47; Junker, A, ‘Arbeitsverträge’ in Ferrari, F and Leible, S (eds), Ein neues Internationales Vertragsrecht für Europa: Der Vorschlag für eine Rom I-Verordnung (Sellier European Publishers 2007) 124125; Magnus, U, ‘Die Rom I-Verordnung’ [2010] IPRax 41; Mankowski, P, ‘Employment Contracts under Article 8 of the Rome I Regulation’ in Ferrari, F and Leible, S (eds), Rome I Regulation: The Law Applicable to Contractual Obligations in Europe (Sellier European Publishers 2009) 199200; Polak, M, ‘Laborum dulce lenimen”? Jurisdiction and Choice of Law Aspects of Employment Contracts’ in Meeusen, J, Pertegás, M and Straetmans, G (eds), Enforcement of International Contracts in the European Union – Convergence and Divergence between Brussels I and Rome I (Intersentia 2004) 323, para 12–19; Zanobetti, A, ‘Employment Contracts and the Rome Convention: The Koelzsch Ruling of the European Court of Justice’ (2011) 3 Cuadernos de Derecho Transnacional 351353; Max Planck Institute, ‘Comments on the European Commission's Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Contractual Obligations (“Rome I”)’ (2007) 71 RabelZ 294297.

61 Beaumont, PR and McEleavy, PE, Anton's Private International Law (3rd edn, Green 2011) para 10.366; Sir Collins, L (gen ed), Dicey, Morris and Collins on the Conflict of Laws (14th edn, Sweet & Maxwell 2006) para 33–077; Hill, J and Chong, A, International Commercial Disputes: Commercial Conflict of Laws in English Courts (4th edn, Hart 2010) para 14.5.34; F Jault-Seseke, ‘L'adoption du règlement 593/2008 (Rome I) sur la loi applicable aux obligations contractuelles: le choix de la continuité pour le contrat de travail’ [2008] Revue de droit du travail 624; Kaye, P, The New Private International Law of Contracts of the European Community (Dartmouth 1993) 235; Lagarde, P, ‘Le nouveau droit international privé des contrats après l'entrée en vigueur de la Convention de Rome du 19 juin 1980’ (1991) 80 Revue critique de droit international privé 319; Merrett, L, Employment Contracts in Private International Law (OUP 2011) para 6.61; Morse, CGJ, ‘Consumer Contracts, Employment Contracts and the Rome Convention’ (1992) 41 ICLQ 1819; Plender, R and Wilderspin, M, The European Private International Law of Obligations (3rd edn, Sweet & Maxwell 2009) para 11-042; also tentatively in favour of the engaging place of business: European Commission, ‘Green Paper on the conversion of the Rome Convention of 1980 on the law applicable to contractual obligations into a Community instrument and its modernisation’ COM (2002) 654 final, 37. Compare Francq, S, ‘Le règlement “Rome I” sur la loi applicable aux obligations contractuelles’ (2009) 136 Journal du droit international 65–6 (in favour of the connecting factor of the fixed base).

62 See Diggins v Condor [2009] EWCA Civ 1133.

63 See European Commission, ‘Proposal for a Regulation of the European Parliament and the Council on the law applicable to contractual obligations (Rome I)’ COM(2005) 650 final, 7.

64 Weber (n 18) para 54; Rome I Regulation, recital 36.

65 [1976] ICR 396 (EAT).

66 These cases are not merely fictional: see the decision of the German Bundesfinanzhof, 14 June 1991, (1991) 37 Recht der Internationalen Wirtschaft 966, concerning the taxation of wages of a cartographer working in Antarctica.

67 Art 6(2)(b) of the proposal for the Rome I Regulation expressly stated that this provision covered cases in which the employee ‘habitually carries out his work in or from a territory subject to no national sovereignty’: European Commission (n 63).

68 Voogsgeerd, AG Opinion, paras 27, 30.

69 ibid para 31.

70 Mankowski (n 60) 193–6. Also Däubler, W., ‘Das Neue Internationale Arbeitsrecht’ (1987) 33 Recht der internationalen Wirtschaft 251; Zanobetti (n 60) 350; also tentatively van Eeckhoutte, W, ‘The Rome Convention on the Law Applicable to Contractual Obligations and Labour Law’ (2006) 58 Bulletin of Comparative Labour Relations 171.

71 Mankowski, ibid 195.

72 ibid.

73 Booth v Phillips [2004] EWHC 1437 (Comm), para 25; Chunilal v Merrill Lynch International Inc [2010] EWHC 1467 (Comm), para 20; Cour d'appel de Lyon, 18 February 2004, No 2003/00993, unreported: available at <http://www.legifrance.com > ; Landesarbeitsgericht Niedersachsen, 20 November 1998, AR-Blattei ES 920 No. 6; Hessisches Landesarbeitsgericht, 16 November 1999, NZA-RR 2000, 401; Hessisches Landesarbeitsgericht, 25 August 2008, IPRspr 2008 No 47; Garcimartin Alférez, FJ, ‘The Rome I Regulation: Much Ado About Nothing?’ (2008) 8(2) The European Legal Forum I-61, para 73; Krebber, S, ‘Conflict of Laws in Employment in Europe’ (2000) 21 Comparative Labour Law and Policy Journal 525–6; Merrett (n 61) paras 4.85, 4.87; Moreno, GP, ‘Multinational Group of Companies and Individual Employment Contracts in Spanish and European Private International Law’ (2002) 4 YPIL 322–3; Plender and Wilderspin (n 61) para 11-053.

74 Voogsgerd, ECJ judgment, para 46; ibid, AG Opinion, para 65.

75 ibid, ECJ judgment, para 49 (‘It is only if factors concerning the engagement procedure lead to the conclusion that the undertaking which concluded the contract, in reality acted in the name of and on behalf of another undertaking …’); ibid, AG Opinion, para 70 (‘the English-language version of Article 6(2)(b) … of the [Rome Convention] … opens up the possibility that engagement may refer to a situation where the place of business acts merely as an intermediary between the company and the employee’); similarly, ibid para 79; ibid para 92 (‘The country in which the place of business through which the employer was engaged is situated means the country in which is situated the employer's place of business which concluded the employment contract with the employee’); compare ibid, AG Opinion, para 69 (‘a schematic interpretation of Article 6(2)(b) of the [Rome] Convention is … more likely to support the conclusion that it refers to the place where the contract was concluded’); ibid para 71 (‘use of the place of engagement as the point of reference cannot completely eliminate the risk of abuse, particularly since it is perfectly conceivable that an employer may be inclined to choose as the place for the conclusion of the employment contract a State whose employment law provisions ensure only a low level of protection for the employee’; ‘in extreme cases, there should be a requirement … that the employee is also actually employed at the place in question and that that place is not merely the place where the contract was concluded’); ibid para 73 (‘it may be inappropriate to take account exclusively of the place where the contract was concluded when applying Article 6(2)(b)’) (emphases added).

76 ibid, AG Opinion, para 70. Other examples of active involvement were given in ibid para 72. See also ibid, ECJ judgment, para 50.

77 ibid, ECJ judgment, para 49.

78 ibid, AG Opinion, para 71.

79 [1990] OJ C189/36, 45, fn 1 (in interpreting the meaning of the term ‘place of business’ contained in the relevant rule of jurisdiction in employment matters of the Brussels Convention, the rapporteurs referred to two ECJ judgments interpreting the concept of the ancillary establishment under art 5(5) of that Convention, namely Case 33/78 Somafer SA v Saar-Ferngas AG [1978] ECR 2183 and Case 218/86 SAR Schotte GmbH v Parfums Rothschild SARL [1987] ECR 4905). See also A Layton and H Mercer (eds), European Civil Practice (Sweet & Maxwell 2004) para 18.023, fn 50.

80 Mankowski (n 60) 196–7.

81 ibid 197.

82 See Dicey, Morris and Collins on the Conflict of Laws (n 61) para 33-077; Kaye (n 61) 235–6; Lagarde (n 61) 318–19; Morse (n 61) 19; Merrett (n 61) 121–2 and 128. See also the Jenard/Möller Report accompanying the 1988 Lugano Convention [1990] OJ C189/7, para 43.

83 Voogsgeerd, AG Opinion, para 83.

84 ibid paras 78–79.

85 ibid para 80.

86 ibid para 81.

87 ibid para 85.

88 ibid, ECJ judgment, para 54.

89 ibid para 55.

90 ibid para 57.

91 See Case 14–76 A. De Bloos, SPRL v Société en commandite par actions Bouyer [1976] ECR 1497; Somafer SA v Saar-Ferngas AG (n 79); Case 139/80 Blanckaert & Willems PVBA v Luise Trost [1981] ECR 819; SAR Schotte GmbH v Parfums Rothschild SARL (n 79); Case C–439/93 Lloyd's Register of Shipping v Société Campenon Bernard [1995] ECR I–961.

92 [1971] 1 WLR 1176 (CA). Here, the plaintiff was engaged by a Dutch subsidiary of a Texan company to work on an oil rig in Nigerian territorial waters. The contract had been negotiated in England with a representative of the Dutch company at the office of an English subsidiary of the Texan company. At this office the Dutch company had an English representative who did not participate in the negotiation of the contract.

93 Voogsgeerd, ECJ judgment, paras 55–56.

94 ibid, AG Opinion, para 81 (emphasis added).

95 Cour de cassation, chambre sociale, 29 April 2003, No 01-43416, unreported: available at <http://www.legifrance.com > .

96 ibid, ECJ judgment, para 50.

97 A Junker, ‘Gewöhnlicher Arbeitsort im Internationalen Privatrecht’ in Festschrift für Andreas Heldrich zum 70. Geburtstag (Beck 2005) 731.

98 Mota, CE and Moreno, GPJurisdiction over Individual Contracts of Employment’ in Magnus, U and Mankowski, P (eds), Brussels I Regulation (Sellier 2007) 339. See also Dicey, Morris and Collins on the Conflict of Laws (n 61) para 33-077, fn 52.

99 Voogsgeerd, ECJ judgment, para 57.

100 See A De Bloos, SPRL v Société en commandite par actions Bouyer (n 91) para 23.

101 Brussels I Regulation, art 19(2)(b); also Brussels Convention, art 5(1).

102 See Rome I Regulation, art 8(3); see also Rome Convention, art 6(2)(b).

103 Grušić (n 1).

104 ibid 97–101. See also von Mehren, AT, ‘Theory and Practice of Adjudicatory Authority in Private International Law: A Comparative Study of the Doctrine, Policies and Practices of Common- and Civil-Law Systems’ (2002) 295 Recueil des Cours 194203.

105 Brussels I Regulation, art 5(1)(b).

106 Case C–204/08 Rehder v Air Baltic Corporation [2009] ECR I–6073; Case C–19/09 Wood Floor Solutions Andreas Domberger GmbH v Silva Trade SA [2010] ECR I–2121. See also Case C–386/05 Color Drack GmbH v Lexx International Vertriebs GmbH [2007] ECR I–3699.

107 Brussels I Regulation, art 5(1)(a) and (b); Wood Floor Solutions Andreas Domberger GmbH v Silva Trade SA, ibid, Opinion of AG Trstenjak, para 86.

108 Somafer SA v Saar-Ferngas AG (n 79) para 13; SAR Schotte GmbH v Parfums Rothschild SARL (n 79), Opinion of AG Slynn; Lloyd's Register of Shipping v Société Campenon Bernard (n 91) para 20; Anton Durbeck GmbH v Den Norske Bank Asa [2003] QB 1160 (CA), para 40.

109 Brussels I Regulation, art 18(1).

110 The Dutch reporters for the ‘Study on Residual Jurisdiction’ conducted by A. Nuyts explain that this rule ‘has not been introduced into Dutch civil procedure because it was considered unnecessary’: available at <http://ec.europa.eu/civiljustice/news/docs/study_resid_jurisd_netherlands_en.pdf> 18 (accessed 15 September 2012).

111 Rome I Regulation, recitals 6, 16 and 23.

112 ECJ judgment, para 51; Voogsgeerd, AG Opinion, para 73.

113 See in this regard Jault-Seseke, F, ‘L'office du juge dans l'application de la règle de conflit de lois en matière de contrat de travail’ (2005) 94 Revue critique de droit international privé 253.

114 Rome I Regulation, art 4(1) and (2).

115 Rome I Regulation, art 4(4).

116 See Grušić, U, ‘The Territorial Scope of Employment Legislation and Choice of Law’ (2012) 75 MLR 722.

117 Lawson v Serco [2006] UKHL 3, paras 25–27.

118 ibid paras 28–33.

119 ibid para 36.

120 Ravat v Halliburton [2012] UKSC 1, para 27. See also Duncombe and others v Secretary of State for Children, Schools and Families (No 2) [2011] UKSC 36, paras 8 and 16.

121 Ravat v Halliburton, ibid para 28.

I am grateful to the anonymous referees for their helpful comments. The usual disclaimer, of course, applies.

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