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Employment Claims

Cross Border Employment Issues-Applicable Law, Jurisdiction, and Statutory Regime

cross border employment law

If employers and employees are located in different jurisdictions confusion can arise as to where an employee may enforce their legal entitlements. There are many types of legal rights, however, arising from a number of sources-for example the contract itself, statute, the constitution.

The questions arise as to what statutory regime will apply in any given situation, what is the applicable law of the contract of employment, and what Courts have jurisdiction to hear disputes.

Statutory regime?

The employee can rely on the statute law in force in the country where he/she works. This is so regardless of whether the contract says otherwise.

So, an employee working in Ireland for a US employer can rely on the Irish statutory employment law regime.

Likewise, an Irish employee working in Germany or France can enforce their rights in accordance with German or French employment law.

If the employee moves between two or more countries he can choose the statutory regime that is most favourable for his particular cause of action or issue.

Contract-what is the applicable law?

What is the applicable that will govern disputes between the parties arising from the contract?

What if the dispute is about the contract of employment and you will usually see a contract will state the ‘jurisdiction’ of the contract in the event of a dispute. However, the exclusive jurisdiction claimed by this clause in the contract can be curtailed or limited.

And jurisdiction is a different issue, in any event, than what is the applicable law in the evend of a dispute.

The ‘Rome 1 Regulation’ ( in respect of contracts of employment entered into on or after 17 December 2009, Article 8 of Regulation (EC) 593/2008, Rome) is the EU regulation which covers this area.

It states that the parties are free to choose what law will apply to the contract. If the parties have not chosen the rules are:

  1. The contract law applicable is the law of the country where the employee carries out his work
  2. if the employee is not fixed in one country the applicable law will be the law of the country where the business is located.

There is an exception to these two broad principles:if a contract is more closely connected to a particular country the law of that country will apply.

In looking at this ‘connection’ courts will look at a number of factors including

  • Where the employee is based
  • Where the employer is based
  • How the employee is paid
  • What currency
  • How the employee is managed
  • How disciplinary issues are dealt with, and from where

Jurisdiction-the Courts which can apply the applicable law

What courts have jurisdiction to hear an employment contract dispute?

The relevant regulation is Regulation (EU) 1215/2012, Brussels I (recast)

This Regulation allows the employee to sue

  1. Where the employer has its registered office or is domiciled
  2. Where the employee works

The employer can only sue on foot of the contract of employment where the employee is domiciled, notwithstanding the jurisdiction clause in the contract.

The Posted Workers Directive

The Posted Workers directive,Directive 96/71/EC, protects workers who are temporarily transferred or posted to another EU member state, by ensuring that they enjoy the same rights, terms and conditions as workers in the host state.

Conclusion

This is a potentially complex area of law; if you are involved in a potential dispute concerning cross border employment entitlements you ought to obtain legal advice.