Posts Tagged Employment

Expect some final turbulence. CJEU wrongfoots Ryanair and Crewlink on ‘place where the employee habitually carries out his work’.

I reported earlier on Saugmandsgaard ØE’s opinion in Cases C‑168/16 and C‑169/16, Nogueira et al and Osacar v Ryanair. The CJEU yesterday held and as I put it in immediate comment on the case reported in the FT, the Court’s view clearly resonates with the current mood against social dumping.

The case here ostensibly concerns jurisdiction only, however the Rome I Regulation includes mandatory protection of the employee guaranteed by the laws of the same place where (s)he habitually carries out his /her work. Hence a finding in the context of the Brussels I Recast inevitably has an impact on applicable law, too.

Firstly the Court has no mercy for the limiting choice of court agreement in the relevant contracts (at 53): in the case of employment contracts, a jurisdiction clause cannot apply exclusively and thus prohibit the employee from bringing proceedings before the courts which have jurisdiction under the protective regime of the Brussels I Recast.

The Court then essentially reiterates its AG: The concept of ‘place where the employee habitually carries out his work’ must be interpreted as referring to the place where, or from which, the employee in fact performs the essential part of his duties vis-à-vis his employer (at 59). Referring to its earlier case-law, the Court reiterates that national courts must, in particular, determine in which Member State is situated (i) the place from which the employee carries out his transport-related tasks, (ii) the place where he returns after his tasks, receives instructions concerning his tasks and organises his work, and (iii) the place where his work tools are to be found. (at 63). The place where the aircraft aboard which the work is habitually performed are stationed must also be taken into account (at 64).

The CJEU’s judgment then zooms in particularly on the notion of ‘home base’, a term used in relevant EU civil aviation law. The concept of ‘place where, or from which, the employee habitually performs his work’ cannot be equated with any concept referred to in another act of EU law (at 65).  However that does not mean that it is irrelevant to determine the place from which an employee habitually carries out his work. In fact, the Court held, the concept is likely to play a significant role in the identification of place of habitual employment in cases as these (at 69). In fact, taking account of the facts of each of the present cases, it would only be if applications, such as those at issue in the main proceedings, were to display closer connections with a place other than the ‘home base’ that the relevance of the latter for the identification of ‘the place from which employees habitually carry out their work’ would be undermined (at 73).

Nationality of the aircraft is summarily dismissed at 75, as being of any relevance at all.

At 62, the Court, importantly, also wars against fraudulent forum shopping: ‘That circumstantial method makes it possible not only to reflect the true nature of legal relationships, in that it must take account of all the factors which characterise the activity of the employee (see, by analogy, judgment of 15 March 2011, Koelzsch, C‑29/10, EU:C:2011:151, paragraph 48), but also to prevent a concept such as that of ‘place where, or from which, the employee habitually performs his work’ from being exploited or contributing to the achievement of circumvention strategies (see, by analogy, judgment of 27 October 2016, D’Oultremont andOthers, C‑290/15, EU:C:2016:816, paragraph 48 and the case-law cited).

The case now goes back to Mons howecer as has been reported, it is almost inconceivable for that court not to find Charleroi to be the place of habitual employment. Despite Ryanairs bravado, it is clear this judgment blows a hole in its regulatory strategy.

Geert.

(Handbook of) EU Private International Law, 2nd ed 2016, Chapter 2, Heading , Chapter 3, Heading 3.2.5.

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An update from the social dumping flightdeck. Saugmandsgaard ØE advises against Ryanair and Crewlink on ‘place where the employee habitually carries out his work’.

Saugmandsgaard ØE this morning Opined in Joined Cases C‑168/16 and C‑169/16, Nogueira et al and Osacar v Ryanair. Reference in the case was made by the Court of Appeal at Mons /Bergen in the Ryanair case I reported on in first instance. The weakest part of that judgment, I noted, was that it looked to the employer’s organisation as the most relevant criterion when deciding upon place of habitual employment. That clearly went against the favor laboris inherent in Article 19 of the Brussels I Recast Regulation.

The Advocate General at 100 in particular agrees with that view. Regular readers will know that I do not tend to paraphrase for the sake of it hence reference is best made to the AG’s Opinion as a whole. In summary:  Saugmandsgaard ØE recalls that CJEU case-law on the matter essentially requires the courts to either identify the ‘place where’ the employee principally carries out his obligations vis-à-vis his employer, or the ‘place from which’ he principally carries out those obligations. The workers at issue were employed as cabin crew on aircraft operated by Ryanair. Those employees performed their work in more than one Member State, namely in Belgium, where the airport of departure (Charleroi) was situated, the Member State of the airport of arrival and any other Member States crossed during the flight.  The AG suggests (at 92) that it is not possible, in such circumstances, to identify a ‘place where’ those employees principally carried out their obligations vis-à-vis their employers, for it is difficult to attach greater weight to the tasks carried out by those employees in the airport of departure, on board the aircraft or in the airport of arrival.

A ‘place from which’ those employees principally carried out their obligations vis-à-vis their employers, however, can be identified.  The referring court had listed a number of factual considerations among which the AG suggests the following as being highly relevant: (97 ff)

First, appellants started and ended their working day at Charleroi Airport. To the AG’s mind, that fact is of overriding importance, which he suggests is confirmed by the Court’s consistent case-law in particular Koelzch and Voogsgeerd.

Second, appellants received the instructions relating to their tasks and organised their work at Charleroi Airport, by consulting their employers’ intranet. (It is on this point that the AG rejects any relevance of the location of organisation of the work schedule by the employer).

Third, the aircraft operated by Ryanair, and on board which appellants worked as cabin staff, were based at Charleroi. Here the AG refers to CJEU case-law that, in the international transport sector, the place where the work tools are located constitutes a relevant indicium for the purposes of determining the place from which the worker principally fulfils his obligations vis-à-vis his employer.

Fourth, appellants were contractually required to live less than one hour from Charleroi Airport. It is noteworthy that this indication refers not to the worker’s actual place of residence but rather to the place of work near which he lives, namely Charleroi Airport in the main proceedings (at 103).

Fifth, the referring court noted that Ryanair and Crewlink jointly had a ‘crew room’ at Charleroi Airport. The existence of an office made available by the employer is another factor the relevance of which has been emphasised in the Court’s case-law. That this is not formally a ‘branch’ of either company, is irrelevant.

Finally, appellants were required to attend Charleroi Airport if they were unfit for work and in the event of disciplinary problems.

The AG points out that on the basis of the criteria, the Court at Mons formally will have to complete the analysis, however he concludes (at 107) that on the basis of the findings of fact communicated by that court in its request for a preliminary ruling, those six indicia unequivocally designate the courts of the place where Charleroi Airport is situated.

A few other issues are worth mentioning. Firstly (at 108) whether the worker is directly employed by Ryanair (Case C‑169/16) or assigned to Ryanair by Crewlink (Case C‑168/16) is irrelevant for the purposes of identifying the place where the work is habitually carried out, within the meaning of Article 19(2)(a) of Regulation No 44/2001. That place, the AG suggests, is independent of the legal link between the worker and the person who benefits from the work done.

Further, the AG suggests that the concept of ‘home base’ has  relevance to the analysis, albeit indirect. ‘Home base’ is a term used in relevant EU civil aviation law. At 109 ff: ‘place where the employee habitually carries out his work’, used in Article 19(2) of Regulation No 44/2001, should not have to depend on a concept in an act of Union law which belongs to a quite different area, namely that of the harmonisation of rules in the civil aviation sector.’ At 116: the relevance of the home base, for the purposes of identifying the place where the contract of employment is habitually carried out, is only indirect. Indeed, it should be taken into account only in so far as it supports the indicia mentioned above as relevant for the purposes of identifying that place.’ (Which it certainly did in casu).

Further and convincingly, the AG emphatically suggests that the nationality of the aircraft is entirely irrelevant for the discussion (118 ff).

Finally, at 73 ff the AG suggests that there ought to be parallel interpretation of the findings on jurisdiction, and the rules on applicable law, among others in the Rome I Regulation. Those rules were not included in the referring court’s request for preliminary ruling.

We have to await the Court’s judgment, of course. However all in al this is a convincing Opinion which, as specifically flagged by the AG (at 101), is instrumental in addressing forum shopping by employers and consequently will be extremely helpful in addressing social dumping in the EU.

Geert.

Handbook of) EU Private International Law, 2nd ed 2016, Chapter 2, Heading , Chapter 3, Heading 3.2.5.

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Citysprint: Speeding away from legalese. Employment tribunals act against windowdressing in the ‘gig’ economy.

The issue under consideration in Citysprint was whether claimant, Ms Dewhurst, a cycle courier, was an employee of Citysprint or rather, as defendant would have it, a self-employed contractor. I am not a labour lawyer but I do have an interest in the ‘gig economy’, peer to peer etc. [Note Google defines (or conjures up a definition of) the gig economy as a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs].

I also have an interest in language and the law. After an employment tribunal in Uber blasted the company’s use of byzantine language, in Citysprint, too, (in particular at 64 ff) the tribunal looks beyond the fog of legalese to qualify the contract for what it really is. A great development.

Geert.

 

 

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Conflicts, conflicts Uber-al. Employment and conflict of laws (Rome I) in the Uber decision.

Update 10 November 2017: [2017] UKEAT 0056_17_1011: The Appeals Tribunal has confirmed.

Thank you Steve Peers for alerting me to the relevance of the conflict of laws and the Rome I Regulation in particular in the recent Aslam et al v Uber Employment Tribunal decision. The case essentially revolves around whether claimants are employees – it is a pivotal case determining the immediate regulatory context for this part of the ‘sharing economy’. Para 87 is a particularly delightful expression of scepticism towards the sharing economy’s claims (further highlights are here).

Conflict of laws is addressed at para 103 onwards, a completion of the analysis in case of rejection of the tribunal’s view that the UK company in the Uber group employs claimants, and instead one would have to regard Uber BV (of The Netherlands) as employer. I do not think the tribunal expresses itself entirely clearly on Rome I.

If Uber BV is the employer, reclassification of the contract as one of employment (as opposed to one for the provision of services), makes the choice of law for Dutch law partially inoperable (not, as the tribunal notes at para 105 in fine, replaced with the laws on England and Wales). Next the tribunal (paras 106-109) continues to speak of ’employer’ but reviews application of Article 3 (including the application of Article 3(3)’s ‘purely domestic contracts’. If there is a contract of employment, in my view only Article 3(1) and (2) can have any impact on the analysis: the remainder of Article 3 concerns provisions for which Article 8 itself provides exhaustive rules.

From para 110 onwards, the tribunal does more tidily address Article 8 Rome I and holds, after reference to counsel view, that if indeed the Dutch BV is the employer (for it does not suggest that the contract would have to be qualified as one of services), Dutch law would largely apply, except for a limited number of provisions of English law by way of mandatory rules. (Reference to Article 21’s ordre public is justifiably rejected).

I am assuming Uber are appealing. Expect the conflicts analysis to return.

Geert.

(Handbook of) European private international law, Chapter 3, Heading 3.2.5.

 

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Commission effectively supplements Rome I using the posted workers Directive. Defines ‘temporary employment’ as not exceeding 24 months.

Update 31 May 2017 A quick note by way of interim update: the proposal is stuck in Parliament (awaiting committee decision).

Thank you Fieke van Overbeeke for pointing this out to me. The EC have proposed to amend the posted workers Directive, to address unfair practices and promote the principle that the same work at the same place be remunerated in the same manner.

The amendment essentially relates to Article 8(2) of the Rome I Regulation, which partially corrects choice of law made in the context of contracts for employment. The proposal amounts to Union harmonisation of the concept ‘temporary employment’, as one not exceeding 24 months.

The proposal, if adopted, would insert an Article 2a in the posted workers Directive, 96/71, as follows:

Article 2a
Posting exceeding twenty-four months
1. When the anticipated or the effective duration of posting exceeds twenty-four
months, the Member State to whose territory a worker is posted shall be deemed to
be the country in which his or her work is habitually carried out.
2. For the purpose of paragraph 1, in case of replacement of posted workers
performing the same task at the same place, the cumulative duration of the posting
periods of the workers concerned shall be taken into account, with regard to workers
that are posted for an effective duration of at least six months.

Recitals 6-8 give context:

(6) The Rome I Regulation generally permits employers and employees to choose the law
applicable to the employment contract. However, the employee must not be deprived
of the protection of the mandatory rules of the law of the country in which or, failing
that, from which the employee habitually carries out his work. In the absence of
choice, the contract is governed by the law of the country in which or, failing that,
from which the employee habitually carries out his work in performance of the
contract.
(7) The Rome I Regulation provides that the country where the work is habitually carried
out shall not be deemed to have changed if he is temporarily employed in another
country.
(8) In view of the long duration of certain posting assignments, it is necessary to provide
that, in case of posting lasting for periods higher than 24 months, the host Member
State is deemed to be the country in which the work is carried out. In accordance with
the principle of Rome I Regulation, the law of the host Member Sates therefore applies
to the employment contract of such posted workers if no other choice of law was made
by the parties. In case a different choice was made, it cannot, however, have the result
of depriving the employee of the protection afforded to him by provisions that cannot
be derogated from by agreement under the law of the host Member State. This should
apply from the start of the posting assignment whenever it is envisaged for more than
24 months and from the first day subsequent to the 24 months when it effectively
exceeds this duration. This rule does not affect the right of undertakings posting
workers to the territory of another Member State to invoke the freedom to provide
services in circumstances also where the posting exceeds 24 months. The purpose is
merely to create legal certainty in the application of the Rome I Regulation to a
specific situation, without amending that Regulation in any way. The employee will in
particular enjoy the protection and benefits pursuant to the Rome I Regulation.

It would obviously be attractive to ensure the same rule is verbatim included in a future amendment of the Rome I Regulation.

Geert.

(Handbook of) EU Private International Law, 2nd ed 2016, Chapter 3, Heading 3.2.5.

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Defining ’employment ‘. CJEU confirms AG Opinion in Holterman: dual director /employee capacity.

The CJEU yesterday confirmed the Opinion of Cruz Villalón AG in Holterman: please refer to my posting on the Opinion for background.

In particular, a contract for employment needs to be distinguished from a contract for the provision of services. ‘Contract of employment’ was addressed in the abstract by the CJEU in Shenavai, Case 266/85, where the Court identified a double requirement for it referred to the need for a contract to be qualified as a contract of employment: there must be durable relation between individual and company: a lasting bond, which brings the worker to some extent within the organisational framework of the business; and a link between the contract and the place where the activities are pursued, which determines the application of mandatory rules and collective agreements. However precedent value of Shenavai for the Brussels I and recast Regulation is necessarily incomplete, for at the time employees as a protected category did not yet exist in the Regulation and the Court’s findings on contracts of employment took place within the need to identify a ‘place of performance’ under the Brussels Convention’s special jurisdictional rule on contracts.

The Jenard and Möller report to the 1988 Lugano Convention suggested the relationship of subordination of the employee to the employer.

In Holterman the Court throws into the mix reference to its interpretation of secondary EU law on health and safety at work as well as European labour law, holding that ‘the essential feature of an employment relationship is that for a certain period of time one person performs services for and under the direction of another in return for which he receives remuneration’ (at 41).

Consequently the national courts now have quite a number of criteria which they need to apply in practice: it is not for the CJEU to do so in an individual case. In Holterman the Court does seem to suggest that once a worker finds himself qualified as an employee, for the purposes of the application of the Jurisdiction Regulation, that qualification will trump any other roles which that individual may play in the organisation (at 49: ‘the provisions of Chapter II, Section 5 (Articles 18 to 21) of Regulation No 44/2001 must be interpreted as meaning that they preclude the application of Article 5(1) and (3) of that regulation, provided that that person, in his capacity as director and manager, for a certain period of time performed services for and under the direction of that company in return for which he received remuneration, that being a matter for the referring court to determine.’).

In light of the deference to the factual assessment of the national court, the CJEU does complete the analysis with respect to (now) Article 7(1): if the contract is not one of employment, then the special jurisdictional rule of Article 7(1) needs to be applied. The director of a company, the Court holds, provides a service to the company within the meaning of Article 7(1)b. In the absence of any derogating stipulation in the articles of association of the company, or in any other document, it is for the referring court to determine the place where Mr Spies in fact, for the most part, carried out his activities in the performance of the contract, provided that the provision of services in that place is not contrary to the parties’ intentions as indicated by what was agreed. For that purpose, it is possible to take into consideration, in particular, the time spent in those places and the importance of the activities carried out there, it being a matter for the national court to determine whether it has jurisdiction in the light of the evidence submitted to it (at 64).

Finally, should national law also allow for an action in tort against the director of a company, the locus delicti commissi is the place where the director carries out his duties for the company (at 76). The locus damni is the place where the damage alleged by the company actually manifests itself; it cannot be construed so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually taking place elsewhere (at 77-78).

All in all, a useful completion of the Shenavai criterion, and in the main a referral to the national court for factual analysis.

Geert.

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Defining ’employment’. CRUZ VILLALÓN AG in Holterman on applying Brussels I to defendant with dual director/employee capacity

CRUZ VILLALÓN AG Opined yesterday in C-47/14 Holterman (no EN version of the Opinion was available at the time of writing). What if a defendant is pursued both on the basis of his capacity as a director of the company, and for alleged failure properly to have carried out his duties as employee?

Applicant Holterman is incorporated in The Netherlands. Defendant is Mr Spies, a German national, domiciled in Germany. He was employed by applicant between 2001 and 2005/06, first as employee, subsequently also as director of Holterman’s establishments in Germany. Applicant alleges that defendant has caused damage as a result of improper fulfillment of his duties, indeed intentional recklessness, as director. Application is made at the court at Arnhem, where Spies successfully argues that the court has no jurisdiction on the basis that application has to be made of the protective category of ‘individual contracts of employment’.

Questions referred, were

1.    Must the provisions of Section 5 of Chapter II (Articles 18-21) of Regulation (EC) No 44/2001 1 be interpreted as precluding the application by the courts of Article 5(1)(a) or of Article 5(3) of that Regulation in a case such as that at issue here, where the defendant is held liable by the company not only in his capacity as director of that company on the basis of the improper performance of his duties or on the basis of unlawful conduct, but quite apart from that capacity, is also held liable by that company on the basis of intent or deliberate recklessness in the execution of the contract of employment entered into between him and the company?

2    (a) If the answer to question 1 is in the negative, must the term ‘matters relating to a contract’ in Article 5(1)(a) of Regulation (EC) No 44/2001 then be interpreted as also applying to a case such as that at issue here, where a company holds a person liable in his capacity as director of that company on the basis of the breach of his obligation to properly perform his duties under company law?

(b) If the answer to question 2(a) is in the affirmative, must the term ‘place of performance of the obligation in question’ in Article 5(1)(a) of Regulation (EC) No 44/2001 then be interpreted as referring to the place where the director performed or should have performed his duties under company law, which, as a rule, will be the place where the company concerned has its central administration or its principal place of business, as referred to in Article 60(1)(b) and (c) of that Regulation?

3    (a) If the answer to question 1 is in the negative, must the term ‘matters relating to tort, delict or quasi-delict’ in Article 5(3) of Regulation (EC) No 44/2001 then be interpreted as also applying to a case such as that at issue here, where a company holds a person liable in his capacity as director of that company on the basis of the improper performance of his duties under company law or on the basis of unlawful conduct?

(b) If the answer to question 3(a) is in the affirmative, must the term ‘place where the harmful event occurred or may occur’ in Article 5(3) of Regulation (EC) No 44/2001 be interpreted as referring to the place where the director performed or should have performed his duties under company law, which, as a rule, will be the place where the company concerned has its central administration or its principal place of business, as referred to in Article 60(1)(b) and (c) of that Regulation?

Spies essentially argues that the employment section of the Regulation trumps concurrent jurisdiction on the basis of contract. ‘Contract of employment’ so far has not been addressed in the abstract by the ECJ, other than incompletely in Shenavai Case 266/85, where it referred to the need for a durable relation between individual and company. In particular of course, a contract for employment needs to be distinguished from a contract for the provision of services. The Advocate General takes inspiration from the protective intent of the employment contracts heading, to suggest that supervision and instruction, jointly summarised as ‘subordination’, are determining factors for positions of employment. Even higher management can find itself in such position, given that and provided its actions, notwithstanding a wide independent remit, are subject to control and direction of the companies’ bodies. Review of the company’s by-laws should reveal the existence of such control vis-a-vis higher management, read together with the terms and conditions of the contract of employment at issue (at 32). It is only, per Asscher, C‑107/94, if management itself through its shareholding, exercises control over those bodies, that the position of subordination disappears.

Once the national court, on the basis of ad hoc analysis, holds that there is a position of employment, the national court has to apply Brogsitter per analogia: namely whether the action concerned follows from an alleged improper fulfillment of that agreement (as opposed to an improper fulfillment of duties as a director).

In subsidiary fashion only, does the AG entertain the questions relating to Article 5(1) and 5(3) (now 7(1) and 7(2) respectively). Spies’ duties as a director (again, should the ECJ find against applicability of the employment section) have to be considered ‘contractual’ within the meaning of the Regulation. The place of performance of the obligation in the view of the AG needs to be determined using Article 7(1)b, ‘the place in a Member State where, under the contract, the services were provided or should have been provided;’. Using Car Trim and Wood Floor Solutions and quoting Stephanie Francq, the AG suggests the national court identify the location where the service was mainly provided.

The AG’s views on the employment heading, however, seem solid and I would be surprised were the ECJ to have to go into the subsidiary questions.

Geert.

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