Preparing for Brussels I recast—employment

With Brussels I (recast) set to apply from 10 January 2015, we continue our series considering what lawyers need to be aware of and prepare for when dealing with matters under the new regulation.

In our fifth installment, Dr Ugljesa Grusic, an assistant Professor in Law at the School of Law of the University of Nottingham, considers the likely impact of the changes on employment disputes.

What is the effect of the change in wording in section 5 dealing with employment contracts?

Brussels I (recast) (EU) 1215/2012 introduces three changes in section 5 of Chapter II, concerning adjudicatory jurisdiction in employment matters. First, employees (but not employers) are given the right to invoke the rule of jurisdiction over co-defendants contained in art 8(1) (see art 20(1) of Brussels I (recast)). Second, it is clarified that employees can sue their employers in the courts for the place where or from where the employee habitually carries out his work (see art 21(1)(b)(i)). Third, the rules of jurisdiction based on the habitual place of work and on the engaging place of business can now be invoked against all employers, regardless of their domicile, if the relevant connecting factor is located within the EU (see art 21(2)).

The aim of the first change is to reverse the Court of Justice of the European Union (CJEU) decision in Glaxosmithkline v Rouard: C-462/06 [2008] ECR I-3965, [2008] All ER (D) 312 (May). This will have a considerable effect on cross-border triangular employment relationships such as employment within multinational corporate groups or cross-border agency employment. As of 10 January 2015, an employee who is directly employed by one entity (eg a member of a corporate group or an employment agency) from one member state and wants to bring an employment claim not only against the direct employer but also against a related entity (eg another member of the group or the end-user) from another member state will be able to commence proceedings against one of the defendants in the courts of their domicile and join the other defendant to these proceedings, provided there is a sufficient connection between the two claims.

The second change is there to clarify that peripatetic employees such as international transport workers can sue their employers in the courts for the place from where they habitually carry out their work. It is therefore now reasonably clear that pilots and other air crew members can commence employment proceedings in the country where they are based.

Finally, the international scope of the rules of jurisdiction based on the habitual place of work and on the engaging place of business is extended to employers that are non-EU domiciliaries and employ people within the EU. The practical effect of this change is that employees who wish to sue such employers in the courts of a member state can rely either on art 21(1) of Brussels I (recast) or on the traditional jurisdictional rules of the forum country. If an employee relies on art 21(1) of Brussels I (recast) to commence proceedings against an employer that is not domiciled in the EU, the employer will not be able to rely on a choice-of-court agreement in favour of the courts of another country.

What impact is it likely to have in practice?

The aim of these changes is to increase access to justice to employees in cross-border employment disputes. The reinstatement of the right of employees to invoke the rule of jurisdiction over co-defendants is of great practical importance because of a growing number of cross-border triangular employment relationships. The clarification that peripatetic employees can sue their employers in the courts for the place from where they habitually carry out their work is also significant. Although this change merely implements the CJEU’s interpretation of the rule of jurisdiction based on the habitual place of work, its likely impact is that it will resolve a deadlock that has occurred in certain member states (eg Belgium) over the question of whether air crew members can commence employment proceedings in the country where they are based. Finally, the extension of the international scope of the rules of jurisdiction based on the habitual place of work and on the engaging place of business will benefit employees who wish to commence proceedings in one of a few member states whose traditional jurisdictional rules do not confer jurisdiction on their courts on the basis of the habitual place of work being in that country.

What is the effect of the provisions in art 26 dealing with a defendant entering an appearance which is also amended to seek to protect the weaker party?

Article 26(2) provides that, where the employee is the defendant, the court shall, before assuming jurisdiction on the basis of submission by entering an appearance, ensure that the defendant is informed of his or her right to contest the jurisdiction of the court and of the consequences of entering or not entering an appearance. This provision provides a welcome clarification that submission by entering an appearance is possible in employment disputes, while protecting employees from unwitting submissions.

Are there any further comments or observations you wish to add?

Brussels I (recast) introduces two other changes concerning cross-border employment disputes. Unlike the Brussels I Regulation (EC) 44/2001, Brussels I (recast) allows employees to object to the recognition and enforcement of a judgment from another member state on the basis that the court of origin did not have jurisdiction under Brussels I (recast)’s special rules of jurisdiction in employment matters (see art 45(1)(e)(i)). Secondly, the rules concerning lis pendens of art 31(2) and (3), which give priority with regard to the establishment of jurisdiction to the court of a member state that is seised on the basis of a jurisdiction agreement, do not apply where the employee is the claimant and the jurisdiction agreement is not valid in accordance with special rules concerning jurisdiction agreements in employment disputes of art 23 (see art 31(4)).

Dr Ugljesa Grusic’s expertise includes private international law, especially European private international law; international commercial arbitration; and international investment law, particularly ICSID arbitration. His book on ‘The European Private International Law of Employment’ will be published in 2015.

Interviewed by Kate Beaumont.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

Don't miss the rest of the series:

Preparing for Brussels I recast—reversing Gasser

Preparing for Brussels I recast—declining jurisdiction in favour of the first court seised

Preparing for Brussels I recast—choice of court agreements

Preparing for Brussels I recast—arbitration

Filed Under: Brussels I Reform

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