October 23, 2013

Jurisdiction of Contract of Employment

It has held that, under article 6 of the Rome Convention, the governing law for the contract will not necessarily always be the country where the employee works.

The ECJ held that it is open to a National Court to decide that the applicable law is that of another country if the contract is more closely associated with that country. In the absence of an express choice of contract jurisdiction by the parties, article 6 sets out factors to take into account in determining the governing law of a contract.

In this situation, the employee worked for a German company, with German managed benefits, lived in Germany, was paid in German marks (before the advent of the Euro) and paid taxes in Germany. Nonetheless he had worked for long, uninterrupted periods in the Netherlands. The ECJ held that just because of this, it did not necessarily mean that the governing law of the contract was the Netherlands and that it was open to the National Court to find that in fact this was Germany given the contract was more closely associated with Germany (taking into account the above factors) than the Netherlands.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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