Legal Updates

Employment Law – Governing Law of Contract of Employment For Mobile Employees

Under the Rome Convention and Rome I Regulation the governing law of a contract of employment, covering a number of European jurisdictions, should be determined as a question of fact.  In the case of Koelzsch v État du Grand-Duché de Luxembourg [2011], the European Court of Justice (ECJ) provided guidance for the purposes of ascertaining the Member state in which an employee “habitually carries out his work in performance of the contract”.  Interpretation must be broad and in favour of the employee in question.

The Koelzsch case involved a lorry driver who delivered goods across Europe, but with majority of deliveries taking place in Germany and he was German-based.  Upon termination of his employment, he sought to sue his employer for unfair dismissal under German law.  However, the employer was situated in Luxembourg and the governing law of the contract was Luxembourg law.

On the question of governing law in accordance with the Rome Convention and Rome I Regulation, the ECJ held that the national courts had to take into account all the factors in the case, including in the instant case, where the employee carried out his tasks, where he received his instructions from and prepares for work, as well as where his work equipment is stored, where goods are primarily unloaded and where the employee reverts to upon completion of his duties.

The case has been referred back to the national courts to decide.

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© RT COOPERS, 2011. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.