Cross-border employment and the competent court

Article 19 of the Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Regulation (EC) No 44/2001)

An important question in international employment disputes is the court of which country is competent to handle a case.

According to Article 19 of the Regulation (EC) No 44/2001 an employer domiciled in a Member State may be sued:

1. in the courts of the Member State where he is domiciled; or
2. in another Member State:
(a) in the courts for the place where the employee habitually carries out his work or in the courts for the last place where he did so, or
(b) if the employee does not or did not habitually carry out his work in any one country, in the courts for the place where the business which engaged the employee is or was situated.

Competent court: the place where the employee habitually carries out his work

The European Court of Justice further explained the phrase ‘the place where the employee habitually carries out his work’ in several decisions. In case C-37/00 (Weber/Universal Ogden Services) and case C-29/10 (Koelzsch/ État du Grand-Duché de Luxembourg) for example, the court determines that this place is the place where the employee established the actual center of his business activities or from where he actually fulfills his duties towards the employer. In a situation in which an employee carries out his activities in more than one Contracting State, all circumstances have to be taken into account to determine the country in which the employee habitually carries out his work in performance of the contract:

1. The place where the employee performs the greater part of his obligations towards his employer;
2. The place from which the employee carries out his tasks, receives instructions concerning his tasks and organizes his work;
3. The places to which the employee returns after completion of his tasks after trips abroad for his work.

Two comparable Dutch cases

The Court of The Hague, 13 April 2012, LJN BW2227
The employer in this case, AYGI, is a company established in and under the law of England. AYGI has a branch office in the Netherlands and rents an official residence nearby for the employee. The employee institutes proceedings over the termination of his employment agreement against the employer before the Dutch court. AYGI challenges the competence of the court.

The employee states that he carries out his tasks for the employer almost exclusively from the Netherlands. AYGI challenges this and substantiates this by arguing that the seminars organized by the company do not take place in the Netherlands, the products sold by the company are not sold in the Netherlands and the administrative tasks the employee is in charge of are coordinated from the United Kingdom. The court rules that these circumstances do not prevent the employee of performing his duties from his place of residency in the Netherlands. Besides this AYGI is an international company: the seminars do not mainly take place in the United Kingdom, neither is this the main country where the products are sold. Finally, the employee does not have accommodation in the United Kingdom.

The court concludes that the Netherlands is the country in which the employee habitually carries out his work in performance of the contract. Therefore the Dutch court is competent in this case.

The Court of Arnhem, 31 October 2012, LJN BY2398
Rayner is a company established in and under the law of the United Kingdom. Rayner has no branch office in the Netherlands. The employee has the British nationality and is employed by Rayner since 1998. He lives in the Netherlands since 1997. The employee institutes proceedings over the termination of his employment agreement against the employer before the Dutch court. Rayner challenges the competence of the court.

The court ruled that all circumstances have to be taken into consideration.
The court established that the employer does not have any connection with the Netherlands jurisdiction. There is no need for the employee to be in the Netherlands for business tasks of business purposes. On the other hand, the employee carries out part of his tasks in the Netherlands due to his personal circumstances (living in the Netherlands). The court also takes into account that the employee has a connection with the United Kingdom in multiple ways: his nationality, the liaison with the employer and the nature of his work.

The court comes to the conclusion that the Dutch court has no jurisdiction in this case, since the Netherlands is not the country in which the employee habitually carries out his work in performance of the contract.

Conclusion

All in all it can be complicated to determine what court is competent under the Regulation (EC) No 44/2001 in a situation in which an employee carries out his activities in more than one Contracting State.

Further information

The Lawyers of the Labour and Employment Practice Group of Kernkamp Advocaten can assist you in determining whether the Dutch court is competent and discuss the advantages and disadvantages of filing proceedings in the Dutch jurisdiction. If you would like to avail over more information, please do not hesitate to contact our contact person.