EU Court Ruling Could Affect Employment Dispute Jurisdiction

| David O’Riordan

If you are a business owner who employs staff in overseas locations then you should be aware of a recent ruling by the Court of Justice of the European Union, as it may affect where any legal disputes involving your international employees will have to be heard.

Employment Law
Although the circumstances of the case in question relate specifically to the aviation industry, it does give an interesting insight into the Court’s interpretation of European rules relating to jurisdiction and what factors it believes should be taken into account when deciding where an employment dispute should be heard.
Many businesses in Ireland already employ workers overseas, and these numbers are likely to increase as Ireland seeks to forge new international trading links in light of the UK’s decision to leave the EU.

Facts of the Case

The case concerned six employees of Ryanair/Crewlink, from Belgium, Spain and Portugal, who all had employment disputes, such as wrongful dismissal cases, with their employer.
Their contracts of employment were drafted in English, were subject to Irish law and included a jurisdiction clause providing that the Irish courts had jurisdiction.
The contracts also stipulated that the work of the employees was to be regarded as being carried out in Ireland on the basis that their duties were performed on board aircraft registered in that country. In addition, the contracts designated Charleroi airport (Belgium) as the employees’ ‘home base’. The employees started and ended their working day at that airport, and they were contractually obliged to reside within an hour of their ‘home base’.
When the six employees raised their employment disputes, Ryanair was of the opinion these should be heard in Ireland, in line with the jurisdiction clause in their contracts. However, the employees brought their actions in the Belgian courts.
The Higher Labour Court in Belgium referred the case to the Court of Justice for clarification on jurisdiction, particularly within the context of the EU Regulation on jurisdiction in civil and commercial matters and EU regulations governing the field of civil aviation.

Decision on Jurisdiction

In giving its judgment, the Court of Justice noted that in employment contract disputes, European rules concerning jurisdiction are aimed at protecting the weaker party. An employee is therefore able to sue the employer in the courts which he regards as closest to his interests, and can choose between bringing proceedings before the courts of the Member State in which the employer is domiciled or the courts of the place in which the employee habitually carries out his work.
As a result, the jurisdiction clause contained within Ryanair’s employment contracts that sought to prevent employees from bringing proceedings before courts that have jurisdiction under EU legislation in this field was not enforceable.
In conclusion, the Court of Justice ruled that in disputes relating to their employment contracts, air crew members have the option of bringing proceedings before the courts of the place where they perform the essential part of their duties. It is up to the national court to determine where that place is in the light of all the relevant circumstances, and an employee’s ‘home base’ should be a significant indicator in that decision.

Reaction to the Ruling

Interestingly, both sides appear to have expressed their satisfaction with the ruling. The International Transport Workers’ Federation (ITF) and European Transport Workers’ Federation (ETF) described it as a major defeat for Ryanair on workers’ rights.
“This ruling is a defeat for Ryanair and a victory for workers’ rights,” explained Steve Cotton, general secretary of the ITF. “It upholds the fundamental principle of protecting mobile workers in aviation by ensuring that they can hold their employer to account in the country from which they genuinely discharge their duties – not in a nation which they may never have visited and whose courts are foreign and based hundreds of miles from home and place of work.”
However, Ryanair also seems to see the ruling as a victory of sorts.
“We welcome this “Mons” case ruling which upholds the existing EU rules on the jurisdiction of Member States national courts, and accepts Ryanair’s position that just one criteria (i.e. basing) cannot unilaterally determine jurisdiction,” said Ryanair’s Chief People Officer Eddie Wilson. “Maintaining broad assessment criteria ensures that the most appropriate jurisdiction should apply in cases involving international transport workers rather than a sole criterion approach, which would narrow the assessment and restrict movement and flexibility with a myriad of regulations and different crews throughout Europe.”

Implications for Business Owners

This ruling has implications for business owners in Ireland who employ staff in international locations, and particularly those that currently seek to impose Irish jurisdiction on any disputes that arise through the employment relationship.
The Court of Justice has made it clear that under European law employees, as the weaker party, can choose to have a dispute heard in the court of the country where they are based, as opposed to the court of the country where the employer is domiciled, should they feel that this would be in their best interests. This right supersedes any jurisdictional provision in the employment contract.
Obviously, business owners should always be looking to minimise the risk of employment disputes developing in the first place, while effectively managing those that do, and working with experienced employment lawyers can help to achieve this. However, there are occasions where disputes escalate to the point where they cannot be resolved internally, and in these situations employers will need to be prepared for the possibility of having to go to court in the country where the employee is based.

Contact Us

Employment disputes involving international employees and overseas locations can become very complex and expert legal advice should always be sought at an early a stage as possible. At Sherwin O’Riordan our specialist employment lawyers will work with you to help resolve workplace disputes as quickly and effectively as possible.
For a free initial conversation call