Case law Developments in PIL Views and comments

Gruber and Samidani Trans: Dépeçage for International Employment Contracts

The author of this post is Erik Sinander, Senior lecturer at the Stockholm University.

In a judgment of 15 July 2021, over two joined Romanian cases (C-152/20 and C-218/20, DG and EH v SC Gruber Logistics SRL and Sindicatul Lucrătorilor din Transporturi v SC Samidani Trans SRL), the CJEU confirmed that the choice of law rule for employment contracts in Article 8 of the Rome I Regulation demands parallel application (dépeçage) of the law chosen by the parties and the law that would have been applicable if no choice of law was done. Both cases concerned whether lorry drivers employed by Romanian companies were entitled to minimum wage according to Italian respectively German law despite the fact that Romanian law was chosen for the employment contracts.

In its judgment, the CJEU confirmed that the law that the parties have chosen in their employment contract (subjectively applicable law) shall be applied as a starting point and that the law that would have been applicable if no choice of law would have been done (objectively applicable law) shall breakthrough in issues where the latter law offers the employee protection that cannot be derogated from by agreement under that law. The court reiterated the wording of the Regulation as it confirmed that whether a provision in the objectively applicable law can be derogated from shall be decided according to that law. Further, the court held that the prerequisite of a free choice according to Article 3 is not invoked solely by the fact that the choice of law clause has been included in the contract by the employer in a pre-formulated employment contract.

The judgment is in no way surprising, but the trickiest part of the parallel application methodology prescribed in Article 8 is left undiscussed. For the objectively applicable law to breakthrough it is not enough that the provision is mandatory. In addition, it must also offer the employee protection. How do we then know whether the employee is offered protection by the provision in the objectively applicable law? That this issue was not discussed in the judgment can simply be explained by the fact that the Romanian courts did not ask about it. Nonetheless, it is an interesting issue that deserves some attention.

As long as the employment protection mechanism in the subjectively applicable law and the objectively applicable law are equivalent, Article 8 is unproblematic. A lower minimum wage according to the subjectively applicable law can simply be replaced by the rules granting higher minimum wage in the objectively applicable law. When the two laws’ employment protection mechanisms are based on different ideas, it is harder to make the comparison. That might be the case if the matter concerns a wrongful dismissal and the subjectively applicable law offers a stronger right for the employee to return to the job whereas the objectively applicable law offers better compensation. In such a situation, the court can hardly make this evaluation as there is no objective way to evaluate different employment protection mechanisms.

Personally I think that the idea of international harmony of decisions shall be leading for how the evaluation of protection provisions shall be made according to Article 8 of the Rome I Regulation. To let the courts decide the evaluation of different employment protection mechanisms will inevitably lead to a situation where the decisions are dependent on where they are settled. That would be unsatisfactory. Instead, it would be preferable to let the employee decide self whether the objectively applicable law shall prevail in a specific situation. Such a method is of course casuistic, but it is the more reasonable solution. Relying on the employee’s own choice has the advantage that it simplifies the comparison for the court.

4 comments on “Gruber and Samidani Trans: Dépeçage for International Employment Contracts

  1. Marta Requejo Isidro

    Thanks for the comment, Erik.
    May I ask how leaving a choice (whether the objectively applicable law prevails or not) to the employee ensures the international harmony of decisions? And, does this solution fit with the legal provision?
    Finally, would you apply the same solution if, instead of an employment contract, the contract is concluded by a consumer?

    • Erik Sinander

      Thank you for your question, Marta.

      My argument relies on the premise that it is impossible to make an objective evaluation of what is ”protection” that the employee cannot be deprived of according to article 8.1 in the Rome I Regulation. Someone has to evaluate whether a provision offers such protection. If the national courts shall do that there is a risk that the conclusion will differ dependent on in what national court the laws are applied. That risk undermines international harmony of decisions in my opinion. If on the other hand the employee (who is supposed to be protected by the protection provisions) self can decide whether the subjectively applicable law shall break through the objectively applicable law, the comparison will be the same in all relevant jursidictions. Hence, I think that international harmony of decisions will be served in casu in the sense that the same matter will have the same outcome regardless of where it is settled.

      I see no reason for why my method could not be applied also to consumer contracts. Just like article 8, also article 6 lacks guidlines for how to interpret protection.

      Does my argument make sense to you?

      • Marta Requejo Isidro

        Thanks, Erik.
        I see the principle underlying the answer. But – the old problem: will it work in practice? It presupposes that the employees, or, as the case may be, the trade unions behind, are well-informed and able to make the comparison. It also requires some degree of uniform thinking among employees suing in different member States: otherwise the problem of lack of consistency persists.
        At the end of the day, it may be more realistic to concentrate simply on the protection of the employee in the case at hand, which is the first objective of the rule, giving up the idea of idea of a pan-European solution (I am assuming we understand international harmony of solutions in the same way, or with the same scope).
        Regarding the consumers, my question is linked to the case law of the Court of Justice. Whether the trend to impose ex officio action on the national judge would apply here requires of course deeper reflection, but I would not exclude it from the outset.
        Just some thoughts triggered by your post – so, thaks again!

        • Erik Sinander

          Happy to hear that my post triggered some thoughts! So did your comments. Thank you for that.

          How article 8 works in practice is a good question that I cannot really answer.

          You write in your reply that “it may be more realistic to concentrate simply on the protection of the employee in the case at hand”. I agree, but then again, who and how shall evaluate what is protective to the employee? Let me illustrate the problem with an example.

          Assume that there is a dispute on wrongful termination of an international employment contract. According to a choice of law clause in the employment contract, the law of country A shall be applied. If the parties had not chosen the law applicable to the employment contract, article 8 would point out the law of country B as applicable. If the law of country A admits economic compensation for wrongful termination whereas country B grants a prolonged notice period of e.g. 6 months it might be hard for the court to assess whether the prolonged notice period is such a protection provision that shall prevail.

          A long notice period is not always beneficial for an employee who might want to get a new job. In such a situation I think that it could be wise to let the employee decide whether the prolonged notice period of country B shall prevail. That can be assessed from how the plaint (the employee is almost always the plaintiff in employment law issues) is formulated and/or with the court’s direction of the proceeding.

          Is it the CJEU case law on unfair terms in consumer contracts that you think of? In this regard, I fully agree that the width of the ex officio-obligations under directive 93/13 for courts requires deeper reflection.

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