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.