An employment contract is international when a foreign origin element is attached to the contract (it can be due to the nationality of the parties or the place where the contract is executed). Thus, they have to follow specific rules.
Indeed, two main provisions determine the relevant applicable law.
-The Rome Convention applies to contracts signed before the 17th December 2009
-Regulation Rome I, nowadays mainly used, is applicable for contracts signed after the 17th December 2009 (we will focus on this later).
Regulation Rome I has a universal scope as it can be used even if the parties are not members of the European Union or even if the relevant law is not the one of a EU member state, provided that the judge who is competent is a judge from a member state.
WHAT IS THE RELEVANT APPLICABLE LAW FOR INTERNATIONAL EMPLOYMENT CONTRACTS?
THE PRINCIPLE: FREEDOM OF CHOICE
Regulation Rome I on the law applicable to contractual obligations (Rome I) establishes the principle of freedom of choice (article 3) “A contract shall be governed by the law chosen by the parties. The choice shall be made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or to part only of the contract.”
Thus, an employment contract may be governed by the law chosen by the parties. However, this principle is considerably restricted because of the necessity to protect the weak party: the employees. Indeed, employers could abuse from their dominant position and impose an unfavourable law to their employees. In order to protect them, employment law has implemented mandatory and public order provisions.
LIMITS TO THE PRINCIPLE: the protective measures designed to govern the individual employment contracts:
Pursuant to article 8§1, the freedom of choice granted to the parties should not have the result of depriving the employee from the protection afforded to him by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable.
To the extent that the law applicable to the individual employment contract has not been chosen by the parties, the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract. The country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country (art8§2).
Where the law applicable cannot be determined pursuant to paragraph 2, the contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated.
Where it appears from the circumstances as a whole that the contract is more closely connected with a country other than that indicated in paragraphs 2 or 3, the law of that other country shall apply
THE OVERRIDING MANDATORY PROVISIONS
Article 9 deals with the overriding mandatory provisions, these overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organization, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation
The mandatory provisions are those which cannot be derogated from by contract, they are in the public order scope and social order. For example, the regulation of paid leave and termination provisions in France are dealt as public order provisions, from which it is forbidden to deviate even if it is more favourable to the employee. The French Supreme Court has an extensive interpretation of these employees rights (Supreme Court, Ch Soc 26 March 2013- Case No. 11-25580).
THE COMPETENT JURISDICTIONS
EC Regulation No. 44/2001 provides in Chapter « Jurisdiction » Section 5: jurisdiction over individual contracts of employment.
>The employees can choose among different jurisdictions the one they want to reach.
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.
>However, the employer has no choice, pursuant to article 20, an employer may bring proceedings only in the courts of the Member State in which the employee is domiciled