Nejvyšší soud; 2012-04-04; Mgr. S. M.; STÁTNÍ LETECKÁ SPOLEČNOST „AIR MOLDOVA“; 21 Cdo 260/2011
Decision by national courts in the field of European Union law — ECLI:CZ:NS:2012:21.CDO.260.2011.1
Date: 2012-04-04
Subject matter: Judicial cooperation in civil matters
Origin: Czechia

82012CZ0404(51)_ENG_SUMJURE
JURE summary
JURE summary
The case regards a determination of domestic and international jurisdiction by the Supreme Court of the Czech Republic in a dispute concerning a debt of unpaid wages of 1,662,687 CZK whereby the employer did not allocate work for an employee during an employment relationship.
The defendant is the national airline of the Republic of Moldova – Air Moldova. The plaintiff is a former employee of the defendant. The Court of First Instance has adhered to the request of the plaintiff and decided that the defendant has to pay all the unpaid wages plus the costs of the legal proceedings. As Moldova is not a member of the European Union and there is no international treaty between the Czech Republic and Moldova concerning employment contracts, “the applicable law is the Czech Statute No 97/1963 on the International Private Law”. As the plaintiff is a citizen of the Czech Republic, has his habitual residence in the Czech Republic and the work performed by the defendant was in the Czech Republic, Czech courts have the jurisdiction to decide the case. The court applied the Czech Code of Labour stating that if the abolition of the employment relationship was invalid and yet the defendant as an employer did not assign work tasks to the plaintiff, it is a breach of the contract by the defendant and the plaintiff has a lawful claim to receive his average wage for the whole duration of inactivity of the employer.
The Court of Second Instance confirmed the decision and also added, that in case of an absence of the international treaty concerning employment disputes between the Czech Republic and Moldova, the Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I Regulation”) applies, which in the Articles 18(1), 18(2), 19(1), 21(1) and 21(2) sets the jurisdiction of courts of Member States of the European Union in cases with foreign entities. Employment law disputes fall within the scope of this Regulation. From the above-mentioned provisions, it is clear that “Czech Courts have the jurisdiction to decide the dispute concerning wage compensation between the employee (plaintiff) and the employer (defendant), who resides (through the Czech division of the company) in the Czech Republic.
It is not possible to apply an agreement of the parties from the contract of employment providing a jurisdiction in accordance with the Article 21 of the Brussels I Regulation as the agreement was not entered after the dispute has arisen, nor does it allow the employee to bring proceedings in courts other than those indicated in Section 5 of the Brussels I Regulation. Besides that, the jurisdiction of the Czech courts would even apply based on Article 21 of the Brussels I Regulation as the defendant has not objected to the lack of jurisdiction of the Czech court while entering an appearance, but did so later in the proceedings.
The defendant filed a cassation request to the Supreme Court of the Czech Republic arguing that the contract of employment was not entered into by the plaintiff and the defendant’s division in the Czech Republic, but by the plaintiff and the parent company residing in the Moldova and therefore the Article 18 of the Brussels I Regulation cannot be applied. The Supreme Court’s reasoning is that Article 18(2) provides that if an employer who is not domiciled in a Member State but has a branch, agency or another establishment in one of the Member States, then in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State. That means that even though the defendant is a foreign legal person without residence in the Czech Republic, it is, while determining the international jurisdiction of the Czech courts, vital that the defendant has a division in the Czech Republic. The Supreme Court confirmed all of the reasoning of the Court of Second Instance concerning an application of Articles 21 and 24 of the Brussels I Regulation.
The Supreme Court dismissed the case and rejected the defendant’s cassation.