61995CC0383_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1 The Netherlands Hoge Raad (Supreme Court) has asked for a preliminary ruling on the interpretation of Article 5(1) of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (hereafter `the Brussels Convention'), as amended by the Convention of 9 October 1978 on the accession of Denmark, Ireland and the United Kingdom, (1) by the Convention of 25 October 1982 on the accession of the Hellenic Republic (2) and by the Convention of 26 May 1989 on the accession of the Kingdom of Spain and the Portuguese Republic (`the San Sebastian Convention'). (3)
2 Article 5(1) of the Brussels Convention, in so far as relevant to this case, essentially confers jurisdiction in disputes arising out of employment contracts on, inter alia, the courts of the place where the employee habitually carries out his work.
Background
3 Mr Rutten, a Netherlands national resident in the Netherlands, was employed from 1 August 1989 by Cross Medical BV, a Netherlands subsidiary of Cross Medical Ltd, a company incorporated in Great Britain and established in London.
His contract of employment contained clauses conferring jurisdiction in the event of employment disputes on the Amsterdam Kantonrechter (Cantonal Court) and stipulating that the contract was to be governed by Netherlands law.
On 31 May 1990 Mr Rutten's employment with Cross Medical BV was terminated because of that company's financial difficulties and he entered into a new contract of employment with Cross Medical Ltd.
That contract surprisingly contained neither a choice of law clause nor a submission to jurisdiction clause.
4 Mr Rutten continued to live in the Netherlands.
Both before and after his change of employer, he carried out some two-thirds of his work in the Netherlands;
the remaining third appears to have been spent in several other countries (there is slight divergence between the documents on the file, but England, Scotland, Ireland, the United States, Germany and Belgium are variously mentioned).
He carried out the preparation and planning for his trips in his Netherlands office (which appears to have been in his house), where he kept all relevant documentation and where he returned after every trip.
5 Mr Rutten's employment was terminated by Cross Medical Ltd with effect from 1 October 1991.
He sought payment of arrears of salary and interest before the Amsterdam Kantonrechter.
Cross Medical Ltd contests the jurisdiction of the Netherlands courts, arguing that Rutten habitually carried out his work in the United Kingdom.
The Kantonrechter declared that it had jurisdiction to hear and determine the claim;
on appeal on the issue of jurisdiction, the Rechtbank (District Court), Amsterdam, set aside the judgment of the Kantonrechter.
Mr Rutten appealed in cassation to the Netherlands Hoge Raad, which referred the following questions to the Court:
`(a) Where, in the performance of an employment contract, an employee carries out his work in more than one country, what are the criteria according to which he should be regarded as habitually carrying out his work in one of those countries, within the meaning of Article 5(1) of the Brussels Convention?
(b) Is the fact that he spends most of his working time in one of those countries, or the fact that he spends more of his working time in another country or countries, decisive or significant in that regard?
(c) Is the fact that the employee resides in one of those countries and maintains there an office where he prepares or administers his work outside that country, and to which he returns after every trip which he makes in connection with his work, significant in that regard?'
Article 5(1) of the Brussels Convention
6 Article 5(1) represents one of the exceptions to the general rule set out in Article 2, namely that persons domiciled in a Contracting State are to be sued in the courts of that State.
Those exceptions are justified by the fact that, as stated in the Jenard Report on the Convention, `there must be a close connecting factor between the dispute and the court with jurisdiction to resolve it'. (4)
7 Until 1989, Article 5(1) read as follows:
`A person domiciled in a Contracting State may, in another Contracting State, be sued:
1. in matters relating to a contract, in the courts for the place of performance of the obligation in question;
...' (5)
8 The San Sebastian Convention amended Article 5(1) so that it reads as follows:
`A person domiciled in a Contracting State may, in another Contracting State, be sued:
1. in matters relating to a contract, in the courts for the place of performance of the obligation in question;
in matters relating to individual contracts of employment, this place is that where the employee habitually carries out his work, or if the employee does not habitually carry out his work in any one country, the employer may also be sued in the courts for the place where the business which engaged the employee was or is now situated;
...'
9 What is at issue in this case is the meaning of the words `[the place] where the employee habitually carries out his work'.
The identification of that place in a specific case is a question of fact to be determined by the national court, and the Court has been asked in particular to give guidance as to the factors which may be relevant to that determination in circumstances where the employee works in more than one country.
10 The Court has not yet had occasion to rule on the meaning of the above terms.
In the absence of any judicial guidance, I will briefly review the history of the provision.
A fuller discussion of the background may be found in my Opinion in Mulox IBC v Geels. (6)
11 The amendment made to Article 5(1) by the San Sebastian Convention is discussed in the Report on that convention by Almeida Cruz, Desantes Real and Jenard. (7)
It is stated that the solution adopted `attempts to improve on that adopted by the Lugano Convention (8) without departing from it too greatly, while following the guidelines laid down by the Court of Justice on the protection of the weaker party in the contractual relationship'. (9)
The Report refers in particular to the decision of the Court of Justice in Six Constructions v Humbert, (10) delivered after signature of the Lugano Convention but before finalization of the San Sebastian Convention.
12 The relevant provision in the Lugano Convention, also Article 5(1), reads as follows:
`A person domiciled in a Contracting State may, in another Contracting State, be sued:
1. in matters relating to a contract, in the courts for the place of performance of the obligation in question;
in matters relating to individual contracts of employment, this place is that where the employee habitually carries out his work, or if the employee does not habitually carry out his work in any one country, this place shall be the place of business through which he was engaged;
...'
13 The only difference between the wording of Article 5(1) of the Lugano Convention and Article 5(1) of the Brussels Convention as amended by the San Sebastian Convention is that it is made clear in the latter that the option (where the employee does not habitually carry out his work in any one country) of suing in the place of business of engagement is available only to the employee.
That is the improvement referred to in the Report on the San Sebastian Convention, intended to reflect the concern to protect the socially weaker party to the contract.
It was prompted by Six Constructions, in which the Court pointed out that the wording of the Lugano Convention could work against the interests of the socially weaker party to the employment contract by conferring jurisdiction on the courts for the place where the employer is located even where the employer is the plaintiff. (11)
14 Article 5(1) of the Lugano Convention was apparently intended to reflect the decisions of the Court of Justice in Ivenel v Schwab (12) and Shenavai v Kreischer (13) (see the Report on the San Sebastian Convention, paragraph 23(a)) and also to be consistent with the Rome Convention on the law applicable to contractual obligations (14) (see the Jenard-Möller Report on the Lugano Convention, (15) paragraphs 37 to 40).
15 In the absence of any specific provision for contracts of employment in the pre-1989 versions of the Brussels Convention, the Court had ruled in Ivenel v Schwab that the obligation to be taken into account for the purposes of Article 5(1) in the case of claims based on different obligations arising under a contract of employment was the obligation which characterized the contract, which was normally the obligation to carry out work. (16)
In Shenavai v Kreischer the Court had stated obiter that, in the case of a dispute concerned with a number of obligations arising under the same contract and forming the basis of the proceedings in question, the court before which the matter was brought should, when determining whether it had jurisdiction, be guided by the maxim accessorium sequitur principale:
in other words, where various obligations are at issue, it will be the principal obligation which will determine its jurisdiction. (17) Those two propositions, together with Article 6(2) of the Rome Convention, are the source of the reference in Article 5(1) of the Lugano Convention (and hence also of that in Article 5(1) of the Brussels Convention) to the place `where the employee habitually carries out his work'.
16 Article 6(2) of the Rome Convention provides that, in the absence of choice of law, a contract of employment is to be governed:
`(a) by the law of the country in which the employee habitually carries out his work in performance of the contract, even if he is temporarily employed in another country;
or
(b) if the employee does not habitually carry out his work in any one country, by the law of the country in which the place of business through which he was engaged is situated;
unless it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract shall be governed by the law of that country'.
17 It is clear from the Giuliano-Lagarde Report on the Rome Convention (18) that the wording of Article 6 took account of the fact that the interests of the parties to an employment contract differ and sought to secure `more adequate protection for the party who from the socio-economic point of view is regarded as the weaker in the contractual relationship'. (19)
18 That the concern to afford proper protection to the party to the contract who is the weaker from the social point of view is a factor to be taken into account in interpreting Article 5(1) of the Brussels Convention was confirmed by the Court of Justice in Ivenel v Schwab, in relation to the pre-1989 version of the article. (20)
The Court in that case additionally stated, after reviewing the legislative history of the provision, that in the matter of contracts Article 5(1) was particularly concerned to attribute jurisdiction to the court of the country which had a close connection with the case, and that in the case of a contract of employment the connection lay particularly in the law applicable to the contract. (21)
I will revert to these points later.
The Mulox case
19 The pre-1989 version of Article 5(1) came before the Court again in Mulox IBC v Geels, (22) a case where the employee performed his work in more than one Contracting State.
In my view, the Court's ruling, although concerned with the earlier wording, is none the less helpful in interpreting the present wording.
This is because the Court interpreted the pre-1989 version in the light of its decisions in Ivenel v Schwab and Shenavai v Kreischer;
as has been seen, it was those decisions which largely shaped the 1989 amendment currently before the Court.
20 The Court ruled that, in the case of a contract of employment, it was appropriate to determine the place of performance of the relevant obligation, for the purposes of applying Article 5(1) of the Convention, by reference not to the applicable national law in accordance with the conflict rules of the court seised but, rather, to uniform criteria which it was for the Court to lay down on the basis of the scheme and the objectives of the Convention. (23)
21 The Court moreover referred to its statement in Ivenel v Schwab that account must be taken of the concern to afford proper protection to the party to the contract who is the weaker from the social point of view, namely in these cases the employee.
Proper protection of that kind is best assured if disputes relating to a contract of employment fall within the jurisdiction of the courts of the place where the employee discharges his obligations towards his employer.
That is the place where it is least expensive for the employee to commence, or defend himself against, court proceedings. (24)
22 That proposition echoes the view I expressed in my Opinion in that case that the worker should be entitled to sue his employer at the place where he works:
that is the natural forum for such disputes and it will in most cases be the most convenient forum for the employee, who should not be deprived of the convenience of suing there simply because his employer is domiciled in another Contracting State. (25)
23 The Court in Mulox referred to earlier case-law (set out above) (26) holding that, where various obligations derive from the same contract and form the basis of the plaintiff's action, it is the principal obligation which must be relied on in order to determine jurisdiction. (27) The Court then stated that, where the work was performed in more than one Contracting State, the place of performance of the contractual obligation within the meaning of Article 5(1) was the place where or from which the employee principally discharged his obligations towards his employer.
In order to determine the place of performance, which was a matter for the national court, it was necessary to take account of the fact that, in that case, the work entrusted to the employee was carried out from an office in a Contracting State, where the employee had established his residence, from which he performed his work and to which he returned after each business trip. (28)
Application to the present case
24 The issue before the Court in this case is essentially whether the wording of Article 5(1) of the Brussels Convention as amended by the San Sebastian Convention, and in particular the words `[the place] where the employee habitually carries out his work', differs to any significant extent from the Court's interpretation of the unamended provision in Mulox, and in particular the concept `the place where or from which the employee principally discharges his obligations towards his employer';
and if so whether that difference warrants departing from the guidelines laid down by the Court in Mulox for determining where that place is in a specific case.
25 I remain of the view which I expressed in my Opinion in Mulox, to the effect that the pre-1989 version of Article 5(1):
`should be construed as establishing jurisdiction at the principal place of employment.
That term will in most situations be largely synonymous with the concept of the "habitual" place of employment used in Article 6 of the Rome Convention and in the Lugano and San Sebastian Conventions.
However, the expression "principal place of employment" seems preferable, since it more effectively conveys the idea that one of the worker's several places of employment must in normal circumstances be more important than the others. ... if the San Sebastian Convention were applicable in a case such as the present one, the term "habitually" should not be construed too literally but should be read as indicating the principal place of employment.' (29)
26 That interpretation accords with a number of factors.
27 First, it affords protection to the party to the contract who is weaker from a social point of view, namely in employment contracts the employee:
as has been seen, the concern to ensure such protection has been recognized by the Court and coloured the 1989 amendment to Article 5(1).
28 Secondly, it reflects the requirement of a close connecting factor between the dispute and the court with jurisdiction to resolve it.
29 Thirdly, it should mean that the courts with jurisdiction will almost invariably be at the place where it is least expensive for the employee to commence, or defend himself against, court proceedings.
30 Against that interpretation it might be argued that it will not necessarily confer jurisdiction on courts of the country whose law is applicable.
As stated above, the desirability of conferring jurisdiction on a court which will be able to apply its own law, rather than a foreign law, was mentioned by the Court in Ivenel v Schwab as one of the principal criteria governing the interpretation of Article 5(1).
31 I do not however think that that objection is sufficient to override the advantages of the interpretation I propose. As I stated in my Opinion in Mulox, desirable though it may be to confer jurisdiction over employment disputes on the courts of the country whose law is applicable, that will not always be possible in practice, even after the harmonization of the choice-of-law rules effected by the Rome Convention. (30)
In that Opinion I discussed in some depth the difficulties inherent in any attempt to ensure coincidence of lex causae and lex fori, and concluded that it would be a mistake to exaggerate the importance of the link between jurisdiction and lex causae in employment disputes. (31)
I remain of that view.
32 Where, therefore, in the performance of an employment contract, an employee carries out his work in more than one country, the criteria according to which he should be regarded as habitually carrying out his work in one of those countries within the meaning of Article 5(1) of the Brussels Convention are essentially the same as the criteria according to which he would formerly have been regarded as principally discharging his obligations towards his employer.
The Court in Mulox has already suggested some of those criteria:
in particular the location of the employee's office in a Contracting State, where he had established his residence, from which he performed his work and to which he returned after each business trip. (32)
33 The Commission, although it endorses the view I expressed in my Opinion in Mulox that the term `habitually' should not be interpreted too literally, sees difficulties in simply equating the meaning of `habitually' and `principally'.
It submits that the first concept refers rather to the temporal organization of the employee's work whereas the second refers to the central point of the work. However, it then states that the term `principally' implies, as shown by the judgment in Mulox, (33) that in relation to the previous version of Article 5(1) various criteria should be taken into account, including the time spent in each of the countries concerned.
The new wording, and in particular the use of the word `habitually', confirms that latter criterion.
The Commission concludes that the national court must therefore first establish the periods during which the employee worked in the various different countries.
If a clear majority of days were spent in one Contracting State, it is the courts of that State which in principle have jurisdiction to hear disputes arising out of the contract of employment.
34 Although that reasoning will in all probability lead to the correct result in the majority of cases, I am not convinced of the wisdom of such a wide formulation.
I remain of the view which I expressed in my Opinion in Mulox that the location and use made of the employee's office cannot be overlooked.
In that case, I stated that, even if the employee spent more than half of the year travelling in other countries and did not in fact visit a single client in the country in which he had his office, it seemed to me very difficult to rebut the presumption that his principal place of employment was located at the place where he had his centre of operations. (34)
I do not consider that that proposition has been made less cogent by the new wording of Article 5(1).
If an employee who travels to several different countries prepares and plans his work from his office and returns there after every trip, it is artificial to regard him as `habitually' or `principally' carrying out his work in any country other than that where he has his office, the hub of his working activities.
35 The Commission adds that other factors, such as location of office and residence, are also significant.
It draws a distinction as to the weight to be attached to those factors depending on whether the criterion of time points to the same or a different place as the other factors. This seems to me to be unnecessarily complex in the context of this case, where it is clear that there is no such difficulty.
It also shows the dangers of attaching too much weight to the criterion of time and too little to the location of the employee's centre of operations.
36 As to the criterion of residence, I would merely comment that, although it may be a relevant factor in the circumstances of a particular case, for the reasons given in my Opinion in Mulox (35) I do not consider that it should be decisive.
37 I would stress the importance in any case involving an employee who works in several different countries of making a determined effort to identify a principal place of employment, in order to ensure that jurisdiction is conferred on the courts of a country which has a genuine connection with the dispute. (36)
That result will not necessarily be achieved if recourse is had to the substitute connecting factor introduced by the San Sebastian Convention, namely the place where the business which engaged the employee was or is situated.
Other than to draw attention to the risk, however, I do not consider that it is necessary for the purposes of this case to analyse the scope of that substitute connecting factor.
38 To conclude, therefore, I consider that the additional factors mentioned in the national court's questions are all relevant criteria for determining where the employee habitually carries out his work.
39 It may finally be noted that the main proceedings in this case provide a good illustration of the advantages of the interpretation of Article 5(1) which I advocate.
Mr Rutten is resident in the Netherlands.
He has an office in the Netherlands from which he plans and prepares his work and to which he returns after each trip, and he spends some two-thirds of his working time in the Netherlands, the remaining third being divided between several other countries.
Clearly the employment dispute at issue has numerous close connecting factors with the Netherlands. For Mr Rutten to be compelled to bring his action before a court in the United Kingdom would be consistent neither with the general concern to protect the socially weaker party nor with the specific application of that concern in such cases, namely the aim of ensuring that the employee may bring proceedings in the forum most convenient to him.
Conclusion
40 Accordingly, I am of the opinion that the Court should give the following reply to the questions put by the Hoge Raad:
For the purposes of Article 5(1) of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, as most recently amended by the Convention of 26 May 1989 on the accession of the Kingdom of Spain and the Republic of Portugal, the place where an employee habitually carries out his work means, in the case of a contract of employment in pursuance of which the employee performs his work in more than one State, the place where or from which the employee principally discharges his obligations towards his employer.
It is for the national court to determine that place in the light of all the relevant facts, which include in particular the fact that the employee spends most of his working time in one of those States where he resides and maintains an office from which he prepares or administers his work outside that State and to which he returns after every trip which he makes in connection with his work.
(1) - OJ 1978 L 304, p. 77.
(2) - OJ 1982 L 388, p. 1.
(3) - OJ 1989 L 285, p. 1.
(4) - OJ 1979 C 59, p. 1, at p. 22.
(5) - The wording of the original 1968 version was marginally different, but to substantially the same effect; the version cited is that amended by the 1978 Accession Convention.
(6) - Case C-125/92 [1993] ECR I-4075.
(7) - OJ 1990 C 189, p. 35.
(8) - Convention of 16 September 1988 on jurisdiction and the enforcement of judgments in civil and commercial matters (applicable between the Member States of EFTA and the EEC);
OJ 1988 L 319, p. 9.
(9) - Paragraph 23(c).
(10) - Case 32/88 [1989] ECR 341.
(11) - See paragraphs 13 and 14 of the judgment.
(12) - Case 133/81 [1982] ECR 1891.
(13) - Case 266/85 [1987] ECR 239.
(14) - OJ 1980 L 266, p. 1.
(15) - OJ 1990 C 189, p. 57.
(16) - Paragraphs 15 and 20 and operative part of the judgment.
(17) - Paragraph 19 of the judgment.
(18) - OJ 1980 C 282, p. 1.
(19) - P. 25.
(20) - Paragraphs 16 and 17 of the judgment.
(21) - Paragraph 15 of the judgment.
(22) - Cited in note 6.
(23) - Paragraph 16 of the judgment.
(24) - Paragraphs 18 and 19 of the judgment in Mulox.
(25) - Paragraph 29 of my Opinion.
(26) - Paragraph 15.
(27) - Case 266/85, cited in note 13, paragraph 19 of the judgment.
(28) - Paragraphs 22 to 25 of the judgment.
(29) - Paragraphs 32 and 37.
(30) - Paragraph 27 of my Opinion.
(31) - See paragraphs 27 and 28.
(32) - Paragraph 25 of the judgment.
(33) - The Commission is considering the French and Dutch texts of the judgment, which use the term `principalement' and `hoofdzakelijk' respectively.
(34) - Paragraph 33.
(35) - Paragraph 34.
(36) - See further my Opinion in Mulox, paragraphs 35 and 37.