Opinion of the European Economic and Social Committee on the "Initiative of the Kingdom of the Netherlands with a view to the adoption of a Council Regulation amending Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters"
Date: 2003-10-29
Institutions: European Economic and Social Committee
Subjects: ESC opinion, EU Member State, EU national, civil law, commercial law, jurisdiction, mutual recognition principle

C 32/88

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Official Journal of the European Union

5.2.2004

Opinion of the European Economic and Social Committee on the ‘Initiative of the Kingdom of
the Netherlands with a view to the adoption of a Council Regulation amending Regulation (EC)
No 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and
commercial matters’ (1)

(2004/C 32/18)

On 27 November 2002 the Council decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 7 October 2003. The rapporteur was
Mr Retureau.

At its 403rd plenary session of 29 and 30 October 2003 (meeting of 29 October) the European Economic
and Social Committee adopted the following opinion by 63 votes to 11 with 7 abstentions.

1. The legislative proposal

The proposal is an initiative of the Kingdom of the
1.1.
Netherlands (1) amending a provision of Regulation (EC) No
44/2001 on jurisdiction and the recognition and enforcement
of judgments in civil and commercial matters (the Regulation),
which entered into force on 1 March 2002 and which contains
implementing provisions for the Brussels I Convention (the
Convention) on the same subject. This convention will con-
tinue in force in the Kingdom of Denmark, however. Moreover,
the Lugano Convention (1988) will continue in force in certain
non-EU countries.

1.1.1.
The proposed amendment would insert a derogation
clause into the Regulation with regard to jurisdiction for
contracts for cross-border work.

1.1.2.
Its legal basis is Articles 61(c) and 67(1) of the EC
Treaty. These articles, together with Article 65, to which
Article 61 refers, deal with the powers of the Council and with
the right of initiative of its members with regard to jurisdiction
and the recognition and enforcement of judgements in civil
and commercial matters. For a period of five years from the
entry into force of the EC Treaty, as amended at Amsterdam,
the Member States have the same right of initiative as the
Commission, but with the entry into force of the Treaty of
Nice the Commission’s right of initiative will become exclusive
and the members of the Council will retain only the right to
ask the Commission to make proposals.

1.2.
Article 20 of the Regulation reflects the rules on
jurisdiction laid down in relation to proceedings connected
with contracts of employment brought by an employer against
an employee resident in another Member State. In principle,
jurisdiction in such cases lies with the courts of the employee’s
home country.

(1) OJ C 311, 14.12.2002, p. 16.

1.2.1.
This is a general and binding rule of assignment of
jurisdiction which applies to any proceedings brought under
the Regulation, but there is provision for a number of limited
exceptions.

1.3.
The proposed amendment would change this rule of
jurisdiction for proceedings brought by an employer for
judicial annulment of a contract of employment, where the
court is asked to rule on the annulment and its consequences
(e.g. monetary). Judicial annulment is a procedure apparently
allowed in some Member States, and the authors of the
proposal maintain that in the Netherlands it is even mandatory
in the case of certain protected workers.

The proposed amendment would give the employer
1.3.1.
the option to bring his proceedings in the courts of the country
where the employee habitually carries out his work, and not
necessarily, as would otherwise be required, in the courts of
the employee’s home country. This unilateral option would, it
is suggested, offer advantages for both parties.

2. General comments

The proposal does indeed offer the employer a new
2.1.
advantage by allowing him to choose to bring his action before
the courts of the country in which the contract is carried out a
rather than those of
the defendant’s home country, and
would thus deprive the defendant of his right to choose the
jurisdiction (the defendant’s country of residence, his country
of employment or the employer’s country of establishment).

This would be an exception to the principles of
2.2.
jurisdiction which would appear to have been firmly estab-
lished in the Regulation, the aim of which is to protect the
weaker party to certain contracts which are unequal
in
economic terms or in terms of technical or professional

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competence (employer/employee, supplier/consumer, insurer/
insured). The Committee endorsed the Regulation in its
opinion of 1 March 2000 (1).

2.3.
Although social security is by definition explicitly
excluded from the field of application of the Brussels Conven-
tion and of the Regulation referred to, labour law is however
covered, despite difficulties in regarding it as a branch of
private law.

2.3.1.
This situation arose originally from the case law of
the Court of Justice, which was responsible for interpreting the
Convention, and which ruled that contracts of employment
were implicitly covered (the first version of the Convention
the
made no mention of
Convention employment contracts have been included in their
entirety.

them). After two revisions of

2.3.2.
All the exceptions to the common law on contracts
and to jurisdiction for employment contracts result logically
from the fact that labour law is a very specific field.

2.3.3.
Indeed, labour law is strongly influenced by a number
of public policy provisions. In most Member States employees
and their representatives are protected through the involve-
ment of the authorities in conditions of training, implemen-
tation and termination of contracts (labour inspectorate,
regulation of certain contractual provisions, obligatory and
prohibited clauses, special protection for certain categories of
employee, regulation of working conditions and contracts by
sector, either by legislative means or via national or regional
sectoral collective agreements) and through various other
exceptions to the principle of contractual freedom.

2.3.4.
Contracts of employment have in the past been
excluded from efforts to establish European contract law, as
they are considered to be too much bound up with the social
and legal traditions of individual countries and too much
subject to public policy criteria and legal and other factors.
The situation will become even more complex and diverse
with enlargement of the Union.

A large body of Community labour law continues to
2.3.5.
develop, which has an impact on the content of contracts of
employment, the aim being to promote harmonisation in the
interests of labour mobility in the single market, the principle
of equality and a high level of protection for workers.

(1) OJ C 117, 26.6.2000.

An option for an employer to have his employee’s
2.4.
contract of employment annulled by a court is exceptional in
most European countries, where it may either not be allowed
under national law or be an exceptional procedure, and there
is every reason to question the appropriateness of changing
such a fundamental provision of the Regulation to accommo-
date such an apparently uncommon procedure.

2.4.1.
Although in principle private or commercial con-
tracts may be judicially annulled, if one of the parties considers
that the other has not fulfilled his contractual obligations or if
the dispute is not settled out of court, this is far from frequent
in the case of contracts of employment. Contracts are usually
terminated at a predetermined date, in the case of fixed-term
contracts, or at the request of one of the parties, subject to
compliance with the applicable clauses and rules, or, in the
event of a serious fault by one of the parties, on the initiative
of the other party, possibly with the involvement of the court
in the event of disagreement on the reason for, or the monetary
consequences of, termination of the contract.

Judicial annulment is resorted to exceptionally in the
2.4.2.
absence of one of
the usual conditions for breaking or
terminating a contract, e.g. a direct dismissal procedure which
can be initiated by the employer for economic reasons or
where the employee is at fault. The dismissal of certain
protected workers is subject to specific rules which apply
during the period of protection, and these vary from one
country to another. An arrangement whereby a worker can be
dismissed only by a tribunal of representatives of protected
workers seems to exist only in a limited number of countries.
Only the Netherlands is mentioned in the proposal.

2.5.
The rules on jurisdiction of the Regulation require the
plaintiff to bring proceedings before the competent court of
the defendant’s home country. Clauses assigning jurisdiction
are not in principle allowed in contracts of employment. A
clause of this kind might be allowed only with the common
consent of the parties after a dispute has arisen and a procedure
for termination of a contract has been initiated. It might,
however, be permissible to include such a clause in a contract
under certain conditions, e.g. if the employee were resident in
a third country.

2.5.1.
Once a decision has been taken to bring proceedings
for judicial annulment of a contract, the employer is free to
negotiate with the employee so as to reach agreement on
jurisdiction under the conditions set out in the Regulation, and
there is no obstacle to such an agreement
it appears
favourable to both parties under certain circumstances, e.g. in
the case of cross-border employment contracts.

if

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But the proposal submitted to the Council would allow
2.6.
an employer to choose the jurisdiction, which could have
serious consequences for an employee against whom an action
for judicial annulment has been brought, who must be able to
submit and conduct his defence against the plaintiff under the
best possible conditions. The proposal would introduce a
significant exception to the general procedural principles of
the Regulation and might be prejudicial to the rights of the
defence,
if an employee did not wish to accept a clause
assigning jurisdiction after a dispute had arisen to the courts
of his country of employment or of the country in which the
contract was concluded, but preferred that jurisdiction be
assigned to the courts of his place of residence, where this was
situated in a Member State subject to the provisions of the
Regulation.

2.7.
Only where the defendant is not resident in a country
which is a party to the Regulation, and in the absence of a
clause assigning jurisdiction, may the employer’s national
court legally exercise jurisdiction and apply the rules of its
system of domestic law.

The Committee therefore considers that, under these
2.8.
circumstances, there is no compelling reason to make general
provision for an exception to the exclusive benefit of one of
the parties in an area where the Regulation lays down a general
principle, although allowing an exception to be made by
common consent once a dispute has arisen. This provision
already takes account of situations where the exercise of
jurisdiction by the courts of the country in which the contract
is applied could be mutually beneficial to the interests of both
parties.

Brussels, 29 October 2003.

2.9. With regard to the mobility of labour within the single
market, the Committee considers that,
if accepted by the
legislative authorities, the proposal:

a) would bring about the recognition and implementation
in the other Member States of a decision arising from a
procedure which is relatively uncommon in labour law,
even in those countries where it is allowed;

b)

c)

could be prejudicial to the rights of the defence and to
the general principles protecting the weaker party to
certain contracts;

could conflict with public policy in certain countries, e.g.
if the employees in question were protected, or if the
reasons for the dismissal were essentially unacceptable
and the decision could therefore be neither recognised
nor implemented in those countries, under the clause of
the Convention allowing a state to oppose suspension of
its public policy arrangements for the implementation of
a foreign judgment;

d) would inhibit the courts of other Member States and their
competence in, and ability to apply, contract law, which
is one of the reasons quoted in defence of the proposal.

3. Conclusion

In the Committee’s view, the proposal of the Kingdom of the
Netherlands should not be adopted for reasons connected with
legal certainty and compliance with a general procedural
principle.

The President

of the European Economic and Social Committee

Roger BRIESCH

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APPENDIX

to the opinion of the European Economic and Social Committee

The following amendment, which was defeated, received at least one quarter of the votes cast:

Point 3

Delete and replace by the following:

‘The initiative by the Kingdom of the Netherlands is inadmissible as it no longer has any legal basis under the EC
Treaty. The Committee recommends that the Commission review the substantive elements of this case, taking
account of the Committee’s comments above.’

Reason

The Treaty of Nice that has now entered into force introduced a fifth paragraph into Article 67 of the EC Treaty
abrogating the right of initiative granted to Member States for a five-year transitional period following the entry into
force of the Maastricht Treaty. Thus, the Dutch initiative has no legal basis and is therefore inadmissible.

The Committee’s comments should be passed onto the Commission for substantive consideration.

Result of the vote

For: 21, against: 54, abstentions: 2.