There’s no place like home! Jurisdiction clauses within employment agreements. | Malta Corporate Services Provider | CSB Group

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There’s no place like home! Jurisdiction clauses within employment agreements.

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The European Court of Justice (ECJ) on 14th September 2017 has ruled in favour of Ryanair staff in relation to a clause found in their contracts of employment. This jurisdiction clause was inserted in order to set Irish law as the applicable law of the agreements and any pursuant litigation which occurred. These clauses thus prevented Ryanair employees not based in Ireland from bringing proceedings in the courts of the countries in which they habitually resided.

The action was filed by a group of cabin crew employees working for Ryanair. These six employees enjoyed standard employment contracts which stated that Irish law applied to their agreements since their duties were performed on an aircraft which was registered in Ireland. The employees brought a group action to the Belgian Cour du travail de Mons which was not sure whether it was competent to precede over the case due to the jurisdiction clause. The question was referred to the ECJ.

The ECJ stated that rather than the plane itself, an employee’s home base should be considered as being a “significant indicator” as to where the employee habitually carries out his functions.  The fact that the employees had to live a maximum of one hour away from their home base airport, and started and finished their working duties at the same home base every time, contributed to this assertion.

After discussing this issue, the ECJ based its deliberations upon Brussels 1[1]. The ECJ stated that EU laws concerning jurisdictional issues are always aimed at protecting the weaker party, who in this case is the employee. This was reiterated in order to show that any agreement could not override the fundamental principles of an EU regulation. The employee would have the right to sue his employer in the courts which he regards as being closest to his interests, as is portrayed by options given to the employee to bring an action in his employer’s domicile or the jurisdiction where the employee habitually carries out his work.

Although Ryanair is stating that this will not affect the formation of any future contractual agreements with its employees, since employees may still be contracted under Irish law, it is important to note that this case has created a solid foundation for future cases to be built upon. Due to this decision, it is therefore evident that multinational employers may not be able to rely on jurisdiction clauses within their employment agreements as these will not be enforceable.

 

[1] Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters

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