The Gazette 1994

GAZETTE

PRIL

1994

The Brussels Convent i on and

Emp l oyment Agr eemen t s: Clar i f ied but

not Simpl i f i ed

by Peter Byrne*

Mulox

Geels

]

is the latest in a series

of cases in which the Court of Justice

has given decision (directly, or

indirectly

) on an application for a

preliminary ruling under the 1971

Protocol to the Brussels Convention

on the interpretation of the bearing of

the special contract jurisdiction of

Article 5, 1. of the Brussels

Convention on employment contracts.

Article 5, 1. is the most litigated

provision of the Convention

and

provides

"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;"

The difficulty of its application to

employment contracts is matched by

the commercial significance of that

jurisdiction. As will be seen from the

facts of the case, given the level of

international activity in the Irish

economy, jurisdiction in relation to

the employment contract of a person

with close Irish connections could

easily become an issue, e.g. foreign

postings and transfers of staff within a

group. Often, the legal significance of

such changes in the status of the

employee are not appreciated at the

time when they are made and legal

advice is not sought until later or, in

the worst case, only after an

employment dispute has arisen. The

Mulox

decision may not be as helpful

to the practising lawyer as appears at

first sight.

The

Mulox

case is also of interest

because it considers the effect of the

Rome Convention (on the law

applicable to contractual obligations)

and the Lugano Convention

between

the EEC and EFTA member states

parallel to the Brussels Convention.

Peter Byrne, Solicitor

Likewise, it indicates the necessity for

the jurisdiction of the Court of Justice

to uniformly interpret these

conventions as instruments of

Community law. In the

C.l.L.F.I.T.

case, Advocate General Capotorti

stressed that the specific purpose of the

Treaty of Rome, Article 177 (3), on

which the interpretation protocols are

based, is to prevent a body of national

case law not in accordance with the

rules of Community law from coming

into existence in any Member State.

Referring to arguments in favour of

restricting the scope of the obligation

on the highest national courts to refer

to the Court of Justice, e.g. to prevent

delays or increased costs in national

proceedings (in an Irish context,

similar delays and increased costs can

intervene in the form of a

constitutional challenge) he stated:

"That kind of reasoning is not, in

my opinion, conclusive. It might

be sufficient to object that the

meaning of a provision cannot

depend on reasons of expediency.

However, the reasons which

militate in favour of the opposite

view should also be borne in mind.

The requirement [of Article 177

(3)] . . . is supported by the

specific technical and formal

characteristics of Community law

. . . different language versions;

novelty of the content and

terminology of Community law. It

should be added that there are

inevitably differences between the

methods of interpretation adopted

by the Court of Justice and those

on which national courts rely,

stemming from the differences

between the legal spheres in which

the former and the latter operate."

These reasons are particularly

compelling in relation to

harmonisation measures which the

Brussels and Rome Conventions

clearly are. Indeed, they show the

necessity of a full consideration of the

arguments put and accepted or

rejected, as the case may be, by the

Court of Justice, as the point of

departure of any legal analysis of such

measures. For considerations of space,

the submissions in the

Mulox

case

cannot be considered here in detail.

Prior decisions of the Court of

Justice

Contractual

Obligation

The Court of Justice ruled in

de Bloos

Bouver

that

"the obligation to which reference

must be made for the purposes of

applying Article 5, 1. of the

Convention is that which the

contract imposes on the grantor

and the non-performance of which

is relied upon by the grantee in

support of the application for

damages or for the dissolution of

the contract . . .""'

however, in

lvenel

Schwab

specifically in relation to employment

agreements

"the obligation to be taken into

account for the purposes of

Article 5, 1. of the Convention in

149