The Gazette 1994

GAZETTE

APRIL 1994

the case of the claims based on

different obligations arising under

a contract of employment as a

representative binding a worker to

an undertaking is the obligation

which characterises the

contract."

Place of Performance

The Court of Justice ruled in

Tessili

Dunlop

that

"the 'place of performance of the

obligation in question' . . . is to be

determined in accordance with the

law which governs the obligation

in question according to the rules

of conflict of laws of the court

before which the matter is

brought."

The

Mulox

case raised the issue

whether an exception similar to that

made in

Ivenel v Schwab

should be

made, on the basis of independent

criteria to be formulated by the Court

of Justice, as regards the 'place of

performance' in relation to an

employment agreement.

Facts and issues

Geels,

a Netherlands national

domiciled at Aix-les-Bains, France,

was employed by Mulox, domiciled in

England, as its director of

international marketing with effect

from 1 November 1988. He set up

office at his home in Aix-les-Bains

and was devoted to the canvassing of

customers and the establishment of a

distribution system for Mulox

products in Belgium, Germany, the

Netherlands and Scandinavia, where

he travelled frequently. French

territory was excluded from his area

of responsibility until September

1989. From 1 January 1990, Geels

worked with Mulox agents in France

and serviced French Mulox customers.

In May 1990, Mulox informed Geels

that the fruits of his efforts were not

in proportion to costs which had been

incurred and, accordingly, it had

decided to terminate his employment

and offered him a gross termination

payment of 7 1/3 months salary.

Following the termination of his

employment, Geels sought a year's

salary in lieu of notice and general

damages before the Conseil de

prud'hommes d'Aix-les-Bains. That

court based its jurisdiction on Article

5, 1., applied French law and awarded

Geels compensation, ruling largely in

his favour.

Mulox

appealed to the Cour d'appel

de Chambéry claiming that the French

courts lacked jurisdiction, as the

employment contract was not

restricted to France, rather it applied

to the whole of Europe and Mulox had

its place of business in the UK.

Further, under English law which it

claimed the parties had chosen to be

applicable to the contract and which

was indicated by the Rome

Convention as the law of the

employer's place of establishment,

Geels was entitled to no

compensation. In the alternative,

Geel's claims were unfounded under

French law. The court referred to the

decision in

Ivenel v Schwab,

noting

that the Court of Justice considered it

preferable that such disputes were

heard before the courts of the State

whose law was applicable to the

contract. Article 6, 2., (b) of the Rome

Convention indicates as the

applicable law

"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;"

There was nothing to suggest that the

parties had chosen French law to be

applicable to the contract. If English

law was applicable (which it thought

probable), should Article 5, 1. of the

Convention, on the basis of the

Ivenel

decision, be interpreted as giving

jurisdiction to the English courts and

not to the French courts? The court

stayed its proceedings and referred the

following question to the Court of

Justice for a preliminary ruling.

"Does the ground of jurisdiction

laid down by Article 5, 1. of the

Convention require that the

obligation which characterises an

employment contract was

performed wholly on the sole

territory of the State which

establishes the jurisdiction of the

court seised of the dispute, or does

it suffice for its application that

one part, perhaps the main part, of

the obligation has been carried-out

on the territory of that State?"

(translation by the author)

Opinion of the Advocate General

In his exceptionally diaphanous

opinion, dated 26 May 1993,

Advocate General Jacobs stated that

the place of the business through

which the employee was engaged had

been clearly rejected as a basis of

jurisdiction in the

Six

case as being

unfair to the employee. The 1989

Convention amendment to Article 5,

1. took account of this decision:

"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."

Turning to the Rome Convention, he

pointed out that although the French

court regarded the Convention as

applicable to the contract between

Mulox and Geels, the contract had

obviously been concluded before 1

April 1991 on which day the

Convention entered into force in both

France and the UK. Article 17 of the

Rome Convention provides

"This Convention shall only apply

in a Contracting State to contracts

made after the date on which this

Convention has entered into force

with respect to that State."

'Place of performance' - national or

autonomous interpretation ?

Advocate General Jacobs stated

"But the grounds given by the

Court in

Tessili v Dunlop

. . . do

not seem nearly so compelling in

relation to a contract of

employment, especially if the

relevant obligation is the

obligation to perform work . . .

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