PRIVATE INTERNATIONAL LAW

Individual Employment Contracts in Rome I convetion (Article 8)

TAYFUN IRMAK10/12/2012

WHAT IS INSIDE OF THIS PRESENTATİON?

What is the individual employment contract?

What is the individual employment contract in Rome I convention?

Consequences of Article 8 of Rome I convention

A. WHAT İS THE İNDİVİDUAL EMPLOYMENT CONTRACT?

Basically employment contract is this : ‘The contracts are established between employee who is carrying out the job and employer who is paying the salary for labor.’

The contract exists as a result of bargaining and consensus of employee and employer.

Some contracts definitions in different countries:o in Turkish labour act:

‘Employment contract is an agreement whereby one party (the employee) undertakes to perform work in subordination to the other party (the employer) who undertakes to pay him remuneration’ in Slovenia ERA:‘Employment relationship is entered into by employment contract.(2) The rights and obligations related to the performance of work in the framework of the employment relationship and the registration to social insurance schemes shall begin to be exercised on the day of commencement of work agreed in the employment contract…’ in Swiss labour act:‘An employment contract exists once two people reach an agreement according to which one person will carry out work in return for a salary from the other.’

1) WHAT MAKES THE CONTRACT AN EMPLOYMENT CONTRACT?

Basically we need three elements to make employment contract;

Worker to carry out the job

Employer To pay salary for labor

Consensus to exist contract

2) WHAT SHOULD THE EMPLOYMENT CONTRACT CONTAİN?

data on the contracting parties including their residence or registered office

date of commencement of work title of the position or type of work place where the work is to be carried out the duration of the employment contract and the manner of taking

annual leave stipulation stating whether the employment contract is for part or

full-time work stipulation on normal daily or weekly working time and the

organisation of working time stipulation on other components of the worker's wage, payment

period, payment day and manner of payment of the wage Stipulation terminating the contract

3) RİGHTS AND OBLİGAİTONS İN THE EMPLOYMENT CONTRACT

Carrying out Work: This obligation is for the workers. They must carry out the work under the employment contract’s stipulations.

Obligation to Protect Business Secrets: A worker cannot reveal the business secrets. If he/she lets the secrets be known by other third persons, the employee shall be liable of these consequences.

Obligation of Remuneration: This obligation is for employers. They have to pay to employees for their labor.

Obligation to Provide Safe Working Conditions: This obligation is also for employers. And this includes safety and healthy working area, equipments which are appropriate to use them on the work and so on.

Obligation to Protect the Worker's Personality: Employers should respect and save the employee’s personality. Keeping secret the worker’s personal information and being respectful to worker’s dignity are included in this obligation as well.

B. WHAT IS THE INDIVIDUAL EMPLOYMENT CONTRACT IN ROME I

CONVENTION? Article 8 of Rome I Individual employment contracts 1. An individual employment contract shall be governed by the law chosen by the

parties in accordance with Article 3. Such a choice of law may not, however, have the result of depriving the employee of the protection afforded to him by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable pursuant to paragraphs 2, 3 and 4 of this Article.

2. To the extent that the law applicable to the individual employment contract has not been chosen by the parties, the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract. The country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country.

3. Where the law applicable cannot be determined pursuant to paragraph 2, the contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated.

4. Where it appears from the circumstances as a whole that the contract is more closely connected with a country other than that indicated in paragraphs 2 or 3, the law of that other country shall apply.

The Rome I convention is all about the ‘Applicable law to contractual obligations in EU’ and the article 8 is about the applicable law on employment contracts.

The article 8 defines how can we make an employment contract (first intent of the article 8) and how can we choose the applicable law for any conflict on the individual employment contract (second, third and fourth intents of the article 8).

First paragraph of the article 8: ‘An individual employment contract shall be governed by the law chosen by the parties in accordance with Article 3. Such a choice of law may not, however, have the result of depriving the employee of the protection afforded to him by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable pursuant to paragraphs 2, 3 and 4 of this Article.’ First sentence of this provision is implicitly saying about how to make a contract. The provision refers to article 3 of the same convention. Article 3 is about the

freedom of choice. According to this article; a contract shall be governed by the law chosen by the parties. It means the parties of the contract can decide to apply any law system on their relationship or their contract.

And also, They can change the law any time during the contract with which law they want to apply to their relation. Even though the new law has different consequences than previous law; they can choose the new one. But the choice shall not affect adversely rights of third parties.

And the rest of the first paragraph protects the worker’s right , even if they don’t choose an applicable law.

Second, third and fourth paragraph of the article 8 is about what if the applicable law wasn’t chosen by parties as in this article.

Second paragraph of the art. 8: To the extent that the law -applicable to the individual employment contract- has not been chosen by the parties, the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract. The country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country.

Second paragraph is related which law will govern the contract absence of any chosen law. If the parties have not chosen an applicable law, there are two ways to find the governing law the contract;

a) The law of country which the contract was established on its territorial. So, even if the parties don’t choose any law to apply to their relation, where the consensus was ensured, its law will be applied.

b) If to determine (a) option is not possible, in this case the habitual working place of the employee is the solution source. Habitual working place means where is hosting for most part of the job. Such as, the employee is working in an audit company. He is in the office which is placed in Maribor during 5 days of the week. But the other 2 days, he is going abroad to audit the banks. So, the habitual working place is clearly Maribor. It can be more complicated to define habitual working place, in this case we will decide to the law of where is the connection is stronger with employee.

Third paragraph of the article 8;‘Where the law applicable cannot be determined pursuant to paragraph 2, the contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated.’

It means, in the situations which could not be determined an applicable law according to second paragraph failing a chosen applicable law by the parties - for instance the country’s law can prohibit applying its law- the contract shall be governed by country which is including the working place at the carrying out time.

Fourth paragraph of the article 8:‘‘ Where it appears from the circumstances as a whole that the contract is more closely connected with a country other than that indicated in paragraphs 2 or 3, the law of that other country shall apply.’’

According to this provision, if the situation shows that the contract is much closer to a country than indicated countries in second and third paragraphs, the country’s law which is in more intimate relation with contract govern the contract.

The point of this paragraph is ‘ to prevent wrong implementation.’ How it will provide this ? If we apply the law which is belong to another country which is not related to job as musch as country mentioned fourth paragraph - such as just contract was made in that country-, it can not provide justice because of the conditions of working place are totally different than the another country which is related to job a little. Therefore, it is the more fair to apply closer county’s law.

C. CONSEQUENCES OF ARTICLE 8 OF ROME I CONVENTION

There are some cardinal consequences of this article;

This article provides the freedom of choice. It doesn’t order any law to be chosen or it doesn’t pressure to parties. But it has implied to choose an applicable law. Even they don’t, it regulates some other solutions and it defines an applicable law.

It provides the equality by determining applicable law. It provides equality how advising to choose a law. If they choose a law, employee’s and employer’s rights will be under law’s control and all parties will know their all rights and obligations. A party cannot ask anything which is not placed in the contract/law.

It directs the weak parties (employee) to ask their right. It provides a law protection and the employees think ‘okay, law back me up I can stand against to injustices or exploiting by employer.’ And it provides justice.