The “right” way to Go in International Labour Law – and Beyond (Some considerations further to the paper of Houwerzijl and Van Hoek)

§ 1. Watch your step. The “right” steps to take. A. Cold feet. The paper of Houwerzijl and Van Hoek is a very rich paper. Its reading stimulates to formulate a number of comments. In the following I shall present these comments in a cautious manner, thereby referring to some of my earlier publications.1 My main comment is precisely to point out the necessity in my view to argue very cautiously in this delicate field of Private International Law (hereinafter “PIL”). This call for caution also concerns the lines of argumentation aimed at convincing that there is a particular “link” which might entitle to a particular right.2 The paper of Houwerzijl and Van Hoek already contains several indications for this necessity for caution. It then appears that sometimes it can supposedly be expedient to argue for the existence of a particular link, but that 1

I will particularly make use of two previous publications, both published in extensive version in Dutch but also available in short version in English : V. VAN DEN EECKHOUT, “Internationaal arbeidsrecht gemangeld tussen Europese fundamentele vrijheden”, published in short version in Tijdschrift recht en arbeid 2009, p. 5-10, in extensive version (as a Refgov-paper) available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1534024 and in English short version (entitled “International Employment Law Mangled between European Fundamental Freedoms”) available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2408667 (the extensive, Dutch version will hereinafter be referred to as “V. VAN DEN EECKHOUT, “Internationaal arbeidsrecht gemangeld”) and V. VAN DEN EECKHOUT, “De ontsnappingsclausule van artikel 6 lid 2 EVO: hoe bijzonder is de zaak Schlecker?” Tijdschrift recht en arbeid 2014, p. 3-8, in the English version (entitled “The Escape-Clause of Article 6 Rome Convention (Article 8 Rome I Regulation): How Special is the case Schlecker?”), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2403417 (hereinafter referred to as “V. VAN DEN EECKHOUT, “De ontsnappingsclausule””). Several other of my earlier works on the topic of international employment contracts are available on ssrn (http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=919707). 2 In various regimes “links” can be distinguished which entitle to a certain right or the applicability of a particular regime, in particular in the Rome Convention and the Rome I Regulation, the Posting Directive, and the Enforcement Directive. It can also be pointed out that there will have to be particular circumstances in order that for instance European fundamental freedoms such as the freedom of services will be at issue (and that “links” can also be distinguished in that context).

Electronic copy available at: http://ssrn.com/abstract=2643542

on further consideration surprising effects may turn up, for the employee himself who puts forward such argument in his case or for other employees in other – similar or different – cases: following a line of argumentation and even actually obtaining what was intended can at a further stage have a treacherous effect. B. Mind the gap. This is for instance already apparent in arguments about the interpretation of the concept of “habitual place of work”: for an employee who is posted from a country with low labour protection to a country with high labour protection it may seem attractive to argue that his “habitual place of work” must not (or no longer) be situated in the “home state” but in the “host state” – and that in that sense a “link” exists with the host state. But now suppose that the employee's argument is indeed convincing, this – the view that the host state must actually be considered as the country of his habitual place of work – does not yet guarantee him that the law of the host state (as being the law of the country of the habitual place of work) will also be effectively applicable: after all, the request by the employer to the court to declare applicable the escape clause of the Rome Convention3 or the Rome I Regulation can still bring about that another law – for instance the law of the home state – will be declared applicable. And moreover: the circumstance that the court is convinced that the habitual place of work is in the host state can form a complication in discussions about the applicability of the Posting of Workers Directive4 (hereinafter

3

As interpreted in the Schlecker ruling (CJEU 12 September 2013, C-64/12 (Schlecker). In that case it was assumed that the Netherlands was in fact the country of the habitual place of work, but the escape clause was nevertheless used to make German law (which in substantive terms was less advantageous for the employee than Dutch law) applicable instead of Dutch law. See also V. VAN DEN EECKHOUT, “Internationaal arbeidsrecht gemangeld” about the actual designation of the “habitual place of work” in the Rome Convention or the Rome I Regulation, about declaring the law of a particular country applicable (e.g. as being the law of the “habitual place of work” or as being the law of the country of incorporation of the employer) in the Rome Convention or the Rome I Regulation, and about its relation to the Posting Directive, all this in the context of the case law of the Court of Justice in the Viking, Laval, Rüffert and C./Luxembourg cases (whereby attention is also paid to the possible role of the “intention to return” aspect in the various contexts). See also recently in the Dutch context the comments of E.J.A. FRANSSEN on Kantonrechter Rechtbank OostBrabant zp ’s-Hertogenbosch 8 januari 2015, JAR 2015/29 (in respect of Hungarian lorry drivers), cf. the earlier FNV/De Mooij case, in respect of Polish employees), in which it was argued to consider the Netherlands as the habitual place of work – see in particular Franssen's criticism of considering the Posting Directive at the same time applicable.) 4

Electronic copy available at: http://ssrn.com/abstract=2643542

“Posting Directive”), this while this Posting Directive might actually assure that at least the hard core provisions of the host state are applicable.5 C. Watch your step. This Posting Directive itself for that matter also turns out to have tricky aspects: set up with the intention to give minimum protection, the Posting Directive seems at present however to function rather as a maximum than as a minimum – this is also already apparent from the designation of this Directive in the paper of Houwerzijl and Van Hoek as a “ceiling” rather than the “floor.” This seems especially to be caused by the tension due to the effect of European fundamental freedoms such as the freedom of services.6 This freedom of services can itself also have a double effect, sometimes possibly with boomerang effects: on the one hand, the possibility of relying on the freedom of services can help to be able to set aside an employment requirement7, but on the other hand it can also be a hurdle in an argument about the applicability of employment conditions of the host state in which an employee (temporarily) works.8 D. A road paved with good intentions? Stay on the right, walk on the left? The aforementioned examples are just a few illustrations9 of dynamics that can be called into being by invoking the existence of a link or by relying on the applicability of a particular regime or rule. Those who keep the above in mind will possibly act very cautiously indeed. The road to hell has been paved with good intentions, so it is said; well then, whatever the “good” or “bad” intentions

5

If not, the procedure of rules of immediate application (of Article 7 Rome Convention or Article 9 Rome I Regulation) would perhaps have to be used. 6 Cf. about this V. VAN DEN EECKHOUT, “Internationaal arbeidsrecht gemangeld.” See also this paper about the “risks” of bringing a case through (arguing for the applicability of) the Posting Directive within the context of the Freedom of Services and the context of the case law of the Court of Justice in the Rüffert etc. cases – and, thus, the potential advantages of avoiding the applicability of the Posting Directive, including the potential avoidance of a “ceiling” - (and more in general the relation between these contexts). 7 Cf. already at the time the Rush Portuguesa case (27 March 1990, C-113/89 (Rush Portuguesa)). See, afterwards, also CJEU 10 February 2011, C-307/09 (Vicoplus) and more recently CJEU 11 September 2014, C-91/13 (Essent). 8 Cf. again the Rush Portuguesa case which set this dynamics in posting situations in motion. 9 See for instance also F. VAN OVERBEEKE, “Het toepasselijk recht op gedetacheerde werknemers na de Handhavingsrichtlijn inzake de detacheringsrichtlijn”, Arbeidsrecht. Maandblad voor de praktijk, 2014/44 where she explicitly draws attention to possible boomerang effects that might be caused by the Enforcement Directive.

in debates about labour protection of employees may be10, in this matter the road does not only seem to be paved with hurdles, but tricks are also lurking and sometimes there even might be boomerang effects. The road to be travelled is in all respects a road to be travelled with caution. §2. The debate: the “right” way to go. And moreover: the question arises what is anyway the direction and the ultimate goal or final destination of the road to be travelled. What is the compass that must be sailed by? At first glance the answer to this question seems to be obvious: after all, in PIL it is a basic principle that the “protection of the employee” acts as guiding principle; in other words in this domain PIL does not intend to be “neutral”; PIL does not want to take a neutral position. “Adequate protection” of the employee is deemed necessary. But on further consideration it appears to be rather more complicated. As Houwerzijl and Van Hoek themselves already make clear in their paper, very divergent ideas about “protection” are possible.11 This manifested itself also in the context of the Schlecker case.12 Hence the question arises how it must be precisely ensured that the employee as the “weaker party” enjoys protection. Moreover, even if unambiguous agreement were achieved about what the protection principle exactly should mean, then questions can still arise about the way in which the PIL protection principle should be brought in line with and balanced against other principles that can be at issue, in particular the European fundamental freedoms13: what will happen if European fundamental freedoms were to put pressure on the PIL protection principle or become at odds with it?

10

It must be acknowledged that the motives behind the arguments put forward in this debate can be diverse, whereby the one motive can possibly already count on more sympathy (with certain groups) and can be presented as more “humanitarian” than the other. Cf. already the discussion behind the entire debate about whether when imposing requirements on mobile employees (in the sense of guaranteeing them higher labour protection) it concerns offering them protection (against exploitation) and/or it (rather) concerns protectionism, safeguarding local employees against competition from outside (ultimately possibly resulting in/intended for simply keeping out foreign employees). 11 See HOUWERZIJL and VAN HOEK where they write about divergent views on the concept of adequate protection. 12 See about this also V. VAN DEN EECKHOUT, “De ontsnappingsclausule”. 13 See about this also recently: J.S. BERGÉ, S. FRANCQ and M. GARDENES SANTIAGO (eds.), Boundaries of European Private International Law (Brussel Bruylant 2015).

Particularly when reflecting about the European fundamental freedom “free movement of employees” in conjunction with discussions about “possibility of competition” and “chances to get a job”, it might be interesting to recall here some passages that were included in the opinion of advocate general Mischo in the case Finalarte14, precisely about the “free movement of employees” (the former article 48 of the Treaty) and representations about chances to get a job for workers and their “equal treatment”: “24. The referring court takes the view that if the national provisions in question have the effect of restricting the freedom to provide services, they must thereby indirectly restrict the free movement of workers, because it is less likely that employees will be recruited and posted abroad if the employer is prevented, as a result of the extension of the holiday fund scheme, from carrying out activities in Germany in exercise of the freedom to provide services. 25. Finalarte and Portugaia claim that Article 48 of the Treaty applies to the posting of workers. They claim that the application of national provisions which make foreign providers of services subject to the German holiday fund scheme constitutes a restriction of the freedom to provide services enshrined in Article 59 of the Treaty, and at the same time breaches Article 48 of the Treaty in that it prevents posted workers from 'following' their employer to the host State and working there on the same terms as in their State of origin 26. The German Government's response is that the question whether the posting of workers falls within Article 48 of the Treaty is irrelevant to the main actions, because the free movement of workers is a fundamental right which can only be asserted by the workers themselves. 27. It argues, in the alternative, that Article 48 does not confer a right on a posted worker to work on the terms in force in his home State, but instead enshrines the principle of equal treatment, which means that the worker must be able to be employed on the same terms as apply to national workers.” Thus, in the Finalarte case, it concerned a very specific argument based on the free movement of employees, as it was argued here, by the employer, that on the basis of the free movement of employees an employer should be able to rely on rules of the country of origin - to be allowed to adhere to lower conditions of the country of origin would foster the competitive position of his employees in the host country.

14

Joined cases C-49/98, C-50/98, C-52/98, C-68/98 and C-71/98 (Finalarte and others), opinion d.d. 13 July 2000 (see particularly nrs. 25-30 of this opinion).

The arguments from the employer based on the free movement of employees were dismissed in this specific case, where the employees were posted abroad. As I already noted in an earlier comment15: abstracted from the specific case Finalarte, these arguments put forward in the Finalarte case by the employer based on the freedom of movement of employees are dangerous when viewed from the principle of equal treatment and the treatment of employees originating from another country: do the foreign employees ultimately only have a chance of employment and of “competition” with local employees if they are prepared to work under worse conditions than the local employees? In any case, in my view, “to get a chance” to get a job must certainly not entail exploitation. Noteworthy in this context is also that reference to the so-called (supposed) “expectations” of the parties might be “risky”: so-called (supposed) “expectations” of the workers concerned could ultimately be used as arguments in a way which as it were risks to “push” people back and reduces or at least restrains their claims.16 But if “freedom of movement” is actually understood as, “enshrining the principle of equal treatment, which means that the worker must be able to be employed on the same terms as apply to national workers” (as a minimum, vvde) - as the German’s Government recalled in the Finalarte case - the European fundamental freedom of movement of employees might be a useful tool for those who wish to guarantee or increase the level of labour protection of employees in cross-border situations.

15

V. VAN DEN EECKHOUT, “Internationaal arbeidsrecht gemangeld” footnote 102. Cf. the reference to the (original and/or actual) socio-economic environment of the parties concerned as possibly also influencing the expectations of the parties concerned. Cf. mutatis mutandis, in the area of international tort law as related to international Corporate Social Responsibility, recital 16 (arguing that “A connection with the country where the direct damage occurred (lex loci damni) strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability”) and article 4(1) of the Rome II Regulation and how the applicability of this “law of the country in which the damage occurs” could work out in situations where damage has been caused outside Europe by a European multinational: it seems possible that such reference to the law of the country in which the damage occurs, if followed as such in cases in which the standards that apply in that socio-economic environment are fairly low, can result in a substantive “unfavourable” result for the parties concerned or in any case a result that the parties themselves possibly would have liked to have been different. Interesting to read in this context are also nrs. 17-18 of the Bundesdruckerei case (CJEU 18 September 2014, C-549/13 (Bundesdruckerei), about employment contracts in a pure intracommunity European context) – where the freedom of services was at issue. 16

Of interest in this respect is, furthermore, that “free movement of workers” is a broad concept, broader than it might appear to be at first glance.17 It is possible, so I venture to say, that the impact of this freedom on PIL is also broader and more far-reaching than might be thought at first sight: I have myself argued already earlier that the potential of this freedom to increase or guarantee PIL labour protection may be greater than thought.18 I myself would have considered it very fascinating if in the Schlecker case the principle of freedom of movement of persons had been at issue and had also been discussed by the advocate-general or the Court of Justice.19 However, neither in the statement of the advocate-general, nor in the ruling of the Court of Justice this European freedom or its possible impact or role are mentioned. Even if this freedom were not at issue in the Schlecker case itself, cases can actually be thought up in which the freedom of movement of persons might actually be at issue. And in such cases the question arises what their impact on PIL would (or could) be and how the judgement given within that framework relates to other configurations. § 3. « On the road ». As a Dutch scholar already wrote in 200420: “International employment contracts seem to have it all. Many, perhaps even all, of the classic problems of private international law present themselves in the context of employment contracts which are connected with more than one legal system.” In the year Cf. also HOUWERZIJL and VAN HOEK, referring to H. VERSCHUEREN, “Toepasselijk arbeidsrecht in grensoverschrijdende situaties. Overzicht en knelpunten van Europese rechtsregels en rechtspraak”, in H. VERSCHUEREN and M.S. HOUWERZIJL (eds.), Toepasselijk arbeidsrecht over de grenzen heen (Deventer Kluwer 2009), p. 1-53. 18 Cf. about this already V. VAN DEN EECKHOUT, “Internationaal arbeidsrecht gemangeld” and V. VAN DEN EECKHOUT, “Enkele beschouwingen naar aanleiding van diverse recente Europese en Nederlandse uitspraken in het internationaal arbeidsrecht (Koelzsch, Voogsgeerd, Vicoplus, Nuonrechtspraak en zaak FNV/De Mooij). Welke (nieuwe) argumentatiemogelijkheden voor werknemers tot opeisen van (meer) arbeidsrechtelijke bescherming in internationale situaties?” Academie voor Arbeidsrecht 2012 (including indications of various ways in which the freedom of movement of persons could have an impact on this subject matter and references to relevant Dutch case law) and V. VAN DEN EECKHOUT, “De ontsnappingsclausule.” 19 See V. VAN DEN EECKHOUT, “De ontsnappingsclausule.” (See also F.G. LAAGLAND, “Grenzeloze problemen bij grensoverschrijdende arbeid”, Arbeidsrechtelijke annotaties 2012, issue 3). 20 M.V. POLAK, “Laborem dulce leminem? Jurisdiction and choice of law aspects of employment contracts”, in J. MEEUSEN, M. PERTEGAS and G. STRAETMANS (eds.), Enforcement of international contracts in the European Union (Antwerp Intersentia 2004), p. 323-342. 17

2015 this is possibly even more the case. By 2015 the subject has become a juicy legal bone that deserves all attention. The paper of Houwerzijl and Van Hoek, in which they have further analysed the subject, bears witness to this; with the comments presented here, here and there especially also by raising questions and referring to earlier publications, I myself have tried to give a modest impetus to further analysis.

Veerle Van Den Eeckhout