IR Notes

The European Court of Justice on 14 September issued a ruling (CJEU, 14 September 2017, cases C-168/16 and C-169/16, Sandra Nogueira) in a case concerning employees of the Irish budget airline Ryanair assigned to Charleroi airport (Belgium). When their employment contract was terminated, they had seised a Belgian labour court in order to obtain the protections conferred by Belgian labour law. The question at issue was to determine whether this court had jurisdiction over such disputes given that their employment contract was drafted in English, was subject to Irish labour law and contained a clause designating the Irish courts as having jurisdiction over possible disputes. However, the employees were assigned to Charleroi airport, which was considered as their ‘home base’, and required to live within an hour’s travel of there. As regards individual employment contracts, Regulation No. 44/2001 of 22 December 2000 (known as the ‘Brussels I Regulation’) provides that an employer having his domicile on the territory of one member state may be sued in another member state “in the courts for the place where the employee habitually carries out his work or in the courts for the last place where he did so”. Specifically in relation to civil aviation, the issue was to determine whether that place should be equated with the ‘home base’ defined by a regulation specific to civil aviation (Regulation No. 3922/91 of 16 December 1991) as “the location nominated by the operator to the crew member from where the crew member normally starts and ends a duty period or a series of duty periods, and where, under normal conditions, the operator is not responsible for the accommodation of the crew member concerned”. The Court of Justice first of all rejected the application of the jurisdiction clause which it said could not “apply exclusively and thus prohibit the employee from bringing proceedings before the courts which have jurisdiction” under the Brussels I Regulation. It went on to state that if a court is not able to determine the ‘place where the employee habitually carries out his work’, it must “refer to a set of indicia” in order to “reflect the true nature of legal relationships” and to “prevent a concept such as that of ‘place where, or from which, the employee habitually performs his work’ from being exploited or contributing to the achievement of circumvention strategies”. This “concept cannot be equated with the concept of ‘home base’”, although the Court recognised that the home base concept is “not … irrelevant” and “amounts to a factor likely to play a significant role in the identification of the indicia”. In conclusion: 1/ It is up to the Mons court of appeal to rigorously apply the indicia-based method to establish whether it has jurisdiction or not. 2/ Should this be the case, it should bear in mind the parties’ wish to make the contractual relationship subject to Irish law, and rule on the basis of this legislation, which is that chosen by the employment contract (see reactions of the social partners and of Ryanair below), bearing in mind, if applicable, the mandatory provisions of Belgian legislation.

Towards a European Labour Authority: In his State of the Union address, delivered on 13 September, the President of the European Commission, Jean-Claude Juncker, presented his priorities for the coming year and outlined his vision of how the EU could evolve between now and 2025 (see press release). He announced the setting-up of a European Labour Authority in order that “all EU rules on labour mobility are enforced in a fair, simple and effective way by a new European inspection and enforcement body” (Commission factsheet). Finding it “absurd to have a Banking Authority to police banking standards, but no common Labour Authority for ensuring fairness in our single market”, the Commission President has decided to “create one”. He announced a proposal by the end of 2018 to establish such an authority.

• BusinessEurope rejects need for any new social directives: During a conference organised by the Estonian Presidency of the EU on 13 September in Tallinn, the Director General of the employers’ organisation BusinessEurope explained that, to share in the benefits of digitalisation, the member states need to achieve employment regulations that are sufficiently flexible to help companies create jobs and adapt to changing economic circumstances. “There is no need for new EU social directives,” he added (see press release).


• Reactions following the “Ryanair” judgement: The Ryanair company defended the position precluding the use of the home base as the sole determinant of what court jurisdiction could hear disputes on labour issues. It is very satisfied by the European Court’s ruling that a set of indicia should be used to determine the court of jurisdiction. Nevertheless, this is not a complete victory since the Court has identified the home base as a “significant indicium”, thus making it an important factor in drawing up the set of indicia. In other respects, Ryanair is pleased to underscore that the judgement does not question the use of Irish contracts of employment for recruiting aircrew within the EU, even if this issue was not addressed by the Court (see press release). The European Trade Union Confederation (ETUC) for its part in a press release welcomed that employees assigned to work in Belgium could take legal proceedings before Belgian courts, contrary to the jurisdiction clause contained in their employment contracts. But the ETUC offers a broad interpretation of the judgement, considering that it also confirms the application of Belgian social legislation to the employment relationship, which is clearly not the intention of the ruling. A positive reaction has also come from the European Transport Workers’ Federation (ETF) which sees in the ruling a “defeat for Ryanair and victory for workers’ rights” (see press release). For the association representing European pilots ECA, “the decision brings a definitive end to Ryanair’s fiction of considering a Ryanair plane as Irish territory, with Irish employees, subject to Irish jurisdiction” (see press release).

Generali: The Italian insurance company Generali (73,727 employees) and the select committee of its European works council on 16 May signed a European charter to encourage teleworking within the group. The parties make reference to the “Telework Joint Declaration in the European Insurance Sector” of 10 February 2015, the text of which is attached as an annex to their charter. With the charter, the group HR division and the EWC “wish to support the entities in the different territories in creating an innovative work environment in the interest of employers and employees”.

• Alstom: The plan to merge with the rail division of the German group Siemens is due to be presented before Alstom’s European works council on 3 October. The merger of the two companies, which are similar in size (each having a turnover of just over € 7 billion and around 30,000 employees) is likely to create an “Airbus for rail”, in which Siemens would hold the majority of the capital. The alliance is an attempt to stand up to the Chinese group CRRC (turnover € 30 billion) which is winning more and more contracts all over the world. The French government will seek to obtain an undertaking to safeguard the jobs of Alstom’s employees for four years.

Safran: The French industrial group Safran (58,000 employees) and the European trade union federation IndustriAll Europe on 19 September renewed their five-year European framework agreement for professional insertion of young people signed in 2013. The new agreement provides for a number of apprentices and interns (including on work-study programs) equivalent to 10% of the total workforce to be welcomed at all European Group facilities each year. Guidebooks for young people undergoing training and their mentors will be drawn up for each country. The role of employees supervising the young people is recognised in the agreement. The guide to best practices will be updated in line with the results of the first agreement, and will also incorporate the commitments made in this latest agreement (see press release).

• Systembolaget: The international trade union federation IUF signed a memorandum of understanding with Systembolaget, the Swedish state-owned alcohol retail monopoly, on 24 August. While Systembolaget operates only in Sweden, it has an international supply chain. The document arose from shared concerns about working conditions at Systembolaget’s suppliers, especially of agricultural raw materials (see press release).

One year of industrial relations in Europe: The European Foundation for the Improvement of Living and Working Conditions (Eurofound) has just published its annual report, which provides an update on how industrial relations and working conditions have evolved within the EU (Developments in working life in Europe: EurWORK annual review 2016). The report, based in part on the contributions of Eurofound’s network of correspondents across the EU (including IR Share, the editor of IR Notes), in particular outlines the changes that have occurred affecting the actors involved in social dialogue, with reference to the representativeness of the social partners and collective bargaining. The report also reviews the different subjects addressed by social dialogue (employment policy, retirement, health and safety at the workplace etc.), indicating the principal changes that have occurred in the member states. There are chapters containing more detailed information about developments as regards wage inequalities and the measures intended to promote the work-life balance, in particular for “caregivers” who provide care for a close relative.