C-125/92

MULOX IBC v GEELS

OPINION OF ADVOCATE GENERAL JACOBS delivered on 26 May 1993 *

My Lords, his marketing activities during 1989 in Ger- many and then in Scandinavia, Belgium and the Netherlands — French territory being excluded from his area of responsibility until 1. The Cour d'Appel, Chambéry, has asked September 1989. According to a memoran- for a preliminary ruling on the interpretation dum which Mr Geels prepared for his of Article 5(1) of the Convention of 27 Sep- employer, dated 19 April 1990, it was not tember 1968 on Jurisdiction and the until January 1990 that he worked with Enforcement of Judgments in Civil and Mulox agents in France and serviced his Commercial Matters (hereafter 'the Brussels employer's French customers. Dissatisfied Convention'), as amended by the Conven- with the results of Mr Geels' work, Mulox tion of 9 October 1978 on the accession of decided to dispense with his services and the Denmark, Ireland and the United Kingdom employment relationship seems to have (Official Journal 1978 L 304, p. 79). ended on 7 May 1990, when he wrote to Mulox acknowledging the termination of his contract and demanding compensation in The background lieu of notice equal to 12 months' salary, plus damages.

the parties and indicated by the Rome Con- 'Does the application of the jurisdiction rule vention of 19 June 1980 on the Law Appli- under Article 5(1) of the Brussels Conven- cable to Contractual Obligations (Official tion of 27 September 1968 require the obli- Journal 1980 L 266, p. 1) as the law of the gation characterizing the employment con- employer's place of establishment, and that tract to have been performed wholly and Mr Geels was not entitled under English law solely in the territory of the State of the to compensation in lieu of notice, compensa- court seised of the dispute, or is it sufficient tion for dismissal or damages. It argued in for its operation that part of the obligation the further alternative that Mr Geels' claims — possibly the main part — has been per- were unfounded under French law. formed in the territory of that State?'

The relevant Convention provisions and case-law

I - 4086

MULOX IBC v GEELS

1. in matters relating to a contract, in the ities are pursued, which determines the courts for the place of performance of the application of mandatory rules and collective obligation in question'. agreements' (paragraph 16 of the judgment).

1473. The unusual feature of that judgment is taken into account for the purposes of that the Court ruled that a term used in the applying Article 5(1) is the obligation which Convention should be interpreted by refer- corresponds to the contractual right on ence to the national law of a specific country. which the plaintiff's action is based: Case More frequently the Court has held that the 14/76 de Bloos v Bony er [1976] ECR 1497, at terms used in the Convention should be

The business of the undertaking or employer, and Court held that in such circumstances Arti- they are linked to the place where the activ- cle 5(1) of the Brussels Convention could

not be relied upon to confer jurisdiction the courts for the place where the business upon a territory within the scope of the which engaged the employee was or is now Convention. More interestingly, however, situated'. the Court rejected the view that, where it was difficult or impossible to determine in which State the work was performed, the courts of the place of business through 10. However, as the Commission pointed which the employee was engaged should out in its written observations, the San have jurisdiction. The Court rejected that Sebastian Convention entered into force, as view, accepting the argument that it might regards France, the Netherlands and Spain, operate unfairly to the detriment of the on 1 February 1991, in accordance with Arti- employee, since it would enable the cle 32 thereof. The amendments made by the employer to sue him at the employer's place San Sebastian Convention apply only to legal of business, thus creating a forum actoris proceedings instituted after its entry into which would be contrary to the basic princi- force in the State of origin (Article 29(1)). ple of the Brussels Convention. Since it is clear from the order for reference that Mr Geels instituted proceedings against Mulox before 1 February 1991, the version of the Brussels Convention which is applica- ble in the present case is the 1978 version 9. It should be noted that Article 5(1) of the established by the Convention on the acces- Brussels Convention has now been amended sion of Denmark, Ireland and the United by Article 4 of the San Sebastian Convention Kingdom. of 26 May 1989, which provides for the accession of Spain and Portugal to the Brus- sels Convention (Official Journal 1989 L 285, p. 1). A further sentence has been added to 11. For the sake of completeness I will men- Article 5(1), which now reads: tion two other Conventions which may cast some light on the issues before the Court. The Lugano Convention of 16 September 1988 (Official Journal 1988 L 319, p. 9) extended the principles of the Brussels Con- vention to the countries of the European 'A person domiciled in a Contracting State Free Trade Association. Article 5(1) of the may, in another Contracting State, be sued: Lugano Convention, which is not applicable to the present case, provides that:

'... a contract of employment shall, in the absence of choice in accordance with Article 3, be governed: 12. The amendments made to Article 5(1) of the Brussels Convention by the San Sebas- tian Convention were modelled on the (a) by the law of the country in which the Lugano Convention but account was also employee habitually carries out his work taken of the comments made by the Court in in performance of the contract, even if he the Six Constructions judgment, which was is temporarily employed in another coun- delivered after the adoption of the Lugano try; or Convention: see the Report on the San Sebastian Convention by M. de Almeida Cruz, M. Desantes Real and P. Jenard (Offi- cial Journal 1990 C 189, p. 35, at pp. 44 and (b) if the employee does not habitually carry 45). As a result, under the San Sebastian out his work in any one country, by the Convention, the jurisdiction based on the law of the country in which the place of place of the business which engaged the business through which he was engaged is employee is available only to the employee. situated; Under the Lugano Convention it is available to both parties. An unusual feature of Article 5(1) of the Lugano Convention is that it is based partly on a legal fiction: where the unless it appears from the circumstances as a work is not habitually performed in a single whole that the contract is more closely con- country, the place of performance is deemed nected with another country, in which case to be the place of the business ('etablisse- the contract shall be governed by the law of ment' in the French version) which engaged that country.' the employee, even though neither the employer nor the employee may have been required to perform any obligations under the contract at that place. Although the San 14. The Rome Convention applies in each Sebastian Convention lays down a similar Contracting State to contracts made after the jurisdiction rule, it does so without recourse date on which the Convention entered into to legal fictions: it simply provides that the force with respect to that State (Article 17). ' employer may be sued at a particular place without pretending that that is the place of performance of any obligation under the 1 — The French court regards the Convention as applicable to contract. the contract between Mulox and Mr Geels, although it was obviously concluded before 1 April 1991.

17. The Commission points out that, The observations submitted to the Court according to the judgment in Tessili v Dun- lop (cited above, in paragraph 7), the place of performance of the obligation in question is to be determined by the law which governs the obligation according to the conflict rules 15. Written observations have been submit- of the court before which the proceedings ted by the French and German Governments are brought. However, the Commission and by the Commission. The French Gov- questions whether it is appropriate to apply ernment considers that Article 5(1) of the that solution to contracts of employment Brussels Convention may now be inter- and suggests that it would be preferable to preted in the light of the San Sebastian Con- give an autonomous definition of the con- vention; therefore, since the employee did cept of place of performance in relation to not habitually carry out his work in a single such contracts. According to the Commis- country, jurisdiction should be conferred sion, the considerations which led the Court upon the courts of the State in which the to treat contracts of employment as a special business which engaged him is or was situ- category for the purposes of the identifica- ated. That would, according to the French tion of the relevant obligation also justify Government, ensure that the choice of forum treating those contracts differently with coincides with the choice of law, since the regard to the determination of the place of contract is in its view governed by English performance of that obligation. The Com- law pursuant to Article 6(2) of the Rome mission notes that that approach is con- Convention. firmed by the San Sebastian Convention, which gives an autonomous definition of the place of performance of employment con- tracts, but considers that a similar result can be reached on the basis of the 1978 version 16. The German Government takes the view of the Convention. that it is sufficient for part of the character- istic obligation to have been performed within the territorial jurisdiction of the court seised for jurisdiction to be conferred upon 18. As regards the content of the autono- that court pursuant to Article 5(1) and mous definition of the place of performance, favours conferring jurisdiction, in circum- the Commission considers that, where the

19. The simplest solution — and one which 21. An autonomous interpretation of the would, moreover, be entirely consistent with terms used in the Convention is preferable in the existing case-law — would be (a) to con- principle because it helps to secure the uni- firm the ruling in Ivenel v Schwab to the form application of the Convention and thus effect that the relevant obligation for the pur- contributes to the realization of its underly- pose of applying Article 5(1), in disputes ing purpose, which is to unify the jurisdic- arising out of a contract of employment, is tion rules of the Contracting States. Such the obligation which characterizes the con- unification is inevitably impeded if the tract (normally the obligation to perform meaning of the terms used in the Convention work) and (b) to confirm the ruling in Tessili varies according to the applicable law. That v Dunlop to the effect that the place of per- doubtless explains why the Court has always formance of the relevant obligation is to be regarded autonomous interpretation as the determined by reference to the law which norm and has resorted to interpretation by governs the obligation according to the con- reference to national law only in exceptional flict rules of the court before which the pro- cases where special considerations applied. ceedings are brought. If such an approach But the grounds given by the Court in Tessili were taken, there would be no need for the v Dunlop for determining the place of per- Court to give further consideration to the formance by reference to national law do not criteria to be used in determining the place seem nearly so compelling in relation to a of performance of an employment contract contract of employment, especially if the rel- under which the employee works in a num- evant obligation is the obligation to perform ber of Contracting States. That would be an work (see paragraphs 22 and 23, below). issue for the national court to resolve in Moreover, the grounds given in Ivenel v accordance with the law applicable to the Schwab and Shenavai v Kreischer for treating contract under its own conflict rules. contracts of employment differently from

22. In Tessili v Dunlop the Court justified recourse to national law for the purpose of determining the place of performance on the ground that it was impossible for the Court to give substantial guidance on the interpre- tation of that concept 'having regard to the differences obtaining between national laws of contract and to the absence at this stage of legal development of any unification in the substantive law applicable'. In that case a 24. It is clear from the judgments in Ivenel v German buyer claimed damages from an Schwab and in Shenavai v Kreischer that the Italian seller as a result of the latter's alleged overriding reason for treating employment breach of an obligation to deliver goods of contracts as a special case is the existence of a sound quality; the seller, whose seat was in close and enduring connection with a partic- Como, had delivered the goods to a carrier ular legal system within which the employ- in Como appointed by the buyer. All legal ment relationship unfolds and under which systems contain rules for determining the the employee enjoys the protection of man- place of performance of that type of obliga- datory legislation (see in particular para- tion; those rules are often of a highly techni- graphs 15 and 19 of Ivenel v Schwab and cal nature, they vary according to the type of paragraph 16 of Shenavai v Kreischer). If contract (cif, fob, ex works, etc.), they take then the aim, when applying Article 5(1) to into account legal presumptions about the employment contracts, must be to identify intentions of the parties and they are any- the country with which that close and endur- thing but uniform. It would have been man- ing link exists, that leaves little scope for the ifestly inappropriate for the Court to application of any rule of national law which attempt to devise a uniform rule and impose might locate the place of performance in it on the courts of the Contracting States. some other country and which might, like Similar considerations apply to pecuniary Article 5(1) of the Lugano Convention, be obligations, whose place of performance is based on a legal fiction. It follows that the often determined by arbitrary rules stating place of performance should be determined, that a debt is payable at the residence of the not by reference to the applicable national creditor or of the debtor. Once again it law, but on the basis of uniform criteria to be would be inappropriate for the Court to established by the Court. In other words the impose a uniform rule even for the purpose term 'place of performance' must be inter- of determining jurisdiction. preted autonomously.

27. Desirable though it may be to confer The interpretation of the term 'place of per- jurisdiction over employment disputes on formance' the courts of the country whose law is appli- cable, that will not always be possible in practice, even after the harmonization of the choice-of-law rules effected by the Rome Convention. It is clear from Articles 3 and 26. The judgment in Ivenel v Schwab 6(1) of the Rome Convention that the parties appears to suggest that one of the principal are in principle free to choose the law appli- criteria governing the interpretation of Arti- cable to a contract of employment; the cho- cle 5(1) is the desirability of conferring juris- sen law might not necessarily be the law of diction on a court which will be able to the competent court, unless of course the apply its own law, rather than a foreign law. parties include in their contract a jurisdiction Thus in paragraph 15 the Court stated: clause specifying the courts of the country whose law is chosen as the lex causae. But even without those complications, there can- not be any certainty that the lex causae will always coincide with the lex fori, especially while the Court of Justice does not have 'It follows from the foregoing account that jurisdiction to interpret the Rome Conven- in the matter of contracts Article 5(1) of the tion as well as the Brussels Convention. The Convention is particularly concerned to present case is proof of that. The French attribute jurisdiction to the court of the court, which appears to read Ivenel v country which has a close connection with Schwab as establishing a necessary link the case; that in the case of a contract of between the applicable law and jurisdiction, employment the connection lies particularly considers that under Article 6 of the Rome in the law applicable to the contract; and that Convention the contract between Mulox and according to the trend in the conflict rules in Mr Geels is governed by English law. It regard to this matter that law is determined could be argued that on a proper interpreta- by the obligation characterizing the contract tion of Article 6 the contract is governed by in question and is normally the obligation to French law. Certainly an English court might carry out work.' arrive at that conclusion, either on the basis

of Article 6 of the Rome Convention or on would seem appropriate to apply the manda- the basis of its own rules of private interna- tory legislation in force at each of the several tional law. The paradoxical result is that if, places of employment. Articles 6 and 7 of the after the Court's preliminary ruling, the dis- Rome Convention contain provisions which pute is finally litigated in France English law appear to be capable of achieving the desired will be applied, whereas if the litigation were results, regardless of the country in which to take place in England French law might litigation takes place. be applied. (Article 15 of the Rome Conven- tion excludes renvoi.) It must also be remem- bered that jurisdiction under Article 5(1) is not exclusive and that the plaintiff could in any event choose to sue at the defendant's domicile under Article 2 of the Brussels Convention, regardless of the place of per- 29. In my view, the true basis for the formance. There must be many cases in Court's ruling that the relevant obligation, which a contract of employment is governed for the purpose of applying Article 5(1) of by a law other than the law of the country in the Brussels Convention in employment dis- which the defendant is domiciled. putes, is the characteristic obligation under the contract of employment lies not so much in the desirability of establishing jurisdiction in the country whose law governs the con- tract, but rather in the simple proposition that the worker should be entitled to sue his employer (and vice versa of course) at the place where he works. That is the natural forum for such disputes and it will in most cases be the most convenient forum for the employee. He should not be deprived of the convenience of suing there simply because 28. I conclude from the above that it would his employer is domiciled in another Con- be a mistake to exaggerate the importance of tracting State. That derogation from the gen- the link between jurisdiction and lex causae eral rule laid down in Article 2 of the Con- in employment disputes. As regards the ref- vention is justified by the particularly close erence to mandatory rules in Shenavai v connection between the dispute and the Kreischer, it is of course important to pre- courts at the place where the work is done. vent an employer from evading the applica- tion of legislation which has been enacted for the protection of employees and which can- not be excluded by contract. But that merely begs the question which country's manda- tory legislation should be applied. Matters such as working hours, annual leave, mater- nity leave and unfair dismissal should pre- 30. Having thus established the basis for the sumably be governed by the mandatory pro- rule that jurisdiction is determined by the visions of the lex causae. As regards matters characteristic obligation in employment dis- such as safety and hygiene (e. g. rules on fire putes, I turn to the relatively straightforward exits or the use of asbestos as an insulator), it task of determining the place of performance

31. In view of the wording of the question formulated by the Cour d'Appel, two pre- liminary points need to be made. First, I do not think that the work must have been per- formed 'wholly and solely' in a single Con- tracting State in order for Article 5(1) to apply; where the worker is normally employed in one country, its courts should not lose jurisdiction simply because he 32. It follows from those preliminary makes an isolated excursion into another remarks that, where the work is performed country in the performance of his duties. in more than one Contracting State, Article Secondly, where small portions of the work 5(1) of the Brussels Convention should be are performed in a number of different coun- construed as establishing jurisdiction at the tries, I do not think that Article 5(1) can be principal place of employment. That term interpreted as conferring concurrent jurisdic- will in most situations be largely synony- tion on the courts of all those countries, at mous with the concept of the 'habitual' place the election of the plaintiff; if, for example, of employment used in Article 6 of the Mr Geels made a single business trip to Den- Rome Convention and in the Lugano and mark, that should not mean that he could sue San Sebastian Conventions. However, the or be sued in Denmark. The connection with expression 'principal place of employment' Denmark would be insufficiently strong to seems preferable, since it more effectively justify establishing jurisdiction there. More- conveys the idea that one of the worker's over, although the Court has occasionally several places of employment must in normal interpreted the special jurisdiction rules of circumstances be more important than the the Convention as granting the plaintiff a others. The unhelpful nature of the term choice of jurisdictions (as in Case 21/76 Bier 'habitual' is demonstrated by the facts of the v Mines de Potasse d'Alsace [1976] ECR present case: a person who is employed in 1735, which was concerned with jurisdiction several States may not have a habitual place in tort where different considerations apply), of employment in any of them, but may yet the general rule is that Article 5(1) should be have a principal place of employment in one interpreted in such a way as to 'avoid, so far of them. The question which place is the as possible, creating a situation in which a principal place of employment is largely a number of courts have jurisdiction in respect question of fact and must ultimately be left of one and the same contract': Case 14/76 de to the national court, though the Court of Bloos v Bouyer (cited above, in paragraph 6), Justice may offer some guidance in the light at paragraph 9. It must also be borne in of the established facts of the case. Bearing in mind, as the Commission and the German mind the need for caution, since our knowl- Government point out, that if the plaintiff edge of the facts is necessarily limited, I will were given a choice of jurisdictions that confine myself to the following remarks.

33. Where a person employed as a commer- lived in Italy and had his office and centre of cial representative has an office in one Con- operations just across the border in France tracting State, which he uses as a base for his and if he occasionally visited clients in Italy, operations, and from time to time travels the German Government's approach would from that base to other Contracting States mean that he could sue in the Italian courts for the purpose of visiting clients, there must under Article 5(1), even though an insignifi- be a strong presumption that his principal cant part of his work was done in Italy. I do place of employment is located at the place not see how the worker's domicile can be a where he has his office, especially if, as in the decisive connecting factor for the purposes present case, he also resides at that place. It is of Article 5(1). there that he receives instructions from his employer; it is from there that he communi- cates with his clients by post, telephone, tele- fax, etc., from there that he plans his business trips to other Contracting States and to that place that he returns after each trip. Even if he spends more than half of the year travel- ling in other countries and does not in fact visit a single client in the country in which he has his office, it seems to me very difficult to rebut the presumption that his principal place of employment is located at the place 35. Secondly, it is conceivable that unusual where he has his centre of operations. cases will occur in which two or more work- places are equally important. If, for example, Mr Geels managed Mulox's French office in Aix-les-Bains and its Italian office in Turin and spent roughly half his time at each of those places, it might be difficult to classify one of them as principal and the other as subsidiary. The Commission implies that in such a case Article 5(1) of the Brussels Con- vention should cease to apply and that Mr Geels would have to sue Mulox under Arti- cle 2 at its domicile in England, even though 34. I will briefly make three final points. he had never worked there at all. Such a First, the German Government argued that result would, in my view, be regrettable and in preference to jurisdiction at the principal unfair. It would be as illogical as saying that place of employment, which might be diffi- Mr Smith and Mr Jones are both equally cult to determine, it would be more practical deserving of promotion and that, in order to to use the worker's domicile as the connect- avoid making a difficult choice between ing factor; he could thus sue at the place them, the promotion should be given to Mr where he lives, provided — I assume — that Brown, whose merits are considerably less. part of his work is performed there. In the Even in difficult cases it should be possible present case that approach produces a satis- to find relevant criteria for giving priority to factory result because Mr Geels' office was one place of employment rather than another situated in his residence. There is, however, (e. g. the place where social security contri- no guarantee that it would always produce a butions and income tax are paid or the place satisfactory result. If, for example, Mr Geels where the employee's salary is paid). In the

36. Thirdly, although Mulox could be sued in England, where it has its registered office, under Article 2 of the Brussels Convention, I 37. That is not to say, however, that the disagree with the French Government's view amendments made by the San Sebastian that the English courts could acquire juris- Convention should be disregarded entirely. diction under Article 5(1) of the Convention. The substitute connecting factor introduced As the French Government recognizes, such by that Convention is capable of producing a result could only be achieved under the somewhat anomalous results: if, for example, new version of Article 5(1) introduced by Mr Geels had been engaged in Luxembourg the San Sebastian Convention. The old ver- by an entity which had since transferred sion relied on a single connecting factor: itself to Italy, that might be sufficient to con- namely, the place of performance of the obli- fer jurisdiction on the courts of Luxembourg gation in question, which the Court has held or Italy, even though he had never worked in to mean, in employment disputes, the place either country. That highlights the impor- where the work is performed. The San tance of making a determined effort to iden- Sebastian Convention has introduced a sub- tify a principal (or habitual) place of employ- stitute connecting factor (namely, the place ment. It will thus be possible to ensure that where the business which engaged the jurisdiction is conferred on the courts of a employee was or is situated) which applies country which has a genuine connection only for the benefit of the employee and with the dispute — a result that will not only where he is not habitually employed in always be possible if recourse is had to the a single country. That substitute connecting substitute connecting factor introduced by factor is entirely different from the one used the San Sebastian Convention. For that rea- in the old version of Article 5(1) and it may son I consider that, if the San Sebastian Con- have the result of conferring jurisdiction on vention were applicable in a case such as the the courts of a country in which no obliga- present one, the term 'habitually' should not tion under the contract was to be performed. be construed too literally but should be read Clearly such a result could not be justified as indicating the principal place of employ- under the old version of Article 5(1) and ment.