C-437/00

PUGLIESE

OPINION OF ADVOCATE GENERAL JACOBS delivered on 19 September 2002 1

1. This case concerns the choice of forum in (ii) whether jurisdiction might vest in the accordance with Article 5(1 ) of the Brussels courts of the second Contracting State Convention, 2 where an employee is on the ground that it was the place of engaged by Company A ostensibly to work performance of the obligation to pay in one Contracting State but the employ- the agreed expenses. ment contract is immediately suspended to allow him to work for a related Company B in another Contracting State, with Com- pany A agreeing to pay certain expenses for the duration of that second employment, and where proceedings are brought by the employee against Company A relating to the agreements between them. Factual background and proceedings

2. The Landesarbeitsgericht München (Re- gional Labour Court, Munich) wishes to 3. Ms Giulia Pugliese, whose family is from know in those circumstances Rome, was engaged by Acritalia Società Aerospaziale Italiana ('Acritalia') — now part of the Finmeccanica SpA group ('Fin- meccanica'), the defendant — to work ät- its establishment in Turin, Italy, from 17 January 1990. (i) what is the place 'where the employee habitually carries out his work' for the purposes of the provision in question, and

1 — Original language: English. 2 — Convention or 27 September 1968 on Jurisdiction and the 4. It appears however that she never Enforcement of Judgments m Civil and Commercial Matters (OJ 1978 L 304, p. .36), as amended by the Convention of worked there. By two agreements with 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain Eurofighter Jagdflugzeug GmbH ('Euro- and Northern Ireland (OJ 1978 L .104, p. 1, and — amended text — p. 77), bv the Convention of 25 October fighter', a consortium in which Acritalia 1982 on the Accession of 'the Hellenic Republic (OJ 1982 was and Finmeccanica now is a partner to L 388, p. 1 ) and by the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese the extent of some 20%) and a further Republic (OJ 1989 L 285, p. 1). agreement with Acritalia, all three signed in

7. Under the contract of employment with Eurofighter, that company was to pay Ms Pugliese's salary and certain other allow- 5. In the agreement suspending Ms Pug- ances. She was to pay tax and national liese's employment with Aeritalia, the latter insurance contributions in Germany, and company also undertook to pay her volun- the contract was to be subject to German tary insurance contributions in Italy, to law and the competent Munich courts. It reimburse two return air fares per year also referred to a monthly rental allowance from Munich to the airport nearest her to be agreed 'between you and your parent home in Italy, and to credit her on her company'. return with full seniority for the period worked abroad. Her duties with Euro- fighter could be terminated because of a change in programme, the expiry of the agreed period or, for personal reasons, by mutual agreement between the three parties. However, if she should terminate the employment with Eurofighter unilat- erally, Aeritalia would be under no obli- gation to reinstate her. Neither the contract 8. Ms Pugliese worked for Eurofighter in of employment nor the agreement suspend- Munich for longer than the agreed mini- ing it contained any choice of law or mum three-year period. In November jurisdiction clause. 1995, however, Finmeccanica informed her that the suspension of her contract would be terminated on 29 February 1996 and that she would be employed in Turin as from 1 March. She responded with a request to be employed in Rome, for personal and family reasons. Finmeccanica, unable to accede to that request, extended the suspension of her contract for three more months, after which it ceased to pay 6. It appears that Aeritalia also undertook the rent on her accommodation in Munich. either to pay Ms Pugliese a rent allowance She then paid the rent herself.

16. The questions on which the national court seeks a ruling are as follows:

13. First, she brought an action before the Arbeitsgericht (Labour Court) claiming reimbursement of her rent and travel expenses from 1 June 1996. That claim '1. In adispute between an Italian national was lodged on 9 February 1998, but served and a company established under Ita-

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lian law having its registered office in 17. The Court has received written obser- Italy arising from a contract of employ- vations from Ms Pugliese, the German and ment concluded between them which United Kingdom Governments and the designates Turin as the place of work, Commission; Ms Pugliese and the Com- is Munich the place where the mission presented oral submissions at the employee habitually carries out his hearing. work under the second part of Article 5(1) of the Brussels Convention where, from the outset, the contract of employment is temporarily placed on non-active status at the request of the employee and, during that period, the employee carries out work, with the consent of the Italian employer, but on Brussels Convention, background and case- the basis of a separate contract of law employment, for a company estab- lished under German law at its regis- tered office in Munich, for the duration of which the Italian employer assumes the obligation to provide accom- 18. The Brussels Convention applies in civil modation in Munich or to bear the and commercial matters whatever the costs of such accommodation and to nature of the court or tribunal. Persons bear the costs of two journeys home domiciled in a Contracting State, whatever each year from Munich to the their nationality, are in principle to be sued employee's native country? in the courts of that State, the only exceptions being those pursuant to the rules set out in Sections 2 to 6 of the title relating to jurisdiction. Of those provisions, Article 5 is relevant to the present case.

21. The initial absence of a specific provi- sion was not an oversight. The Jenard Report 4explains that labour law provi- sions varied between Contracting States but that work was under way to introduce a degree of harmonisation. Disputes should as far as possible be brought before the 23. The rules for determining the law courts of the State whose law governed the applicable to contracts, referred to in the contract, and the drafting committee 'did Jenard Report, were embodied in the Rome not think that rules of jurisdiction should Convention in 1980. 7 Under Article 6(2)(a) be laid down which might not coincide of that convention, an individual contract with those which may later be adopted for of employment is governed, in the absence of a choice expressed in the contract itself, by the law of the country in which the 3 — 29 May 1989, cited above in note 2. The additimi also provides for cases where the employee does not habitually carry out work in any one country, when the employer may also be sued in the courts for the place where the business 5 — Case 12/76 Tessili [1976] ECR 1473; see in particular which engaged the employee is or was situated. That rule, paragraph 11 of the judgment. which is also reflected in the other provisions cited below, is 6 — Case 14/76 De B l o o s [1976] ECR 1497; see in particular not in issue here. paragraph 1 5 of the judgement. 4 — Report on the Convention on jurisdiction and the enforce- ment of judgments in civil and commercial matters, Ol 1979 7 — Convention on the law applicable to contractual obligations C 59, p. 1, atp. 24. opened for signature in Rome on 19 June 1980, OJ 1980 I. 266, p. I.

27. Ivenel and Shenavai were confirmed in 25. In Ivenel 9in 1982 the Court enunci- 1989 in Six Constructions, 1 1a case which ated the principle that, for contracts of was pending before the Court at a time employment, the connection between the when further developments were being court seised and the dispute before it is finalised in the various conventions in this determined by the obligation characterising field. the contract, which is normally the obli- gation to carry out work. In arriving at that principle, it referred to the Rome Conven- tion, to the Jenard and Giuliano-Lagarde Reports and to internal evidence that the Brussels Convention was concerned with protecting the weaker party to a contrac- tual relationship. It stressed also that all 28. In 1988, the Lugano Convention 12 claims arising out of a contract of employ- extended the principles of the Brussels ment should fall within the jurisdiction of the same court. 10 — Case 266/85 Shenavai [1987] ECR 239; see in particular paragraphs 16 and 17 of the judgment. 11 — Case 32/88 Six Constructions [1989] ECR 341; see in 8 — Report on the Convention on the law applicable to particular paragraph 10 of the judgment. contractual obligations, OJ 1980 C 282, p. 1, at p. 25. 12 — Convention on jurisdiction and the enforcement of judg- 9 — Case 133/81 Ivenel [1982] ECR 1891; see in particular ments in civil and commercial matters, OJ 1988 L 319, paragraphs 12 to 19 of the judgment. p. 9.

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Thirdly, in matters relating to contracts of employment, interpretation of Article 5( 1 )... must take account of the concern to afford proper protection to the employee as the 'First of all,... as regards this type of weaker of the contracting parties from the contract, the place of performance of the social point of view. Such protection is best obligation upon which the claim is based,

16 — The Court referred to Tessili and to Case CM 25/92 MULOX 13 — OJ 1990 C 189, p. 57, at pp. 72-73. IBC [1993] ECK I-407S, paragraphs 10, 1 1 and 16 of the judgment. Case C-383/95 Rutten [1997] ECU 1-57, para- 14 — Report on the Convention on the accession of the Kingdom graphs 12 and 13, and Case 0 4 4 0 / 9 7 GIE Groupe of Spain and the Portuguese Republic to the [Brussels Concorde [1999] ECR I-6307, paragraph 14. Convention!, OJ 1990 C 189, p. 35. at paragraph 23. 17 — The Court referred to Mulox IBC. cited above, paragraph 15 —Judgment of 27 February 2002 m Case C-37/00 Weber, 17 of the judgment, and Rutten, cited above, paragraph paragraphs 38 to 4 1 . 16.

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assured if disputes relating to a contract of ficult, in that no such base appeared to employment fall within the jurisdiction of exist. The Court therefore elaborated on its the courts of the place where the employee previous rulings, by holding that: discharges his obligations towards his employer, since that is the place where it is least expensive for the employee to commence or defend court proceedings... 18

'... where an employee performs the obli- gations arising under his contract of employment in several Contracting States the place where he habitually works, within It follows... that, as regards contracts of the meaning of [Article 5(1)], is the place employment, the place of performance of where, or from which, taking account of all the relevant obligation, for the purposes of the circumstances of the case, he in fact [Article 5(1)], is the place where the performs the essential part of his duties employee actually performs the work vis-à-vis his employer. covered by the contract with his employer ...' 19

35. Recital 13 in the preamble to that regulation specifics that in relation to, inter alia, employment, 'the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general 33. Mention may also be made of the rules provide for'. 'posted workers' directive', 20 which applies to certain workers posted by their employers to work for another undertak- ing, or for an establishment or undertaking owned by the group, in another Member State. Article 6 gives jurisdiction over disputes concerning certain guaranteed Analysis terms and conditions to the courts of the Member State in which a worker is posted. It was to be transposed into national law by 16 December 1999.

Preliminary remarks 34. Finally it may be noted that, since 1 March 2002, the Brussels Convention has been replaced by Council Regulation No 44/2001, 21 which contains a section on jurisdiction over individual contracts of employment separate from the general provisions relating to contracts. Under 36. This novel situation is not envisaged in Article 19(2)(a), an employer domiciled in the Brussels Convention, nor can it be a Member State may be sued, in another resolved by simple reference to the existing Member State, 'in the courts for the place case-law. where the employee habitually carries out

20 — Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services, OJ 1997 L 18, p. 1. 21 — Council Regulation (EC) N o 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement 37. Ms Pugliese had two contracts of of judgments in civil and commercial matters, OJ 2001 employment, one with Aeritalia/Finmec- L 12, p. 1; the Convention however still applies in cases involving Denmark. canica and the other with Eurofighter,

38. The circumstances of this case are clearly very specific. None the less, it appears that arrangements of a similar kind may be common between undertakings related in the same way as Aeritalia/ Finmeccanica and Eurofighter. It will there- fore be helpful when considering the inter- pretation to be given to look also beyond those specific facts on which the national court must base its own decision, and it should be borne in mind that the question of jurisdiction with regard to a dispute over the termination of the contract of employ- ment with Finmeccanica must also be determined in separate proceedings. 41. Second, the posted workers directive is also inapplicable because it could not have been relied on directly before 16 December 1999 and does not appear to have been transposed into German (or Italian) law before that date. Moreover, as the national court and the Commission have pointed Provisions not directly applicable out, it is doubtful whether Ms Pugliese's situation would come within the scope of the directive at all, since it does not seem to meet the criteria laid down in Article 1(3): Ms Pugliese was not working under the direction of Aeritalia/ Finmeccanica, Euro- 39. A number of instruments, although fighter was not 'owned' by Aeritalia/ Fin- they have been discussed in the proceedings meccanica, and Aeritalia/ Finmeccanica and although they form part of the legal was not a temporary employment under- background, are not directly relevant. taking or placement agency.

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42. Furthermore, although I have referred 45. The matters it concerns arise out of the above to the Lugano Convention and to contract of employment between Ms Pug- Regulation No 44/2001, it is clear that liese and Aeritalia/ Finmeccanica and out of their provisions do not apply as such to, the agreements temporarily suspending the respectively, cases where only Contracting employee's obligation to work under that States to the Brussels Convention are contract but maintaining and/or imposing involved and proceedings instituted before certain obligations on the employer. 1 March 2002.

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quite separate from the original contract of 50. The employee's obligation to perform employment. work under a contract of employment may be suspended for a variety of reasons. The suspension may be imposed by law, as in the case of maternity leave or where the employee is required to carry out some form of military or civil service. Or the employee may be freed for an agreed period to pursue study or some other activity, an a r r a n g e m e n t which may benefit both parties. In most if not all of such cases the subsisting relationship will remain one of 4 8 . None the less, I consider that the employment, albeit in a reduced or attenu- agreements between Ms Pugliese and Aeri- ated form. talia/ Finmeccanica formed a whole which had, and never lost, the nature of a contract of employment.

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PUGLIESE

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the present case is sufficient for Munich to work — since such an approach would be treated as the relevant place of work. run counter to the need to have uniform criteria ensuring legal certainty and to avoid any multiplicity of jurisdiction.

57. The reasons underlying the develop- ment of the ground of jurisdiction in issue 59. However, it is a concern which is are important here. One consideration is fundamental to the rule under consider- that in a high proportion of cases the law ation and, unless there are good reasons for governing the contract will be that of the discounting it in a particular case, it should State in which the work is performed and always be among the leading consider- such disputes as arise will be connected ations in the interpretation and application with the place of work. The courts for that of that rule. place will thus be objectively best placed to resolve them. The fact that the employee will by definition be habitually present there (and the employer likely to be either present or represented) is another practical consideration but one which also deals specifically with the concern, stressed con- 60. Consequently, I find the German Gov- sistently by both the Court and the con- ernment's approach too strict. The criterion vention drafters, to afford protection to the of relatedness which it suggests tips the weaker party, the employee, by allowing scales very firmly away from the place him to bring or defend proceedings in the where the employee carries out his work, courts where it will generally be least whereas they should be tipped rather burdensome for him to do so. towards it. Such a demanding criterion would in many cases of this sort rule out all possibility for the employee to avail himself of the intended protection despite the existence of uncontestable objective links between the place of work and the contract in relation to which the dispute arose.

appears to be a useful indicator. If such a necessarily formulated in general terms, is condition is met, the conclusion must surely whether the work performed by the be that the place where the work is carried employee is carried out 'for' or in the out can serve as a basis for jurisdiction over interest of the employer in the contract in disputes arising out of either contract. But relation to which the dispute arises, and a again it might be too severe if viewed as a variety of factors must be taken into necessary condition. In the present case, account when deciding it. Aeritalia might have offered Ms Pugliese a post and she might have accepted even if the Eurofighter post had not been available (or she had not wanted it) or, conversely, she might have been taken on by Euro- fighter even if Aeritalia had not served as an intermediary. Yet neither of those possi- bilities affects the relationship between the 64. The criteria suggested by the German contracts as they were actually signed. Government and the Commission undoubtedly have their place among those factors. But even if they are not satisfied, others may come into play. At the hearing, counsel for Ms Pugliese suggested a number which are in my view also relevant. To what extent was the second contract con- cluded with the participation of the first employer or, conversely, independently by the employee? To what extent do the 62. It is not easy to formulate a single contracts cross-refer to each other? Is there precise test which will always clearly dis- an arrangement between the two employers tinguish between contracts so closely providing a framework for the coexistence related that a single place of work will be of the two contracts? Is there an organic or valid for both and those whose relationship economic relationship between the is more distant and for each of which the employers and if so, how close is it? Does place of work must therefore be determined the second contract of employment provide separately. I doubt, moreover, whether it is for a period of work sufficiently long to necessary or desirable to do so. create a 'habitual' place of work?

66. Assessing the known facts of the pres- with Turin. As the Court stressed in ent case on the basis of all those factors, it Ivenel, 24 the protective aim of the provi- seems to me that the national court would sion in question implies, inter alia, that the be fully justified in concluding that the same court must have jurisdiction over all connection between the two contracts was matters arising out of the same contract of sufficiently close that the work carried out employment. by Ms Pugliese for Eurofighter under the second contract was also performed for Aeritalia/ Finmeccanica or in its interest in the context of the first contract and that the place where she habitually carried out that work may serve as a basis for jurisdiction, Place of performance of the obligation to under Article 5(1) of the Brussels Conven- pay expenses tion, over disputes arising in relation to that first contract. Such a conclusion would also be fully in agreement with the criteria set out in Weber, taking account of the place where the employee worked the longest in performing the essential part of her duties vis-à-vis the employer, in the 68. The considerations above answer the context of the whole duration of the national court's first question in such a way employment relationship with that as to render examination of its second employer. question unnecessary.

—whether the second contract of employment provides for a period of work sufficiently long to create a habitual place of work;

—whether one contract would have been concluded in the absence of the other;

—whether the conclusion of the second contract was contemplated when the first was signed;

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—whether the second contract was concluded with the participation of the first employer or, conversely, independently by the employee;

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