• Where disputes involve individual employment contracts, EU jurisdiction rules provide that the employee can only be sued where they are domiciled. In Bosworth v Arcadia Petroleum, the ECJ has ruled that for an individual to have an employment relationship for these purposes, they must perform services for and under the direction of another person, implying the existence of a hierarchical relationship. In this case, directors who had acted as the CEO and CFO of the group parent company had drawn up their own employment contracts with some of the group companies and exercised control over by who, where and on what terms they were employed. The apparent lack of subordination meant that they could not properly be regarded as employees for these purposes, notwithstanding the fact that shareholders ultimately had the ability to terminate their contracts.

 

  • The EU jurisdiction rule that employees must be sued in the country of domicile can be disapplied if there is an agreement “entered into after the dispute has arisen” providing for a different jurisdiction. The Court of Appeal in Merinson v Yukos International UK BV has for the first time addressed the meaning of this phrase, holding that a dispute would have arisen if and only if the parties had disagreed on a specific point and legal proceedings in relation to that specific point of disagreement were imminent or contemplated. Disagreement on a specific point would require communication as to the subject-matter of the dispute by one party to another, and could not rely on what one party may have gleaned from a third party. The claim here concerned alleged kickbacks; at most the employer may have harboured a suspicion which prompted it to question another individual, which got back to the employee, but there was no direct communication between employer and employee about alleged kickbacks prior to signing the agreement. It was irrelevant that in this case it was the employee who did not want the claim against him to proceed in his country of domicile at the time of the claim. Jurisdiction clauses in employment settlement agreements will therefore only be effective to oust the normal EU jurisdiction rules in relation to actual disputes and not potential disputes.

 

  • EU jurisdiction rules provide that an employee is entitled to sue their employer either where the employer is domiciled or where the employee habitually worked, but this is subject to an exception permitting multiple defendants to be sued in any EU Member State where at least one of the defendants is domiciled. The EAT held in Ravisy v (1) Simmons & Simmons LLP (2) Mr C Taylor that where there are claims raising the same issues in the same factual matrix, even if lodged as separate actions, the multiple defendants exception will still apply. A claim brought by a law firm equity partner based in a Paris office against a French colleague could be brought in the UK, as it was based on the same factual matrix as the (separate, as yet not joined) claim brought against the UK law firm. (However, the claims of discrimination and equal pay fell outside the territorial scope of the Equality Act 2010, as there was not a sufficiently strong connection with Great Britain.)
Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819