With respect to employers with a multi-jurisdictional presence in the European Union, where a dispute arises between them and an employee concerning the law applicable to cross-border employment contracts, it is first necessary to assess whether the objectively applicable law was deviated from by way of a choice-of-law clause. If so, it is then necessary to determine whether this affects the objectively applicable law's mandatory provisions and whether these are more favourable to the employee than the law chosen.
In employment contracts with a cross-border reach, it is always necessary to determine the objective law to which the contract is to be subject and to what extent this may be deviated from by way of a choice-of-law clause. While the primary deciding factor in this context is the place in which employees generally perform their work, a number of problems may be encountered when determining where this is.
Companies should always clarify which social security laws apply to employees who are deployed in other countries. For such employees, it is often important to know whether they can remain in the social security system of their home country in order to avoid losing their existing social security accruals. Where the cross-border deployment of staff relates to non-EU countries, it is necessary to determine whether a social security treaty with the country in question has been concluded.
When drafting employment agreements which relate to several EU jurisdictions, it is advisable to determine the applicable law in advance. The decisive feature in this context is the jurisdiction to which the employment contract objectively belongs. The place of work principle dictates that employment contracts and relationships are primarily subject to the law of the country in which or from which the employee habitually carries out work in the performance of their employment contract.
In today's globally interconnected world of work, cross-border issues play an increasingly prominent role – particularly for corporates with a multi-jurisdictional presence in the European Union. When drafting employment agreements which relate to several EU jurisdictions, it is therefore advisable to determine the applicable law in advance. The possibility of selecting which legal context should apply offers parties a certain level of autonomy; however, this is not unlimited.