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The Rome I Regulation and the jurisdiction of contracts for remote working abroad

The Rome I Regulation is the main reference on the law applicable to cases of teleworking and smart working abroad.

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Regulation (EU) No. 1215/2012 (so-called ‘Brussels I’) and Regulation (EC) No. 593/2008 (so-called ‘Rome I’) contain special provisions to determine the member States whose courts have jurisdiction on disputes on individual employment contracts and the applicable law.

This legislation constitutes the main reference also for cases of teleworking and remote working, pending its revision and integration. Specifically, in a situation where there is a conflict of laws, the law applicable to the employment contract must be determined in accordance with Article 8 of the Rome I Regulation.

For a general overview of the matter, check our guide on the jurisdictions applicable to remote working from abroad.

Article 8 of the Rome I Regulation

This article aims to protect employees through a mechanism of conflict rules. These rules apply when, in the performance of an individual contract, work is performed in a State (or States) other than that (or those) of the chosen law.

The following paragraphs provide for a hierarchy among the different connecting factors, making it possible to determine the law governing contracts with elements of internationality. Such law shall be applied in the absence of a choice by the parties.

The article also makes it possible to identify the mandatory provisions that will prevail over such law, if a choice has been made on the applicable law.

Mandatory rules

The decision on the applicable law must not be detrimental to the employees. For this purpose, Article 8 of the Rome I Regulation ensures that employees do not lose the protection afforded to them by mandatory rules. It refers, in particular, to “provisions which may not be derogated from by agreement”.

The minimum protection of the law that would have governed the contract, in the absence of a choice of law by the parties, is guaranteed.

Such law intervenes as:

  • The law of the country in which (or, failing that, from which) the employees habitually carry out their work; or
  • The law of the country in which the employer’s place of business is located, if it is not possible to determine the applicable law according to the above criterion; or
  • The law of a country that, in the light of the circumstances, has a closer connection with a country other than that indicated by the preceding rules.

National authorities establish in which areas and for what reasons a rule has a mandatory character. This means it cannot be derogated from by an inter partes agreement.

Application of mandatory rules

The referring court will have to identify the mandatory or default character of a rule according to common hermeneutical criteria. However, it will project its own analysis from the point of view of the system of origin of the rule.

The case law of the Court of Justice of the European Union highlights the mandatory nature of minimum wage rules.

If the mandatory rules of the law that would be applicable in the absence of choice provide greater protection to employees than those of the chosen law, they shall prevail over the latter.

The chosen law will continue to apply to the rest of the contractual relationship.

Thus, the functioning of the mechanism described requires a three-step procedure:

  1. Identifying the law that would have been applicable in the absence of choice;
  2. Determining the rules which, by virtue of the latter, cannot be derogated from by agreement; and
  3. Comparing the level of protection they provide to employees with that provided by the law chosen by the parties.

The law chosen by the parties

The first paragraph of Article 8 of the Rome I Regulation provides for the application of the law chosen by the parties.

The parties may choose freely, even selecting a country with which the relationship has no objective connection. The parties may also regulate the contract according to the laws of different States. In this case, the only limitation concerns the internal consistency of the resulting rules.

The Rome I Regulation and the lex loci laboris

By virtue of Article 8(2), the lex loci laboris applies. This refers to the law of the country in which or, failing that, from which the employees habitually carry out their work.

The jurisprudence of the Court of Justice of the EU provides guidance for identifying the country of habitual performance of work. The Koelzsch sentence also emphasises the overriding character of the lex loci laboris and promotes its extensive interpretation.

In short, it is identified by evaluating the substantial characteristics of the relationship, so that the time element takes the form of an indicator of the functional link between the place of performance of the activity and the interests that the contract aims to satisfy.

The criterion of the place of work

If it is impossible to identify a place where the work is habitually carried out, the law of the State where the employee’s place of work is located applies to the contract.

A ‘place of work’ need not necessarily have a separate legal personality. However, it must have a certain degree of stability. In principle, it must belong to the enterprise hiring the employee and must constitute an integral part of its structure.

The place of business of an undertaking other than that which, formally, appears from the contract as the employer may qualify as such if there are objective elements leading to a concrete situation, which differs from that emerging from the terms of the contract.

Exception clause of the Rome I Regulation

The exception provided for in the fourth paragraph of Article 8 of the Rome I Regulation can be used when it is not possible to define the place where the work is habitually carried out. It also applies if the circumstances arising from the contract reveal a “closer connection” with a different jurisdiction.

The use of this clause is necessary in the case of teleworking and international remote working, which structurally lack a “physical” centre of gravity of the relationship.

The Schlecker sentence specifies a number of elements to determine the significance of a link to a different State. Such elements are based on the:

  • Country where the worker pays income tax;
  • Country in which the worker is affiliated to the social security system and the various pension, sickness and disability insurance schemes;
  • Set of circumstances of the process, such as the parameters considered to establish remuneration and other working conditions.

Studio A&P provides an advisory service for transnational smart working contracts, ensuring that companies comply with EU regulations on the applicable law.

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Regulatory Framework

Regulation (EU) n. 1215/2012


Regulation (EC) n. 593/2008


Directive (EC) n. 96/71


Koelzsch Sentence, C‑29/10


Schlecker Sentence 12.12.2013, C-64/12


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