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The international teleworker and the thorny question of the law applicable to the employment relationship

Since the Covid-19 epidemic and the democratisation of telework, more and more companies are facing requests from their employees to telework from their holiday location or even permanently from abroad. But is there an impact on the law applicable to the employment relationship ?

According to the European Court of Justice (ECJ), in application of the Rome I Regulation, it all depends on whether the telework is one-off or permanent from abroad.

Indeed, Article 8 of Rome I provides that the law applicable to the employment contract is first and foremost that chosen by the parties. However, this cannot have the effect of depriving the employee of the rights he or she should enjoy under the law applicable in the absence of choice. The latter being, firstly, that of the country from which the employee, in performance of the contract, usually performs his work.

The ECJ deduced from this provision that the employment contract is therefore subject to the law of the country where the employee "in fact carries out the agreed activities", i.e. "the place where the employee has established the effective centre of his or her professional activities" (ECJ, 13 July 1993, Mulox, case 125/92 and ECJ 9 January 1997, Rutten, case 383/95). Consequently, it seems that short-term telework from abroad on an exceptional basis would not affect the applicable law. The French Supreme Court adopted the same reasoning in 2013 and 2017.

In the first case, a French employee had obtained the agreement of his London-based employer to work partly at his British home before taking up residence in the north of France, where he was allowed to telework and travel to London only once a week. According to the Court, it had not been agreed that the employee would work on a permanent basis in France and London remained the place where he usually carried out his work. Therefore, the contract was still governed by British law (Cass. soc., 27 November 2013, n° 12-24.880).

In the second one, a French employee of a British company was teleworking permanently from Paris. Although the contract did not state that it was governed by French law, it did indicate that the employee teleworked from her French home. The Supreme Court therefore considered that the contract was subject to French law and not British law (Cass. soc., 19 January 2017, n° 15-22.835). The contractualisation of the workplace thus seems to have made a difference and removed any doubt as to the determination of the applicable law.

Consequently, an employer will be well advised to clarify the employment relationship and expressly indicate the employee’s usual place of work to avoid the application of unwanted national law.