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. However, in view of the United Kingdom's impending departure from the European Union, questions of structuring in this context have taken on new meaning across the board. ?

When drafting employment agreements which relate to several EU jurisdictions, it may be 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.

The decisive feature in this context is the jurisdiction to which the employment contract objectively belongs.(1) 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 performance of their employment contract (Article 8(2) of EU Regulation 593/2008/EC (Rome I)). This is determined by the place in which the employee actually performs their work or, if no focal point for the work exists, the place in which the employee performs the majority of their work.

If it is impossible to determine the applicable law on the basis of the employee's place of work, it can be determined on the basis of the place of business of the branch that employed the employee or, in exceptional cases, the so-called 'escape clause' (ie, if there is a closer link to the law of another country). In practice, however, the employee's place of work is typically the determining factor.

For further information on this topic please contact Anja Glück or Hans-Peter Löw at Allen & Overy LLP by telephone (+49 69 2648 5000) or email (anja.glueck@allenovery.com or hans-peter.loew@allenovery.com). The Allen & Overy LLP website can be accessed at www.allenovery.com.

Endnotes

(1) This update is part of a series that examines multi-jurisdictional employment law in the European Union. For the first update in the series, please see "Cross-border employment law – freedom of choice principle under EU law".

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.