A legal debate has arisen over which legislation applies to the employment contracts of airline cabin crew: the legislation of the country in which the worker was hired?, or the legislation determined by the employer’s nationality?
When a strike occurs at an airline or at companies providing ground handling services related to air traffic, airport chaos and disgruntlement among passengers spread like wildfire. In July and August this year, a well-known airline has been in the spotlight as a result of a strike by its cabin crew. But, do we know what the airline’s and the hiring agency’s employees working on board the aircraft are claiming?
After a number of court rulings (some in the cabin crew’s favor, others not) the unions are discussing an issue as important as the law applicable to the employment contracts of the crew.
Broadly speaking, to determine the law applicable to an employment contract we must piece together provisions from various legal instruments, paying particular attention to Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations. This Regulation replaced the Rome Convention which now applies only to contractual obligations before December 17, 2009.
Put very concisely, these instruments provide as a general rule that the applicable law is the national law chosen freely by the parties. And, if no choice has been made, the contract is allowed to be governed by the legislation of the country in which the worker habitually carries out their work under the contract (lex loci laboris). A secondary rule determines the law of the country in which the establishment that hired the worker is located, even if it is a branch of the head office.
Moreover, the Rome Convention contains an escape clause or exception stating that those rules are applicable unless it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract is governed by the law of that country. It must be made clear that this escape clause does not come into play if an applicable law determined by the parties has been expressly stipulated. That choice may never result in employees being deprived of the protection afforded to them by provisions which cannot be departed from by agreement under the law which, in the absence of a choice, would have been applicable under the secondary rules mentioned above.
So, if when signing the contract the parties stipulated that Spanish law is not the governing law, but there are important connections with Spain, is the cabin crew’s position reasonable?
To attempt to shed light on this issue, we must go back in time to the CJEU judgment rendered in cases C-168 and 169/2016 on September 14, 2017, which concluded that neither the place of the aircraft flag state is a distinctive feature of the “place in which the employee habitually carries out his work”, nor is the “home base” equatable with that concept, although it is a significant circumstantial factor that must be taken very much into consideration. That judgment posed a major setback for applying the jurisdiction clause in the disputed contracts, which, moreover, had not been entered into after the dispute had arisen, a fact standing in the way of its application.
The CJEU’s reply was interpreted differently by each party involved, and unions and crew saw an opening to question the applicable law as well as jurisdiction. This was despite existing judgments (such as that rendered by the Labor Chamber of the Valencia Community High Court on January 9, 2018) that have denied jurisdiction to the Spanish courts on the basis of the nationality of the employer and of the aircraft on which the services were provided; of the foreign contract subject to a foreign jurisdiction and legislation; of the orders given from the contracting country and of the disciplinary regime in place there; of the salary paid in the local currency and into a bank account in that country, etc. By contrast, very recently, on September 7, 2018, Tenerife Labor Court number 6 rendered a judgment ruling that territorial jurisdiction lay with the courts of Spain.
Therefore, if an issue like jurisdiction –subject to rules that pivot on a legal concept such as the “place in which the employee habitually carries out his work “-, has not found one clear solution in Spanish case law, the fact of the law applicable to the employment contract differing from that expressly stipulated by the parties looks as if it will present a difficult challenge. All the more so if we throw into the mix that the laws of the country in which the employee habitually carries out his work under the contract, or the law of the country where the establishment that hired the worker is located, come into play if nothing is stipulated.
At this juncture, pacifying or finding a solution to the current issue appears a long way off. We must not forget, however, that due to being an everyday activity passenger air carriage constantly throws up complex challenges to the legal community, often arising from its international and European nature.
Garrigues Labor and Employment Law Department