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.
Many international companies run their domestic operations via a branch of a foreign parent, rather than a locally established company. While cross-border spin-offs are theoretically permitted under European law, they do not represent a feasible option due to inadequate domestic regulations. Whether such reorganisations will affect workers' employment status and works councils' co-determination rights, particularly following a change in operations, must be assessed on a case-by-case basis.
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.
Sending employees on secondments to company sites in other countries is a major issue in cross-border employment law. It is often a popular way of deepening cross-border cooperation, particularly in terms of transferring know-how and securing closer contact with foreign branches. Employers increasingly wish to fall back on instruments of this kind, especially in preparation for Brexit. In legal terms, particular focus should be placed on drafting contracts.
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.