Recently, the Bacău Court of Appeal confirmed Bacău Tribunal’s decision to admit the exception of general incompetence of the Romanian courts, invoked by the Civil Law Firm Costaș, Negru & Asociații in representing our client, rejecting as inadmissible the action initiated by the company’s employee, an action having as its object the payment of compensation.
In fact, the plaintiff, an employee of a joint-stock company under Swiss law, sued the Romanian limited liability company with the same name, trying to artificially attract the general jurisdiction of the courts in Romania.
According to the employment contract concluded by him with the Swiss employer, the applicable law agreed upon is that of the Swiss Confederation, and the applicable jurisdiction lies with the courts in the Canton of Geneva, Switzerland. At the same time, relevant for the judicial proceedings that took place is that the employee performed work in the state of Kazakhstan.
On the one hand, the plaintiff invoked the provisions of the Labour Code regarding the jurisdiction of courts including those from the location of a secondary headquarters of the employer, along with the applicability of the Lugano Convention, art. 19, point 2 letter b) in order to force the jurisdiction of the Romanian courts, even if the only element that concerns the Romanian state is the employee’s citizenship.
On the other hand, in representing our client, we showed on the one hand that the Romanian legal entity has no contractual or labor law relationship with the employee, being distinct legal entities (the Swiss joint-stock company and, respectively, the Romanian limited liability company) and at the same time that in the case of employment relationships with an element of foreignness, the parties have the possibility to designate the law applicable to their situation, in accordance with the provisions of art. 8 of the Rome I Regulation (the individual employment contract is governed by the law chosen by the parties).
The employee-plaintiff also relied on the fact that the Romanian company would intervene in legal representation of the Swiss employer. In this context, we have shown that the Romanian company is an autonomous, independent company, which concludes contracts in its own name, without being responsible for the activity of other companies, such as the joint-stock company under Swiss law. As long as the employment relationship was born between the employee-plaintiff and the Swiss employer, as also results from the employment contract, the Romanian company is not a party to the respective contract and, therefore, the law does not recognize any rights or obligations arising from it.
The courts confirmed our view, admitting the exception of the general lack of jurisdiction of the Romanian courts. Thus, as long as the employment contract is concluded with a legal entity of another state, and the employee does not perform work on the territory of the state of which he is a citizen and is reported to the existing premises, in no case can a company, even if a group company, substitute itself or substitute a distinct legal entity, only to attract – artificially – the jurisdiction of another national court.
The absurdity of the situation is revealed by the situation in which the Romanian courts would have retained jurisdiction and would have considered that the employee is entitled to the award of compensation: since the only party to the dispute is the Romanian legal entity, which did not conclude any employment contract and in whose charge no obligatory relationship was established, could it be obliged to pay compensation? But what about the real employer, who was not summoned to court?
As part of our activity, the Costaș, Negru & Asociații team provides legal assistance in the field of labor law and social security, assisting the parties in advisory, pre-litigation and also before the court.
This article was prepared for the blog of the civil law firm Costaș, Negru & Asociații by attorney at law Paul Sorinca from the Cluj Bar Association.
Costaș, Negru & Asociații is a civil law firm with offices in Cluj-Napoca, Bucharest and Arad, which offers assistance, legal representation and consultancy in several areas of practice through a team composed of 16 lawyers and consultants. Details regarding legal services and the composition of the team can be found on the website https://www.costas-negru.ro.All rights for the materials published on the company’s website and through social networks belong to Costaș, Negru & Asociații, their reproduction being permitted only for information purposes and with correct and complete citation of the source.
