Employment Law for International Drivers: Ruling by the Court of Justice of the EU

The Court of Justice of the European Union has issued an important ruling on determining the applicable law for employment contracts of drivers working across multiple Member States. The judgment in Case C-485/24 Locatrans may have significant implications for thousands of workers in the transport industry.

Background

The case concerned a French national employed in 2002 by the Luxembourg transport company Locatrans as a driver. The employment contract contained a choice-of-law clause designating Luxembourg law. The driver was to carry out transport operations in several European countries, including France.

Over time, the factual situation changed — the driver’s activities became increasingly concentrated in France. The employer itself acknowledged this change in 2014 by registering the employee with the French social security system. That same year, after the driver refused to reduce his working hours, Locatrans terminated his employment.

Journey Through the Courts

The dismissed employee brought an action before the labour court in Dijon. The court of first instance rejected his claims, examining the case under Luxembourg law in accordance with the contractual provision. However, the Court of Appeal in Dijon overturned this decision, holding that French law applied — given the place where the employee habitually carried out his work.

Locatrans filed an appeal in cassation. The French Court of Cassation, recognising the complexity of the legal issue, referred a preliminary question to the Court of Justice of the EU.

The Core Legal Issue

The key question was: which law applies to an employment contract when an employee initially performed duties in one location but subsequently their activities moved to another country, which became the new habitual place of work?

The Rome Convention of 1980, governing the law applicable to contractual obligations, restricts the parties’ freedom to choose the applicable law — such choice cannot deprive the employee of the protection afforded by mandatory provisions of the law that would apply in the absence of such choice.

The Court’s Ruling

The Court clarified the mechanism for determining the applicable law in the absence of a choice made by the parties. The Rome Convention provides two primary connecting factors: the country in which the employee habitually carries out work, or — where no such place can be identified — the country where the employer’s place of business is situated.

In the Court’s view, the first connecting factor does not allow for a definitive determination of the applicable country when the habitual place of work has shifted from one country to another during the employment relationship. Therefore, recourse must be had to the second connecting factor — the place of business of the undertaking which engaged the employee, which in this case is located in Bettembourg, Luxembourg.

However, the Court noted the existence of an escape clause. If it appears from the circumstances as a whole that the contract is more closely connected with another country, the law of that country applies.

Guidance for the National Court

The Court indicated that the French Court of Cassation will need to examine whether the employment contract does not in fact show a closer connection with France. In conducting this analysis, the court should take into account all the elements characterising the employment relationship, in particular:

• the last place where the driver habitually carried out his work,
• the requirement to be affiliated with the French social security system.

Significance of the Ruling

The judgment has considerable practical importance for the transport industry, where employees frequently perform their duties across multiple countries. The ruling confirms that formal contractual choice-of-law clauses cannot deprive workers of the protection guaranteed to them by the laws of the country where work is actually performed.

Particularly significant is the Court’s emphasis that the evolution of the employment relationship must be taken into account when assessing the applicable law — the fact that an employee initially worked in multiple countries does not preclude a subsequent finding of a closer connection with a specific country once the actual place of work has stabilised.