Ruling of the Spanish Supreme Court on employment conflicts and jurisdiction of Spanish courts

13 March 2014

Miguel Pastur

The Spanish Supreme Court has determined that the Spanish Courts do not have jurisdiction to decide on the disciplinary dismissal of a Spanish national cabin crew member based in Norway and employed under Irish law with a contract which submits to the jurisdiction of the Irish Courts (Ruling of the Labour Section of the Supreme Court dated 30 December 2013).

The Supreme Court has upheld the appeal brought by Workforce International Contractors Limited and Ryanair Limited against the ruling of the Madrid High Court, and declared the lack of jurisdiction of Spanish Courts to decide this controversy.

In this case, the dismissal of the employee (a member of the cabin crew) was based on his breach of the internal policies of the company regarding the consumption of products that are meant to be sold to passengers. Specifically, the employee ate a sandwich while he was working, without the required prior authorization from his supervisor or paying for the product in advance. The employee filed a claim against the business' decision to dismiss him before the Employment Courts of Madrid.

At the time of the dismissal the employee provided services to Ryanair in Oslo (although formally employed by Workforce International), having previously provided services to the same airline in Madrid. His employment contract included a clause granting exclusive jurisdiction over any disputes arising from it to the Irish Courts, where both companies have their corporate domiciles.

On the basis of these facts, the Supreme Court has issued a ruling on the controversy regarding the jurisdiction of Spanish Courts, which includes a comprehensive analysis of the international and Spanish legislation in conflict.

The Court starts its analysis explaining that the rules on international jurisdiction are governed by the principle of hierarchy, hence international and EU legislation prevail over the national rules contained in Article 25.1 of the Organic Act of Judicial Power.

From this starting point, the Court determines that the legislation applicable to the case is Council Regulation (EC) 44/2001. This piece of legislation establishes that in order to determine the competent jurisdiction the main criteria is either the domicile of the defendant, as far as it is a member state, or, in employment matters, the place where the employee renders services. The employee is therefore entitled to choose from both possible jurisdictions.

In this case, both defendant companies have their corporate domicile in Ireland and the employee renders services in Norway. Therefore, applying the rules contained in Council Regulation (EC) 44/2001 the Supreme Court reaches the conclusion that the employee can claim against his dismissal either before the Irish or the Norwegian Courts.

The Court further explains that the fact that Ryanair Limited has a base at Madrid airport is not enough to give jurisdiction to the Spanish Courts since such base cannot be considered as a corporate domicile for these purposes, especially when it is clear in the present case that the company has its corporate domicile in another Member State.

Finally, it is worth mentioning that the Supreme Court also analyzes the exclusive jurisdiction clause included in the employment contract. However, it deems that the clause does not apply in this controversy due to the fact that it does not comply with the requirements of Regulation 44/2001 and the European Court of Justice. This is because the clause was drafted prior to the start of the controversy and did not provide any additional jurisdiction other than the jurisdiction of the Irish Courts which derived automatically from the Regulation.

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