International Jurisdiction Wars In A Post-Brexit And Post-COVID-19 World

• Published date: 18 July 2023
• Subject Matter: Employment and HR, Contract of Employment, Discrimination, Disability & Sexual Harassment, Unfair/ Wrongful Dismissal
• Law Firm: Gowling WLG
• Author: Mr Jonathan Chamberlain and Connie Cliff

Businesses operating in a global market are likely to have employees, including very senior employees, based in various countries around the world. Following the COVID-19 pandemic, added to the mix is an increased trend towards "officeless" remote working. Many employees are now taking advantage of the ability to work from anywhere in the world.

Where a contract of employment states that the law of a certain country is to apply (choice of law clause), it often also purports to confer jurisdiction on the courts of the same country to resolve any disputes relating to the contract (jurisdiction clause). But is an exclusive jurisdiction clause worth the paper it is written on where the employee is domiciled in the United Kingdom? Not really.

In a judgment dated 29 June 2023, the English Commercial Court confirmed that like the pre-Brexit position, post-Brexit an exclusive jurisdiction clause in a contract related to employment in favour of the employer's (or in some cases the employer's parent company's) home state/country will not be enough to oust the jurisdiction of the employee's home country's courts:

"In matters relating to individual contracts of employment ...If the employee is domiciled in the United Kingdom, the employer may only sue the employee in the part of the United Kingdom in which the employee is domiciled (regardless of the domicile of the employer)."

Pre'Brexit forum conveniens

Pre-Brexit (on or before 31 December 2020) the Recast Brussels Regulation, which continues to apply in EU member states, limits where an employer can bring proceedings against an employee from an EU member state. Conversely, it expands where an employee can bring proceedings against their employer:

"In matters relating to individual contracts of employment":

1. An employee can only be sued by an employer in the courts of the EU member state in which they are domiciled. Whether or not the employer is domiciled in an EU member state is irrelevant.
2. An employer domiciled in an EU member state (including deemed domicile by virtue of a branch, agency or other establishment) may be sued in the courts of the EU member state in which it is domiciled.
3. An employer not domiciled in an EU member state, may be sued in the court of the EU member state where (or from where) the employee habitually carries out his work or the place where the business that engaged the employee is situated.

If an EU domiciled employee is sued in relation to a matter concerning an individual contract of employment, in some other, non-EU jurisdiction, the courts of the EU member state (subject to local laws) has the power to grant an anti-suit injunction.

Post- Brexit forum conveniens

Has Brexit substantially changed this position for employees domiciled in the United Kingdom? Well no, if anything there is even further scope for anti-suit injunctions than previously.

While the United Kingdom is no longer within the ambit of the Recast Brussels Regulation, its...