Introduction

The draft Regulation No. 864/2007 of the European Parliament and Council Regulation on the law applicable to non-contractual obligations (“Rome II”) was presented by the European Commission on July 22, 2003. It was supplemented on February 21, 2006. Adopted on July 11, 2007 the Regulation supplemented the Rome Convention, which governs the conflicts of the law applicable to contractual obligations. Regulation No. 864/2004 is used to resolve a conflict of law applicable to non-contractual obligations. The preamble to the Regulation states that the law of the Member States defines the concept of different non-contractual obligations. For this reason, in the preamble to the Regulation it was stated that non-contractual obligation should be understood as an autonomous concept. In Article 2, paragraph 1 of the Regulation it is evident that the concept of non-contractual obligations concerns any legal consequences arising from tort, unjust enrichment, conduct gestio or culpa in contrahendo. The Regulation applies not only to damages resulting from the events referred to in Article 2, paragraph 1, but also to non-contractual obligations, which are likely to result in damages (Article 2, paragraph 2). paragraph 1 states that the Regulation be applicable to non-contractual obligations in civil and commercial matters related to the law of different countries. It does not apply it to taxes, customs or administrative matters or state liability for acts and omissions in the exercise of public authority (acta jure imperii).

Preparation of the Rome Convention

With an initiative to draft a convention regulating conflicts of norms of substantive law relevant to contractual obligations, was requested by the authorities of the Benelux. On August 8, 1967, the permanent representative of Belgium, acting on the authority of Belgium, Luxembourg and the Netherlands provided the Commission with the European Economic Community draft convention on the law applicable to contractual obligations with the proposed establishment of a commission of experts – representatives of other Member States of the EEC to take legislative work aimed at unification of different national rules of international private law. The opening meeting of the legislative work that led to the adoption of the Rome Convention (“Rome I”) was held on February 26–28, 1969. In his opening speech, Chairman of the Governmental Experts T. Vogelaar, Director-General of the Commission on the common market and the adoption of the national laws of the Member States of the EEC, specified targets that should be implemented by the Convention. In his opinion, the draft convention was to lead to full unification of conflict of law rules within the common market. The same conflict of law rules applicable to conflict resolution of the substantive rules relating to the obligations under the contract should be valid in six Member States of the EEC, not only in their mutual relations, but also the legal relations with third countries.

It is generally accepted that private international law is a branch of national (internal) law, which governs conflicts between rules of substantive law that should be used for the evaluation of social relations shaped by such laws and procedures. In the case of labour law, the subject of private international labour law are standards, which allow to select and apply labour law standards of particular Member States to assess the legal positions of parties within legal relations regulated by employment law (workers, employers) and social security law (the insured, policyholders and insurers). Labour and social security law is a branch capable of a certain reach only. Within the vast majority of countries, labour and social rights are governed by one system of labour law and one system of social security law. Occasionally, the federal states in their various organisational units, which make up the federation (states, provinces, regions, republics), have within their structure two separate systems of law both for labour and for social security. Establishing a work relationship between parties, of which at least one of the parties comes under the regulations of another member state, either on the grounds of nationality (lex patriae), or residence – domicile (employee, insured) (lex domicilii), or because of the location of the headquarters – situs (employer, insurer, the insurer – the insurance) (lex rei sitae), makes regulation necessary of the content of legal relations governed by different national systems of labour and social security law.

General principles

Article 11, paragraph 1 of Regulation No. 883/2004 as a basic principle uses the legislation of only one Member State when applying to the laws to an insured person. The applicable national social security legislation applicable to the insured is indicated by using determinants listed in Title II, “Determination of the applicable legislation” of the regulation (Article 11–Article 16). Under the provisions of Article 12–Article 16 of the Regulation:

– persons in a Member State carrying out employment or self-employment are subject to national social security law in force in the country in which the work is carried out. The law applicable to the social security of the persons (lex securitatis) are the provisions of creating the insurance status in the workplace (lex loci laboris) (Article 11, paragraph 3, point “a”);

– civil servants subject to the legislation of a Member State to which the administration employing them is subjected to (Article 11, paragraph 3, point “b”). If a civil servant carries out business in another Member State, the competent social security institution informs the pre-designated institution in that Member State (Article 15 of the Implementing Regulation No. 987/2009). Used in Article 15 of the Implementing Regulation No. 987/2009 are the terms “competent institution” and “designated institution,” which are defined in the glossary of legal terms set out in Article 1 of Regulation No. 883/2004.

Regulation No. 864/2007 on the law applicable to non-contractual obligations (“Rome II”) allows parties, a person or entity who is liable in tort and the victim, to conclude an agreement to submit the non-contractual obligation to the chosen national system of substantive law (Article 14, paragraph 1). Because the agreement can be concluded by the parties to a non-contractual obligation arising out of tort, therefore it should be obvious that before the creation of such a relationship there is no basis to conclude an agreement on the selection of applicable law. However, in Article 14, paragraph 1, point “a” of the Regulation, the right of the parties to submit the non-contractual obligations to the law chosen by the parties after the event causing the damage has occurred, has been limited. For the reasons given above, this claim would not be necessary if, in Article 14, paragraph 1, point “b” of the Regulation it was not decided that in the event of a non-contractual obligation between the parties engaged in economic activities it is permissible to conclude such an agreement and prior to the event causing the damage. Article 14, paragraph 1, point “b” does not apply to individual labour relations, because the employee acting as a party to a non-contractual obligation is not engaged in economic activity.

With the exception of social security law, which includes separate standards coordinating national systems of social security law of the Member States of the European Union, the conflicts of substantive labour laws have been – and still are – regulated by internal and international rules of private international law. The need to adopt separate standards of private international labour law has been acknowledged by the institutions in a few years after the adoption of Regulation No. 1612/68, Council Directive No. 68/360 – international treaties, adopted on October 15, 1968, guaranteeing employees the freedom of movement within the then European Economic Community. In order to repeal the legal barriers to the free movement of persons within the common market on the June 14, 1971 Regulation No. 1408/71 was issued for coordinating national social security systems. The freedom of movement in order to take up employment under an employment relationship or business self-employment has increased with the adoption of directives to ensure the freedom of transferring capital to entrepreneurs, technology and staff within the common market within the economic freedom to provide services and the posting of workers to temporarily perform the work in another Member State. The Commission quickly recognised that the free movement of people (workers, employers, job seekers) between the borders of the Member States of the international regional organisation in Europe called the European Economic Community, leads to a situation whereby the local labour market (“intra-Community employment relationships”), located within the administrative borders of the Member States, in which different national systems of labour law relations exist, where employers are established in different Member States and the workers are nationals of various countries, are all governed by separate provisions of labour law.

Directive 2009/38/EC of the European Parliament and of the Council on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) entered into force 20 days following its publication in the Official Journal of the EU of May 16, 2009 (Article 18). It is to be implemented in the internal order of labour law of the EU Member States no later than June 5, 2011. Article 16 of the Directive in question obliges the authorities of EU Member States to implement the Directive by way of bringing into force laws, regulations and administrative provisions necessary to comply with its provisions. The authorities of the EU Member States may entrust the obligation to bring the Directive into force to the social partners. Nevertheless, they must ensure that no later than on June 5, 2011 the social partners negotiate and sign collective bargaining agreements which are generally applicable in a given Member State and whose provisions would implement the provisions of Directive 2009/38/EC in the national system of labour law.

Directive 2009/38/EC introduces a number of changes in the European standards laid down in Directive 94/45/EC. Its purpose is to raise the level of the rights to information and consultation of employees employed in European work establishments. Directive 2009/38/EC is without prejudice to the basic rights of employees of the European Union.

European legislation governing the social security rules and procedures for implementing national systems of social security laws for the insured persons (employees, the self-employed and their families), moving within the European Union. The EU legislature provides the rules of European social security law, which coordinate the different national social security schemes, in order not to deprive any person entitled to benefits of social security under the rule of any national legal system of social security entitlements to benefits, to protect the rights acquired and ensure that the insured persons applying for benefits from another Member State receive equal treatment with the nationals of that Member State and to prevent the accumulation of social security benefits because of this reason. European social security law governing therefore conflicts of law of national social security legislation, using the method of coordination as a technique which allows for the adaptation of separate legislation in social security relations, in which there are foreign elements. The legal standards used to coordinate the foreign social security systems of EU Member States do not differ from the standards used to regulate the substantive conflicts of labour enforced in various countries. In the case of coordination and conflict laws, the determinants used in the provisions of private international labour law suggest appropriate systems of substantive law that should be used by the parties in legal relationships involving a foreign element, and by bodies applying the law.

Unfair competition

Acts of unfair competition are governed by national legislation. Subjects capable of committing such acts are generally individuals or entities engaged in economic activity, service or business. In matters regulated by individual labour law employees, acting on their own behalf may behave in such a way that their action or inaction may be regarded as an act of unfair competition. According to Polish legislation, the Act of April 16, 1993 on Unfair Competition, states that an employee may commit acts of unfair competition, passing, disclosing or using someone else's trade secrets (Article 11 of the Unfair Competition Act), urging other workers to non-performance or improper performance of work duties (Article 12 of the Act) or disseminating false or misleading information about their employer (Article 14 of the Act). Assessing whether the acts committed by an employee may be treated as acts of unfair competition and assessing the legal consequences of acts committed in individual employment relationships involving an international element, are dealt with in Article 6 of Regulation No. 864/2007, which lists the determinants indicating the relevant national substantive labour law system of the country in which the unfair competition occurred, or there is likelihood the breach will occur. In matters relating to the regulation of the conflict rules of substantive laws, applicable to cases of unfair competition, the general principle expressed in Article 4, paragraph 1 of Regulation No. 864/2007 applies, reproduced in Article 6, paragraph 1 of the said Regulation.

Persons covered

Regulation No. 883/2004 applies to nationals of Member States, stateless persons and refugees residing in the Member States who are or have been subject to social security laws of one or more Member States. It also applies to family members of such persons (Article 2, paragraph 1). In addition, the aforementioned Regulation applies to survivors of deceased to the persons who are subject to social security legislation of one, two or more EU Member States (citizens, stateless persons or refugees) (Article 2, paragraph 2). A necessary condition for the application of Regulation No. 883/2004 for these persons is to remain in their employment relationship in a Member State, in business activity, trade or service or reside in the territory of a Member State. The last requirement shall be deemed satisfied if the rules of the social security legislation of a Member State, where the insured person lived and whereby this period of residence is amalgamated by the state into the period of social security cover. Since the coordinating laws of national social security regulations make social security benefits dependent upon the condition of employment (or self-employment) or residence in a Member State, Title I of Regulation No. 883/2004, therefore contains the definitions of “paid work,” “self-employment,” “insured,” “family member,” “period of insurance,” and “usual residence.” Autonomous definitions of the Regulation in the analysis are not exhaustive.

The European Union as an area of freedom, security and justice has created a community which adheres to unified laws. In matters regulated by labour law (individual and collective) as well as social security law, the above aim may be met by introducing unified regulations, allowing for identical ways of resolving conflicts of labour law issued in work relations where there is a foreign element present. In order to assure the legal stability within work relations, national regulations concerning international private labour law had to be replaced by unified conflicts of law norms. These norms are then to be applied by both employees and employers of EU member states as well as applied in work relations situations (individual or collective) where there are third parties involved. EU private international law is a collection of international private labour law regulations issued by EU institutions, which unanimously and in a unifying fashion describe the legal situations of the parties to a work relationship, where there is a foreign element present, allowing for the application of foreign laws based on citizenship, residency, where the headquarters of one of the parties is located, where the work is carried out or where the action has taken place (e.g. the place of the work related accident).

The conflict rule included in Article 9 of Regulation No. 864/2007 regulates the collisions of national collective labour laws only in matters relating to the liability of individuals (workers, employers) participating in collective actions, in connection with the initiated or planned industrial action. The provision contains a determinant to indicate the relevant provisions of the collective labour law, which govern the responsibility of the organisation representing the professional interests of the parties to the collective dispute for damage caused by a planned or carried out collective labour dispute. The law applicable to assess the legal implications of the effects of intentional and/or carried out collective action is the collective labour law of the Member State in which the industrial action was initiated or had been announced. It should be noted that Article 9 of this regulation has applied the formula used in Article 4, paragraph 2 of this Regulation, defining the relationship between the general principle of liability for the obligations arising out of non-contractual agreements and the exceptions to the rule under which the applicable law is lex loci damni (Article 4, paragraph 1). In the event of any liability of the participants of a collective dispute, Article 9 of the Regulation No. 864/2007 in fine states as an appropriate collective labour law of the Member State in which the action is to be or has been taken.