Law Applicable to International Employment Contracts: The Case of an Expatriate Employee in France

Are you an employee of a foreign company but have been working for years from your home in Trappes or in an office in Mantes-la-Jolie? A question bothers you: in the event of a dispute with your employer, which law applies? French law or the law of the company's country? This is exactly the question that arose in a case decided by the Cour de cassation in 1996, the answer to which is still relevant today.

A Lebanese employee, hired by a Lebanese airline, worked successively in Lebanon, the Netherlands, and then in France for more than ten years. Dismissed, he challenged his dismissal before the French courts. The central question: could French law apply?

The Cour de cassation confirmed that yes, as long as the contract is performed stably and durably in France, French law applies, even if no clause provides for it. This decision is a safeguard for thousands of expatriate or seconded employees.

The Facts: A Story Like Many Happen Every Day

Mr X, of Lebanese nationality, was recruited in 1974 by Mediterranean Airways, a company incorporated under Lebanese law. He started as a sales representative in Beirut. In November 1974, he was appointed director of the company's Paris branch. His work took him to Paris, then Amsterdam, then back to Paris from 1974. For more than ten years, he performed his duties in France, where he was even registered in the commercial register as a representative of the French branch.

In 1985, he was dismissed. Mr X considered his dismissal to be without real and serious cause and brought the matter before the Conseil de prud'hommes of Paris. Mediterranean Airways disputed the jurisdiction of the French courts and the application of French law, arguing that the contract was signed in Lebanon and the employer was Lebanese.

The Conseil de prud'hommes, then the Paris Court of Appeal, declared themselves competent and applied French law. The company appealed to the Cour de cassation. The Cour de cassation dismissed the appeal and upheld the Court of Appeal's decision.

The Reasoning of the Court — Analysed

The Cour de cassation relied on the principles of private international law, and more specifically on the 1980 Rome Convention on the law applicable to contractual obligations (now replaced by the Rome I Regulation). Article 3 of this Convention establishes the principle of freedom of the parties to choose the applicable law. But in the absence of choice, Article 4 provides that the contract is governed by the law of the country with which it is most closely connected.

In matters of employment contracts, the closest connection is presumed to be the law of the country where the employee habitually performs his work. This is what the Court of Appeal held. The judges noted that Mr X had worked in France stably and durably for more than ten years, that he was registered in the commercial register, and that the French branch was his main place of work. They concluded that the contract had the closest connection with France, and therefore French law was applicable.

In other words, it is not the place of signature of the contract or the nationality of the employer that matters, but rather the place where the work is actually and mainly performed. The Cour de cassation validates this reasoning: it considers that the Court of Appeal legally justified its decision. Be careful, however: this solution requires stable and durable performance. A mere temporary assignment would not suffice.

What This Means for You — Practically

For employees: if you work in France habitually, even for a foreign employer, you benefit from the protection of French employment law. This means that the rules on dismissal, paid leave, minimum wage, working time, etc., apply. Example: an employee working from his home in Trappes for an American company, without a choice-of-law clause, can rely on French law in the event of a dispute.

For employers: be careful not to circumvent French law by imposing a foreign law. If the employee works in France stably, French law applies, even if the contract provides for another law. A contrary clause could be set aside as abusive. For example, a company based in Mantes-la-Jolie that hires an employee to work in France but subjects the contract to Lebanese law would see that clause annulled.

What few people know: this solution also applies to posted workers, but under certain conditions. Secondment is temporary by nature; if the duration exceeds a few months, the connection with France strengthens and French law may become applicable.

Four Tips to Avoid This Type of Dispute

• For the employee: check your contract. Before signing, make sure the applicable law is mentioned. If not, know that the main place of work will determine the law. In case of doubt, ask for a clause specifying that French law applies if you work in France.
• For the employer: secure your contracts. If you wish to apply a foreign law, ensure that the employee has no stable connection with France. For a long-term expatriate, it is better to provide for the application of French law to avoid surprises.
• Keep evidence of the place of work. Payslips, contracts, correspondence, attendance records: any document showing that the work is performed in France is crucial in the event of a dispute.
• Consult a specialised lawyer. Each situation is unique. An initial analysis helps anticipate risks and draft appropriate clauses.

Further Reading: Related Case Law and Developments

This 1996 decision is part of a consistent line of case law from the Cour de cassation. One can cite a judgment of 20 October 2010 (n° 09-42.322) where the Court held that an employee habitually working in France, even for a foreign employer, benefits from the mandatory provisions of French law, particularly regarding dismissal. The trend is clear: judges protect the employee by guaranteeing the application of the law of the habitual place of work.

Since then, the European Rome I Regulation (No 593/2008) has codified these principles. Article 8 provides that, in the absence of choice, the employment contract is governed by the law of the country where the employee habitually carries out his work. The 1996 decision therefore remains perfectly relevant.

For the future, expect judges to be increasingly attentive to the reality of the place of work, especially with the development of teleworking. An employee who works from his home in France for a foreign company may very well claim the application of French law.

Checklist Before Taking Action

FAQ

1. My contract provides for Lebanese law, but I have been working in France for 5 years. Which law applies? French law. The choice-of-law clause may be disregarded if it deprives the employee of the protection that the law of the habitual place of work would afford.
2. Can I bring a claim before the French Labour Court (Conseil de prud'hommes) if my employer is foreign? Yes, if your habitual place of work is in France. The Labour Court of the place of work has jurisdiction.
3. What are the time limits for taking action? In dismissal matters, you have 12 months from the notification of the dismissal to bring a claim before the Labour Court. For other disputes (salary, etc.), the limitation period is 3 years.
4. What should I do if my employer does not respect French law (e.g., no paid leave)? Gather evidence (contract, payslips, emails) and consult a lawyer. You can request the application of French law before the courts.
5. Does teleworking from France for a foreign company fall within this scope? Yes, if the teleworking is habitual and stable, French law applies. Case law is evolving in this direction.

Are you in a similar situation? An initial 30-minute consultation with Maître Zakine (€45) could save you months of proceedings — and often much more. Book an appointment →