Mandatory rules

Article 7 of the Rome Convention defines two types of necessary standards – overriding mandatory rules. In Article 7, paragraph 1 of the Convention it is stated that national legislation can be granted the status of mandatory rules, when the authorities of a particular country with which the facts of the case governed by the individual contract, including the employment contract, have a close relationship. These are provisions by which the authorities of that country give mandatory rules the necessary character, making them effective in respect of all or specified contracts, which show a close relationship with the country concerned. Applying national mandatory provisions shall be at the level of decisions taken by the authorities of a particular Member State, which has close ties with the contract, in which there are foreign elements. Article 7, paragraph 1 of the Rome Convention is the conflict norm, which grants full rights associated with substantive decision-making to the transmission status to the mandatory provisions of applicable substantive law in force in the country. Depending on the decision of the authorities, this status may be granted to some or even all the rules governing the relationship of

obligations involving a foreign element. At the international level there are no restrictions on the granting of such status. However, granting the mandatory standards a legal

character, applying this to all the mandatory rules or a large part of them, has a significant impact on reducing opportunities for specific national systems of substantive law governing

the relationship of obligations involving an international element, as part of those relationships will be less interested in locating the place of work under a contractual employment relationship subjected to national regulations of state labour laws in country B, which the authorities considered all the national labour law standards as necessary.

The basic principle of mandatory rules is to apply these rules to the contractual relations subject to foreign law when in fact the contract is closely connected with the proper law of contract of another country. [footnote 142 ] For clarity, the matter should be stressed that this is not the Rome Convention, Article 7, paragraph 1 that states the national laws of the national system of substantive law issued by the country to regulate certain contractual relations are the mandatory provisions. Article 7, paragraph 1 of the Convention confers a carte blanche to the authorities of individual states that have ratified the rules governing conflict of laws rules of substantive law applicable to obligatory relations to determine the extent of binding rules that are deemed mandatory provisions.

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In this provision were formulated in a general way the criteria for making that decision.

Authorities of individual countries in deciding to grant the necessary nature of mandatory provisions apply to take into account the nature and purpose of those provisions and legal consequences of their use. The criteria set out in Article 7, paragraph 1 of the Rome Convention are not clear. However, they allow the possibility of becoming acquainted with the basic principles of national standards to give the legal nature of the standards required.

Firstly, the directives formulated in this provision can conclude that there should be appropriate provisions, which were not considered mandatory standards by the national substantive law. Secondly, the authorities of a specific country may not give the status of necessary standards in the country recognised as mandatory, if universally applicable international standards do not consider the rules governing certain institutions of labour law or workers’ fundamental rights protection as the mandatory standard. The rules of public international law operate according to the concept of workers’ rights. These are the basic workers’ rights and social rights protected by international labour and social security, which, because of protected rights (the right to work, the right to strike, the right to social security) are included within the category of fundamental human rights. They enjoy the same legal protection afforded by rules of public international law work. Thirdly, the

category of necessary standards could be included in the national labour laws that protect the good of the highest order, such as for example: freedom of work and the associated protection of the life of the employment relationship, equal treatment in labour relations,

dignity and fair wages, freedom of association of workers and their right to participate in collective actions, the right to social security benefits. The last factor that should be taken into account by the authorities of a Member State before taking a decision on the status of the selected standards considered as necessary, the most important national labour laws should consider the consequences of taking or not taking a decision on the identifying national mandatory rules as necessary and therefore being placed in the category of mandatory provisions. The decision to apply the mandatory provisions should be taken wisely. The specific nature of the necessary standards not only eliminates the relatively current provisions of the relevant national substantive law system, but also all chosen or identified as relevant mandatory provisions. Necessary standards must be assimilated to the rules “of another country with which the situation has a close relationship.” Included in this category they may be classified as either national rules, which were in conflict with the rules chosen by the parties to contractual relationship, as well as those of a third country not listed in the standards of conflict of laws as rules of substantive law that the will of the international legislator should apply in the relations with contracts involving an international element. The only determinant to the decisive use of mandatory provisions under the provisions of a third country, which take precedence over standards selected or identified by using determinants as defined in the Rome Convention is the close relationship of the case with the third country.

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It should be noted that Article 7, paragraph 1 of the Convention does not oblige the courts to evaluate according to the facts of the law of a third country. A relationship with the laws of other country than the one chosen by the parties or designated by the conflict rules does not have to be stronger than that which exists between the standards recognised by the parties or the provisions of the Rome Convention as appropriate for the regulation of a particular contractual relationship. Mandatory provisions must take precedence over other rules recognised by the competent national system of substantive law, even if their

relationship with the facts is just as intense or less intense depending on the obligations determinanting the said contract. Article 7, paragraph 1 of the Rome Convention does not require judicial authorities to make comparisons between the facts and the rules of the selected national system of substantive law. It is a conflict rule of substantive law, granting the authorities a lot of flexibility in decision-making in matters relating to the findings and determining the relationship between the contract and the national substantive law system of any country. The use of standards required is dependent on the free decision of the

court to settle a contested case against the contractual relationship with a foreign element.

Although the application of those standards by the court, after their qualification for the category of necessary standards does not undergo any control, in Article 7, paragraph 2 of the Convention the special position given to the provisions of the lex fori, which, in relation to the specific facts at issue by a court adjudicating necessitate their use. In the report-commentary to the Rome Convention, Article 7, paragraph 2 is not given much attention to. It was noted only that some members of the Committee were interested in granting the law of the country whose courts have jurisdiction to hear contested cases occurring in the contracts involving a foreign element with the legal status of necessary standards.

Comparing the disposition of Article 7, paragraph 1 and Article 7, paragraph 2 of the Rome Convention attention should be paid to the important differences that exist between them.

The requirements set out in Article 7, paragraph 2 of the Convention are positioned below those set out in Article 7, paragraph 1. In the latter provision, the authorities of a Member State may confer the status of the necessary standards only to the mandatory

requirements, while under Article 7, paragraph 2 of the Convention courts fori may be taken as necessary standards and regulations relative to the nature of the standards in force in the country where the dispute is recognised. According to the authors of the report-commentary to the Rome Convention, the difference between the compared provisions is qualitative. Provision of Article 7, paragraph 1 applies to matters relating to the creation of the necessary standards, and Article 7, paragraph 2 regulates the rules for applying the lex fori are treated by law enforcement as the loi d’application immediate.

[footnote 143 ]

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I believe that there are fundamental differences between the compared provisions of Article 7 of the Rome Convention on the sole ground that the necessary standards set out in paragraph 1 of that provision are mandatory and the standards set out in paragraph 2 are any standards, both as jus cogens and jus dispositivi. The difference between these two categories of legal norms stem from the sources which determine how they are to be used, either universally applicable rules of positive law by the state or a social partners’

agreement or consent of the parties to individual contractual relations. Moreover, from the perspective of the courts of both types of legal norms, the courts did not indicate major differences between them. Any legal norms enforced in a Member State must be applied by judicial authorities. Article 7, paragraph 2 of the Rome Convention is thus the norm that specifically protects the interests of the State whose courts rule on disputed matters

arising from contractual relations with a foreign element.

The particular nature of the legal regulations formulated by both of the provisions of Article 7 of the Convention, which is evident in the uncontrolled freedom granted to the national authorities by international legislators, to apply national substantive laws that are more important than that which follows the will of the parties in contractual relations or with the application of certain determinants described in the Rome Convention that makes the authorities of certain European Union member states (Ireland, Luxembourg, Germany, Portugal, UK benefit from the rights guaranteed in Article 22, paragraph 1 of the Rome Convention and reserved the right not to apply Article 7, paragraph 1 of this Convention.