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 1”) 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. [footnote 29] 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. Adoption of a common corpus of unified legal rules, regulating in an identical manner conflicts of national standards relevant to the substantive law of contractual obligations would increase legal certainty in binding relations and would contribute to improving the protection of vested rights in matters subjected to the

regulation by private law. Legislative work aimed at the unification of conflict of law rules were initiated by the authorities of the Member States of the EEC and the EEC

Commission, for representatives of these institutions and legal experts were aware that work on the unification of private international law would have acted faster than the national unification of substantive laws. The scope of work undertaken to merge six separate systems of private international law is much smaller than the unification of the different systems of substantive law. Internal standards of private international law rules govern only conflicts of law.

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In addition, determinants used for resolving conflicts of national substantive law that could apply to legal relationships involving a foreign element, developed in the Convention can be used in a variety of binding relations of the various national systems of substantive law including employment law, civil law, family law and commercial law. The Rome Convention was adopted in order to allow free circulation of law within the common market for all its subjects. The beneficiaries of the Convention in the labour relations were to be both workers and employers remaining in labour relations, in which there are foreign elements.

The systematic dismantling of economic barriers to legal transactions in the common market meant that there was a need to regulate conflicts of uniform substantive law, which could be used in legal relations involving a foreign element, among other things, not to

encourage the parties to these relations to be subject to litigation under judicial court decisions, which in the opinion of the parties provide the quickest and best solution to the dispute. Preparation of the Rome Convention was adopted after the passing on

September 27, 1968 of the Brussels Convention on Jurisdiction, Recognition and

Enforcement of Judgements in Civil and Commercial Matters. [footnote 30] The Brussels Convention allowed the parties to contractual relations to choose the court for their matters to be heard in. Initiating legislative work on the Rome Convention aimed to develop an international legal act, which required all judicial authorities in the Member States of the EEC to use the same rules for selecting an appropriate national system of substantive law.

Allowing the parties in legal relationships to choose a forum where the dispute would be heard, the authors of the Rome Convention tried to avoid for the differences in the content of substantive law not to influence the parties when deciding on the appropriate court.

Such differences could impact on legal relations involving an international element.

Standing in the way of finding the best possible system of substantive law, as defined by the authors of the report on the application of the law applicable to contractual obligations as “forum shopping,” would ensure greater transparency, predictability and stability of the legal market in the common market. According to M. Giuliano and P. Legarde, those involved in legislative work, which led to the adoption of the Rome Convention, were guided by three objectives. [footnote 31] The first one was to achieve rapid establishment of uniform rules for the choice of a national system of substantive law, which would be used to regulate binding labour relations, in which there are foreign elements. The Commission experts who called upon the authorities of the six Member States were fully aware that the legislative work aimed at unifying the various national systems of

substantive law was too ambitious an aim, and would consume too much time. Rightly so it was thought that it would be easier and quicker to harmonise the internal rules of private international law, even if it was based on the necessity to replace the six national systems of private international law into one common international treaty.

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Private international law as a system of law, determined by the legal term “law standards”

was a branch of the law which had smaller traditions of the different systems of private law, used to regulate labour relations, civil, family and business. According to the principle of territoriality underlying the application of various systems of substantive law, the

authorities of individual states applied their own law to regulate social relations, work-related, trade, civil and family issues. Internal conflict of law standards were introduced

later. They did not remain dependent on the cultural, civil, social and economic conditions, in which remain the provisions of the various branches of substantive law. So it was easier to depart from the principle of territoriality in legal relations in which there are foreign elements, especially if it is clear that this principle must also waive other countries included in the same international organisation coming into life, with a view to facilitate free

movement of goods, and then services and people. Instead, efforts to harmonise the various national systems of substantive law, the authorities of the Member States and institutions of the EEC began the legislative process that led to the establishment of the European Union under the current system of uniform private international law.

The second objective was to ensure legal certainty as the most important for the development of a common market in binding relations involving a foreign element.

Although at the time of initiating legislative work, which led to the adoption of the Rome Convention, the European Economic Community did not provide full freedom of movement for workers. Binding labour relations were recognised by the authorities of the Member States and EC institutions as important functions to the life of the common European market. Over time, the importance of legal regulation of social issues within the European Community and the European Union has increased. Because the perception of the

European Union has developed not only as a single market, but also as a European social sphere, European labour law and social security has also gained in importance. The regulation of Article 6 of the Rome Convention concerning the conflict of substantive labour law, shows that labour relations were perceived by the promoters of the first uniform system of private international law as important for the functioning of the common

European market.

The Commission preparing the draft of the Rome Convention had the imagination and showed a concern for protecting the rights and interests of workers. As a third reason for which the Commission deemed necessary to enact uniform provisions regulating conflicts of binding norms of substantive law, it listed actions taken to create and strengthen social cohesion within the European Economic Community. The authors reporting on the

Convention on the law applicable to contractual obligations, did not fully recognise the importance of the Rome Convention for achieving the most important, from the perspective of labour law, legislative work undertaken in the late 60s, which led to the creation of Europe’s social sphere as it cared for social security entitlements, known as the “European social model.”

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Uniform conflict of laws standards laid down in the Rome Convention, in binding labour relations, prevent domestic and foreign employers employing workers, with the presence of foreign elements, to submit the legal relations to undergo regulations other than those of the Rome Convention on the internal rules of private international law. After the ratification of the Rome Convention by the authorities of all Member States of the European Union, and then after the transformation of the Convention on the Regulation No. 593/2008 on the law applicable to contractual obligations in the Member States, conflict of law issues will no longer be regulated by national rules of private international law. Employers from EU Member States, established in other EU Member States have a limited choice of other substantive provisions of national labour law, other than the labour law of one of the Member States. Only in the case of employment of workers who are nationals of third countries in a Member State, other than the country whose provisions apply to activities carried out by the employer or from a country not included in the EU, there would exist possibilities to have labour relations with a foreign element to be regulated by the national system of substantive labour law of another country than a Member State of the European Union.

The Rome Convention prevents the parties in contractual relations with a foreign element, to make, directly or indirectly, a suitable choice of appropriate substantive law of another country, other than those which will be indicated based on the conflict of law rules laid down by its provisions. This principle of exclusivity in resolving a conflict of substantive law, according to other rules than those which were formulated in the Rome Convention, was phrased indirectly in the provision of Article 15, excluding the reference standard to another system of private international law (exclusion of renvoi). The exclusion of passing on the relation to another internal system of private international law regarded as the law applicable to the country, is based on either the selection or indication of the conflict of law rules of private international law, which are stipulated in the Rome Convention as

substantive provisions. Article 15 of the Rome Convention expressly excludes the

application of national rules of private international law. [footnote 32] Parties to contractual obligations have a limited right to choose or indicate on the basis of determinants listed in the Rome Convention an applicable law regulating the legal relations in which there are foreign elements present. They can only select a national system of substantive law:

labour, civil, family or commercial. Reference to other national systems of substantive law is also excluded when the contractual relationship would not benefit from the powers referred to in Article 3 of the Rome Convention and if the parties have not chosen the appropriate law. [footnote 33]

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In this case, the contract shall be regulated by the nation system with which the contract is most closely connected (Article 4, paragraph 1). Article 4, paragraph 2 of the Rome

Convention establishes a legal presumption that a contract involving a foreign element is most closely connected with the country in which the party, either has to carry out the performance where there is the usual place of residence, or – in the case of a company or a legal person – where it has its head office. Article 4, paragraphs 1 and 2 of the Rome Convention connect the liability associated with an international element to the national system of substantive law. The court hearing claims arising from such a legal relationship, is obligated to apply these provisions, even if they include a standard referring to the system of another country. A necessary condition for the application of domestic

substantive laws in force in a country with which agreement containing foreign elements is most closely connected to, regulate this kind of relationship according to the provisions of the national system of substantive law, which was indicated by the Rome Convention as the applicable law.

In matters relating to the regulation of labour relations there is no chance that a country with which the contract of employment with a foreign element has the closest connection to, would allow for use of provisions of substantive labour law of another country.

Therefore, even if the substantive provisions of national labour law, with whom a contract of employment with an international element is most closely connected to, two separate standards of regulation shall apply: one to labour relations, where there are no foreign elements, and the other where there is foreign element present, referring to labour laws of another State. A prohibition on referring to another State made in the Rome Convention requires the judicial authority to rule in matters of employment with a foreign element to be used in the legal relations of the provisions which apply to labour relations without a

foreign element.

After several months of work, during the next meeting of the Committee of Experts on October 20-22, 1969 it was agreed almost unanimously that it is possible to achieve unification of private international law within the European Economic Community.

Opposition to such unification was posed by Germany. The reason for these objections were concerns about the necessity of the withdrawal by the judicature and doctrine of German international private law from the principle of the binding legal relations in Germany and German law extensions of these regulations based on national emission theory to legal relations pursued abroad by persons subject to German law. The

Commission established the scope for the unification of national systems of private international law.

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The Commission found that firstly in the unification process, the internal rules of private international law are to apply to solve the conflicts of law in cases involving property rights, obligations under contracts and other events, methods and evidence used to confirm the commitments and policy issues, such as legal capacity, means of representation of parties involved in legal transactions, maintenance of acquired rights, and the application of public order. [footnote 34] Behind the legal basis for legislative work towards the unification of private international, the law Committee adopted a provision Article 220 of the Treaty of Rome (Article 293 of the Treaty of Amsterdam). This provision in the first paragraph requires the authorities of the Member States of the European Communities to undertake negotiations on all matters to ensure the protection of its own citizens and to protect their rights and entitlements under such conditions as those which are provided in each

Member States for its own citizens. The principle of equal treatment of nationals of Member States of the European Communities and not to make any difference between them on matters relating to the protection of their rights by reason of nationality, is stipulated in the said provision. This rule has been modified in Article 8 of the Lisbon Treaty, the standard requiring the EU to respect the principle of equal treatment of its citizens. European Union citizenship is a derivative term of the nationality of EU Member States. In Article 8, in fine, the Lisbon Treaty clearly states that European Union citizenship does not replace national citizenship. In the literature on European law discussing

European Union citizenship and the relationship of citizenship to the citizenship of the EU Member States are subject to change. First, lawyers involved in European law thought that the concept that a single European Union citizenship did not exist. [footnote 35] Then they were of the view that European Union citizenship is a confirmation of the right to enter the job market in each Member State, “the market citizen.” [footnote 36] In the end they came to the conclusion that European Union citizenship guarantees the use of political and civil rights set out in the Lisbon Treaty in Article 18 to Article 22 [footnote 37] (freedom of movement – Article 18, former Article 8a, active and passive electoral rights, namely the right to participate in elections to the European Parliament, local elections – Article 19, formerly Article 8b, providing diplomatic and consular protection in a third country – Article 20, formerly Article 8c, and the right to petition the European Parliament and the right to request the Ombudsman – Article 21, formerly Article 8d).

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The Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, December 13, 2007 (OJ of 2009, No. 203, item 1569)

guarantees equality to citizens. An EU citizen is any person “holding the nationality of a Member State.” Citizenship of the Union shall be additional to the nationality of EU

Member States and does not replace the said nationality (Article 8). According to lawyers who specialise in the European law, the concept of “EU citizenship” can now not only be associated with the common market, the freedom of movement of people and goods and services, but with the single legal status of individuals – citizens of EU Member States and with the civil rights arising from it, “the union citizen. [footnote 38 ]” Adopting “policies” as a decisive indicator for the analysis of the concept of European Union citizenship does not state whether the European Union citizenship guarantees the protection of fundamental rights on equal terms to citizens of EU Member States. Finding that having a European Union citizenship enables EU citizens to benefit on an equal footing with all laws does not solve the problem discussed in the latter part of this piece. The scope of use of social rights is in fact dependent on the granting of these powers. Several years ago it was clearly stated that the contemporary law of international organisations – the predecessor of today’s European Union does not guarantee social rights to either the poor, or to those who are, as classified by experts in the field of social policy, in “marginalised

communities.” [footnote 39 ] Since that time, the European social law has not undergone significant changes. I share the sentiment expressed in legal literature that the basic social rights, recognised as fundamental human rights, are not considered by the primary

Community law as an important element of European Union citizenship. [footnote 40 ] Article 6, paragraph 1 of the Treaty on European Union (formerly Article F), as amended by the Lisbon Treaty contains a declaration that the European Union recognises the rights and freedoms set out in the Charter of Fundamental Rights of the EU adapted on the December 12, 2007 in Strasbourg. This provision also emphasizes that the provisions of

Community law as an important element of European Union citizenship. [footnote 40 ] Article 6, paragraph 1 of the Treaty on European Union (formerly Article F), as amended by the Lisbon Treaty contains a declaration that the European Union recognises the rights and freedoms set out in the Charter of Fundamental Rights of the EU adapted on the December 12, 2007 in Strasbourg. This provision also emphasizes that the provisions of