Judgment of the German Federal Labor Court (Bundesarbeitsgericht) and the Greek Debt Crisis

5 AZR 962/13 (A)

The present case concerns the debt crisis in light of which the Greek Republic adopted, for the purposes of protecting the national economy, Law Nr. 3833/2010 on urgent measures to tackle the national finance crisis.

In the proceedings before the court the claimant in this case, a teacher who was working at the elementary school under the patronage of the respondent Greek Republic, demanded additional pay as well as payrolls for the period October 2010 till December 2012. The Greek Republic cut in this period his gross remuneration, which originally followed the German collective bargaining law, with a total of 20.262,31 Euro in connection with Law Nr. 3833/2010 and Nr. 3845/2010. The Greek Republic maintained that it had to comply with the reached agreements between it and the European Commission, the European Central Bank and the International Monetary Fund (the troika) by issuing and adopting those laws and in that case there was no other option.

The Laws Nr. 3833/2010 and Nr. 3845/2010 had a direct effect on the employment relationship with the claimant and led, without any other implementing act, to the reduction of his pay.

For the German Federal Labor Court (Bundesarbeitsgericht) is decisive whether the abovementioned Greek laws are directly or indirectly in any way applicable to the employment relationship in question. It firstly has to be decided, whether the established employment relationship in 1996 which continued until the end of 2012 falls within the scope of Rome-I-Regulation or the old German International Private law (Article 27 (ff) of the Introductory Law to the German Civil Code). In case Article 9 of the Rome-I-Regulation applies, there is a need for clarification of the meaning and scope of the exemption clause in Article 9 (3) of the Rome-I-Regulation.

There is also a need for interpretation of Article 4 (3) of the TEU and the anchored principle of sincere cooperation between the Member States in application of overriding mandatory provisions of other Member States.  For this reason the Federal Labor Court (Bundesarbeitsgericht) made a reference for a preliminary ruling to the CJEU.

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