By Winifred E. Campbell, Esq.

Employment and labor disputes in the United States are frequently filed with the U.S. Equal Employment Opportunity Commission (EEOC) and/or heard by an arbitration panel before a lawsuit is ever filed. However, this is not the standard in many nations of the Europe Union (EU). In fact, most countries prohibit arbitration of individual employment contracts altogether. In today’s global marketplace, it is important to recognize that differences exist among countries and employment contracts must reflect these differences.

Ireland
Arbitrations in Ireland are governed by The Arbitration Act 2010 (the Act), which adopts the UNCITRAL Model Law. However, the Act does not apply to employment disputes, including the terms and conditions of employment and discrimination. The Industrial Relations Act 1946, section 70, requires employment-related disputes to be heard by the labor court. The labor court may refer an employment dispute to Arbitration, but only with the consent of all of the parties.

United Kingdom
While arbitration is permitted in certain types of employment disputes, it is not widely used. UK law prohibits arbitrating disputes arising out of certain statutes, such as discrimination claims and unfair dismissal claims. Employment disputes are heard by employment tribunals, for which there are separate tribunals based upon jurisdiction—Scotland, and England and Wales. Recently, in April 2016, the Employment Lawyers’ Association in the UK established an Arbitration and Alternative Dispute Resolution (ADR) group to evaluate greater use of arbitration and ADR in resolving employment-related issues.

France
Arbitration of employment disputes is prohibited. The reasoning is that employees are in a weaker bargaining position against their employers and thus, public policy seeks to protect the employee. Even where employment contracts include an arbitration clause and a valid choice of law clause, the prohibition remains. Employment disputes are resolved by labor courts and governed by the French Labor Code.

Germany
As seen in other EU nations, arbitration of employment disputes is prohibited in Germany except for collective issues. German law distinguishes between employers and trade unions, and employers and individual employees. An arbitration agreement between unions and employers are valid, and governed by the German Labor Court Law. Arbitration agreements in contracts between an employer and employee are invalid. Labor law in Germany is governed by Federal legislation, collective agreements, works agreements, and case law, as opposed to one labor law act.

Italy
Employment disputes in Italy are resolved by labor courts. Special procedural rules apply to employment issues with the intent that submission of written materials is reduced, greater participation by litigants is gained, and the time for trial and ultimate resolution is more expedient. For civil servants, Act 80 of 1998 transferred such disputes from administrative courts to Labor courts. However, the law also requires the parties to attempt to resolve the dispute through conciliation before a public labor office or through a union dispute resolution procedure before going to the court.

Spain
Generally, arbitration is not used in workplace disputes involving an individual employee, but may be used in collective issues and is mandatory in strikes. However, private negotiation of disputes is encouraged, and a process called conciliation must be carried out before Labor Administration Mediation Services prior to seeking redress in the labor court. While the mediation step is required, it is seen as a formality and rarely results in resolution of the matter. Once mediated, employment disputes are submitted to specialized labor courts.

Conclusion
If your employees are situated in one of the EU nations, or you are seeking to establish offices abroad, then you must consider local employment laws and regulations, and enforcement laws in the event a dispute arises. Evaluating these factors before a dispute arises will save money and headaches down the road.