In the beginning of this year the Supreme Court of Estonia adjudicated on a matter which changes the current understanding about the law applicable to employees who are dispatched abroad. According to the decision it may be necessary to apply the law and working conditions of another country even in cases where the applicable law is established by the employment contract. Therefore we advise employees, who have to stay abroad frequently due to the nature of their work, to verify whether the applicable law is foreign or not.
The decision of the Supreme Court of Estonia refers to earlier decisions of the European Court of Justice. The referred cases suggest that if the employee works in several countries then the main place of work must be determined. In addition the following aspects must be taken into consideration: the state from which the employee receives directions, where the work is being organized and where is the equipment located. This kind of interpretation usually excludes the possibility that in the case of short business trips the need to apply the law of the foreign country arises.However, it should be noted that in the situation, where employees have a closer connection with a foreign country or they have indeed been hired with the intention of the actual place of work to be located in a foreign country, the law of that country must be applied. This also includes an obligation to pay a minimum wage applicable in that foreign country and to follow other relevant working conditions of that country.