Validity of the International Mobility Agreement under Romanian Law
67Mr Scotting, who appeared with Mr Chapple for Mr Sirakas, submitted that the International Mobility Agreement either did not become operative or, if it did, it ceased to have any force from 29 June 2007. Counsel pointed to clause 1.3 of the International Mobility Agreement that provided:
" 1.3 The Employer seconds, through this Agreement, the Employee to act as Managing Director Power Service Sector Romania, Bulgaria and Moldavia, in conformity with the secondment laws applicable in Romania. "
68Mr Scotting submitted that the International Mobility Agreement was not in conformity with the secondment laws applicable in Romania. In their written submissions, counsel contended that by Romanian law, Mr Sirakas was not permitted to be an employee of either APRO or AGT from 17 November 2004, and this had the effect that any employment contract with him was suspended from that date. Counsel also submitted that the contract was terminated by reason of a Government Emergency Ordinance that took effect from 29 June 2007.
69There was no dispute that if the International Mobility Agreement was terminated, suspended or invalidated under Romanian law the parties ceased to be bound by it. Only the " Labour Law " of New South Wales or Australia was selected as part of the proper law of the contract, and only then in so far as it did not contract a mandatory law of Romania. The Romanian laws relied on were mandatory.
70In support of these submissions the defendant tendered English translations of the Labour Code Law of Romania No. 53/2003, Articles 70, 72 and 137 of Law 31/1990 of Romania, and Article 5 of the Government Emergency Ordinance No. 82 of Romania. There was no dispute about the translations. The evidence was admissible pursuant to s 174 of the Evidence Act 1995. However, no evidence was led from any person expert in Romanian law about the effect of these statutes and ordinances. No evidence was led from an expert in Romanian law as to the effect and operation of the Romanian laws referred to on the relationship between the parties, or their effect on the International Mobility Agreement in general, or the submission to the exclusive jurisdiction of Australian courts in particular. In Lazard Bros & Co v Midland Bank Limited [1933] AC 289, Lord Wright said (at 298) that the question in a case such as the present is not as to the language of the foreign code, but what it means when applied to the circumstances of the particular case or, as Lord Wright put it more elegantly, " what the law is as shown by its exposition, interpretation and adjudication ".
71There is no such evidence in this case. Mr Harris SC, who appears for the plaintiffs, submits that for this reason the plaintiffs have failed to make good their contention that the submission to jurisdiction in the International Mobility Agreement did not come into effect, or that the agreement ceased to be in force from 28 June 2007. Mr Scotting and Mr Chapple submitted that the adducing of evidence of Romanian law by the tender of the written laws placed an evidentiary onus on the plaintiffs to adduce expert evidence if the written Romanian laws did not have the effect appearing from their text. They submitted that where no expert opinion evidence was led, the court can and should examine the text for itself to arrive at a conclusion upon the questions of foreign law. In Williams v Usher [1955] HCA 60; (1955) 94 CLR 450 the High Court held that where no expert evidence was called, the court was at liberty to decide the question of foreign law by itself looking at the relevant enactment (at 453-454; see also F & K Jabbour v Custodian of Israeli Absentee Property [1954] 1 WLR 139 at 147-148).
72I agree with the defendant's submission that the court can decide the question of foreign law by itself construing the relevant enactments. Where there is no expert evidence of Romanian law, that course is unavoidable. The content and application of foreign law is a question of fact. I do not interpret the text of the Romanian laws that were tendered as having the effect for which Mr Sirakas contended.
73The Labour Code is a law published in the official gazette of Romania of 5 February 2003. Article 1 provides that the Code regulates, amongst other things, all individual labour relations. Article 2(c) provides that the provisions in the Code apply to foreign citizens employed under an individual labour contract to work for a Romanian employer on the territory of Romania.
74Article 10 describes what is an individual labour contract. It provides:
" Article 10. - An individual labour contract is a contract based on which a natural entity, called employee , undertakes to perform work for and under the authority of an employer, who is a natural or legal entity, in return for a remuneration, called wages . "
75Articles 45 to 47 deal with secondment. Article 45 provides:
" Article 45. - The secondment is the action whereby a temporary change in the work place is provided for, based on the employer's order, with another employer, for the purpose of performing some works in the latter's interest. In this exceptional case, a secondment can also mean a change in the kind of work, but only based on the employee's written consent. "
76Under Article 46 a secondment can be ordered for a period not exceeding one year. In an exceptional case the period of secondment can be extended " for objective reasons requiring the employee's presence with the employer who ordered the secondment, based on both parties' consent, every six months. " Article 47(1) provides:
" Article 47. - (1) The employer with whom the secondment has been ordered shall grant the rights due to the seconded employee. "
77Article 56 sets out the circumstances in which an individual labour contract is "de jure terminated ". These include the expiry of the deadline of the individual labour contract concluded for a definite term.
78Counsel for Mr Sirakas submitted that the International Mobility Agreement is an individual labour contract within the meaning of the Code.
79There are provisions in the Labour Code that are said to be inconsistent with certain of the terms of the International Mobility Agreement, namely terms requiring confidentiality and requiring Mr Sirakas to work exclusively for APRO. It is unnecessary to consider whether there is the suggested inconsistency because Mr Sirakas is not sued for breach of those terms. It could not be said that any inconsistency between those terms and the Labour Code renders the whole International Mobility Agreement void. Nor was that argued.
80Instead, counsel for Mr Sirakas relied on two laws concerning labour contracts made between " administrators " and the company of which they are administrator. There was evidence from a Mr Chevrier, who described his occupation as " Alstom Country President Romania, Bulgaria, Moldavia ", that in Romania a person who would be considered as the manager of an Australian company is called a director and that a person who would be considered a director of an Australian company is called an " administrator ". Counsel for Mr Sirakas rely on Articles 70, 72 and 137 of Law No. 31/1990 regarding companies. Those Articles provide:
" Art. 70. - (1) The administrators shall perform all operations necessary for the fulfilment of the company's scope of activity, except for the restrictions provided under the constitutive deed.
...
Art. 72. - The obligations and the liability of the administrators are regulated by the provisions regarding the mandate and especially by those provided under this law.
...
Art. 137. - (1) The administrators are designated by the ordinary general meeting of the shareholders, except for the first administrators, who are appointed by the constitutive deed.
(2) The candidates for the offices of administrator are nominalised by the current members of the board of administration or by the shareholders.
(3) During the term of the mandate, the administrators cannot conclude with the company a labour contract. If the administrators have been designated from the company's employees, the individual labour contract shall be suspended during the term of the mandate.
(4) The administrators can be revoked at any time by the ordinary general shareholders' meeting. If the revocation is done without a just cause, the administrator shall be entitled to damages. "
81It seems that Article 137 was an amendment to Law No. 31/1990 published on 17 November 2004. Counsel submit that by Article 137(3) the International Mobility Agreement was suspended during the term for which Mr Sirakas had the mandate to act as administrator of APRO.
82Counsel also referred to Article V of Government Emergency Ordinance No. 82 that amended Law No. 31/1990 as from 29 June 2007. Article V provided:
" Art. V. - By derogation from the provisions of art. 56 of the Law no. 53/2003 - the Labour Code, with its subsequent amendments and completions, the labour contracts of the administrators/directors, concluded for performing the mandate of administrator/director before the [entrance] into force of this emergency ordinance are terminated de jure at the date of entrance into force of this emergency ordinance or, if such mandate was accepted after the entrance into force of this ordinance, at the date of the acceptance of the mandate. "
83Counsel submitted that the effect of this Article is that the International Mobility Agreement, being a labour contract, was terminated de jure as from 29 June 2007.
84Hence, it was said that the parties' submission in the International Mobility Agreement to the exclusive jurisdiction of courts of Australia was never operative because the contract was suspended, and in any event terminated by operation of law as from 29 June 2007.
85This submission does not explain what were the terms upon which Mr Sirakas was to act as managing director of APRO if not those in the International Mobility Agreement. Presumably he was entitled to be paid by someone for his services and presumably he undertook some obligations to perform the services. Articles 72 and 137 of Law No. 31/1990 refer to a mandate which regulates the obligations of an administrator. If Mr Sirakas was an administrator of APRO, what were the terms of the mandate, unless those contained in the International Mobility Agreement?
86The submission depends upon the International Mobility Agreement being an individual " labour contract ". Reference to the Labour Code suggests that the contract was only a labour contract if APRO was Mr Sirakas' employer. I was referred to no material which showed how Romanian law defined the relationship of employer and employee. The International Mobility Agreement, like the Secondment Agreement and the Detachment Agreement before it, provide for Alstom, not APRO, to be Mr Sirakas' employer, but for him to be seconded to provide services to APRO as its managing director.
87Counsel for Mr Sirakas rely on clause 1.3 of the International Mobility Agreement that Mr Sirakas was to act as " Managing Director Power Service Sector Romania, Bulgaria and Moldavia, in conformity with the secondment laws applicable in Romania ". Counsel submit that this refers to Article 45 which describes a secondment as an action whereby an employee is placed to work with another employer for the purpose of performing works in another employer's interest. Similarly, Article 47 describes a person with whom the employee has been seconded as being that person's employer and required to grant rights due to the seconded employee. Hence it is said that as the secondment was to be in conformity with Romanian secondment laws, Mr Sirakas is to be regarded as an employee of APRO. Hence the contract is a labour contract that is derived of effect by Law No. 31/1990.
88I have not been provided with a full picture of Romanian law as it bears on this question. I have been provided with a few sections of Law No. 31/1990 on the functioning of companies without any guidance or explanation as to how those sections are to apply to an executive director (administrator) who is also an employee.
89The Labour Code gives various rights to employees that cannot be contracted out of and also stipulates certain requirements for labour contracts. For example, by Articles 27 and 28 an employee must have a satisfactory medical certificate before he or she can be employed. Otherwise the individual labour contract is null (Article 27). If a labour contract is to include a clause against competition, the parties are required to negotiate an allowance to the employee of at least 25 per cent of the wages in return for such a restraint (Article 21). If an individual labour contract contains a " mobility clause " where the employee is to perform his or her job not in a stable workplace, the employee must be given unspecified additional cash payments or payments in kind (Article 25). There are restrictions on the right of an employer to dismiss an employee (Articles 58-72). Employees are guaranteed annual holidays of at least 20 working days (Article 140) in addition to ten days of " legal holidays " (Articles 134 and 140). An employee is entitled on request to vocational training leave (Article 149). There are to be minimum guaranteed wages (Article 159). Employers are required to ensure the employees have access to certain medical services (Articles 182-187).
90I infer that the purpose of Article 137 of the Law No. 31/1990 when read with Article 72 is that those who are in charge of companies (called administrators) are required to act in accordance with what is called a mandate, and are not permitted to act under what is characterised as an individual " labour contract ". In that way administrators cannot make the company subject to the operation of the Labour Code so far as their own position is concerned. In other words, they cannot claim the benefit of the Labour Code. But I do not infer that it follows that no contract can be made between an administrator and the company for his or her employment. Clearly there is to be a thing called a " mandate " which it could be expected would set out what an administrator was expected or required to do and the terms on which he or she was to act, including terms providing for remuneration. I see no reason that the International Mobility Agreement, and the Secondment Agreement before it, would not contain the terms of that mandate. The agreement is suspended only insofar as it operated as a labour contract that would be subject to the Labour Code. On the materials provided to me, if this were not so, there would be no way of ascertaining what rights Mr Sirakas had, or what obligations he owed.
91In this respect the Mandate Agreement made by Mr Sirakas with APRO on 2 February 2009 is instructive. In that agreement Mr Sirakas was described as the " Director ". Article 1 provided:
" Appointment
The Director was appointed and informed of his duties required for the working of the Company, and for performing any other related operations, in compliance with the terms and conditions of this agreement, in observance of the provisions in the By-laws and in the Company Law no. 31/1990, as subsequently amended (hereinafter referred to as 'Company Law') for a period of 2 years and 11 month [s] , until 31 st December 2011.
The Director acknowledges and accepts this appointment and empowerment. "
92In other words, the draftsman of the Mandate Agreement considered that the agreement was being made in conformity with Law No. 31/1990. The agreement went on to provide for the duties that Mr Sirakas was to carry out on behalf of APRO, including his obligation to carry out duties as Managing Director Power Services Sector Romania, Bulgaria and Moldavia in good faith. It set out his powers and remuneration. It provided that it could be terminated by either party on three months' notice and contained a submission of the parties to submit any dispute that might occur as a result of that agreement to arbitration in Romania.
93I infer that this was not intended to be a " labour contract " because Article 137(3) would preclude Mr Sirakas and APRO from concluding such a contract. Thus the provisions of the Labour Code would not apply to it. But that does not mean that the contract would not be enforceable according to its terms.
94Article V published on 29 June 2007 terminated " de jure " labour contracts of administrators/directors that were concluded " for performing the mandate of administrator/director ". The mandate itself was not terminated, but only a labour contract concluded for the purpose of performing it. Considered as a labour contract to which the Labour Code would apply, the International Mobility Agreement ceased to be of effect. That did not mean that it became wholly void. It simply meant that it did not operate as a labour contract to which the Labour Code applied. It continued to have contractual force as setting out the terms of the mandate under which Mr Sirakas was to provide his services. He remained entitled to the remuneration and allowances provided for in the agreement, but he could not seek protection of the Labour Code. He remained bound by the submission to the jurisdiction of Australian courts.
95It is unfortunate that there was no expert evidence of Romanian law on this question. As the argument that the International Mobility Agreement, including the submission to jurisdiction clause, did not come into effect or was terminated by operation of law was advanced for the defendant, I would have expected the defendant to adduce expert evidence of Romanian law on this question. I can infer that no further evidence the defendant could have called on this question would have assisted his case. I do not think that the tender of the translations of Articles of Law No. 31/1990 imposed an evidentiary onus on the plaintiffs to call evidence on the topic. For the reasons I have given I do not construe the laws that were tendered as having the result for which counsel for Mr Sirakas submitted.