The Court of Justice of the European Union (CJEU) clarified a major ambiguity in international employment law on December 11, 2025. The ruling in Case C-485/24 (Locatrans) affects any company with cross-border workers or “stealth expats” in the EU.
A choice of law clause in an employment contract no longer provides a total shield against the labor laws of the country where work is actually performed.
The Case: Locatrans Sàrl v ES
This dispute involved a driver employed by a Luxembourg transport company. The 2005 contract specified Luxembourg law as the governing authority. However, the employee argued that his habitual place of work shifted to France over time. He requested the application of French mandatory rules because they offered better minimum wage and overtime protections than the rules in Luxembourg.
The CJEU had to determine if the habitual place of work could change during a single, continuous contract under the Rome Convention.
Key Facts from the Ruling
The Court established several principles that change how Global Mobility teams must view international contracts:
- The Habitual Location is Dynamic: The habitual place of work is not fixed at the start of a contract. If an employee begins working in a different country on a lasting basis, that new location becomes the habitual place of work.
- Mandatory Protections Take Priority: An employee cannot be deprived of the protections provided by the mandatory rules of the country where they habitually work. This applies even if the contract explicitly chooses the law of a different country.
- The Center of Gravity Test: National courts must look at the physical reality of the work. This includes where the employee receives instructions, where they organize their work, and where they return after assignments.
Compliance for Global Mobility Managers
This decision requires a shift from a static contract mindset to continuous monitoring of employee locations.
The physical “center of gravity” of a worker now dictates their legal rights. This includes vacation days, minimum wage, and dismissal protection. These rights follow the worker regardless of where social security is paid or what the signed contract says.
To manage these risks, companies should consider the following steps:
- Map Employee Activity: Review the physical work locations of international staff over the last 24 months to identify any lasting shifts.
- Analyze Local Protections: Compare the mandatory labor laws of the contract country against the country where the employee actually works.
- Align Records with Reality: Update internal records to reflect the true work location to ensure payroll and HR policies meet local mandatory minimums.
The Future of Cross-Border Work
The Locatrans ruling reinforces the principle that European labor law follows the worker. As work patterns become more fluid, the legal frameworks governing them are becoming more specific about physical location. Staying compliant now requires a deep understanding of where your workforce is actually operating on a daily basis.
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