Geographical scope of wage claims in insolvent companies

The circumstances refer to Greek seamen employed in Greece, by a Greek company based in Malta, to work aboard a company-owned Maltese-flagged cruise ship. The employment contracts contained a clause choosing Maltese law as the governing law. With the vessel arrested, the workers did not receive their remuneration for the period they remained on board pending a planned but never-to-be charter. The Greek court of first instance ordered the company to pay wages, on-board food expenses, holiday entitlements and severance pay, along with statutory interest. After further executions, the vessel was auctioned and the company was declared insolvent, without paying the workers the amounts owing to them due to insufficient realisable assets. The workers then applied to the National Employment Service for the protection available to employees in the event of their employer’s insolvency, only to have it rejected. In view of liability claims against the Greek State by failing to provide protection, the workers had the Judicial Review Court vary the initial court decision and accept the application of Directive 80/987, as the company carried out business in Greece – country where its real seat (actual head office) was located – and the Greek State had erred by failing to provide the employees with the protection guaranteed by European legislation…