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To be continued at the Court of Justice: social dumping against the free market

(B2) It is on May 23 that the two advocates general of the European Court of Justice (the Italian Paolo Mengozzi and the Portuguese Miguel Poiares Maduro) will deliver their conclusions in the two cases (Laval un Partneri and Viking) opposing Nordic unions – Swedish on one side and Finnish on the other – to companies from the new member states – Latvian and Estonian.

The question is highly political and symbolic as well as technical and legal. No less than 14 governments from the European Union and two from EFTA have also intervened in these cases. The question is whether collective union action is possible to impose the application of local labor law against entrepreneurs who demand the application of the freedom to provide services or the freedom of establishment considered as fundamental principles of community law. .


The first case pits a Latvian company, Laval un Partneri, against Swedish trade unions. In the autumn of 2004, the latter had carried out blockade action against the former, forcing it to interrupt work and liquidate its subsidiary in Sweden (Case C-341/05).

Facts. In May 2004, the Laval un Partneri company seconded workers from Latvia to carry out construction sites in Sweden. In particular, she undertook work in a school in Vaxholm, a small town located 35 km from Stockholm. Works carried out by its local subsidiary, Baltic Bygg, which was awarded the public works contract following a call for tenders. The agreement concluded between the municipal administration and the company provided that Swedish conventions and collective agreements would be applicable on the site. But, according to Laval, the parties subsequently agreed not to apply this clause. In June, negotiations began with Swedish unions to reach a collective agreement, but no agreement was reached. Laval, however, signed two collective agreements with a Latvian construction union in the fall. In November, a collective “blockade” action, triggered by the Swedish unions, was carried out on all work in all workplaces in Laval. Since then, Baltic Bygg has been subject to collective liquidation proceedings. And a complaint was filed by Laval before the Swedish courts.

Two main questions are asked by the Swedish courts, seized by the Laval company. Is the fact that trade unions attempt, by means of a blockade, to compel a foreign service provider to sign a collective agreement in the State of stay relating to working and employment conditions compatible with the rules of the EC Treaty on the freedom to provide services? Is the Swedish law known as "lex Britannia", which prohibits any blockade action against a company that has signed a Swedish collective agreement on working conditions but does not prohibit it when it comes to a foreign collective agreement, contrary to the principles of non-discrimination and freedom to provide services and the 1996 directive on the posting of workers?

The governments are clearly divided into two camps, according to the hearing report for the “Laval” affair. Some Eastern European countries consider that both the Swedish blockade system and national law are contrary to the principle of freedom to provide services (Estonia, Latvia, Lithuania, Poland, Czech Republic). The vast majority of countries as well as the EFTA Surveillance Authority lean towards an opposite solution and consider trade union action compatible with the rules of the Treaty (Germany, Austria, Belgium, Spain, France, Ireland, Italy, Denmark, Finland, Sweden, Iceland, Norway). Some governments develop a more diversified argument. Germany attaches two conditions to its position: union actions must be “necessary and reasonably proportionate to their objective”, the collective agreement concerned must be “in accordance with the provisions of the directive on the posting of workers”. Position shared by Ireland. Belgium defends a more philosophical position: even if the “(Swedish) law could be considered (by the Court) as a form of indirect discrimination, it corresponds to a legitimate objective because its aim is to guarantee equal treatment of all workers on Swedish territory. Position shared by Finland which asks the Court to recognize the fundamental right “to undertake collective (union) action”. For Denmark, “the Community is not competent to regulate, whether directly or indirectly, the right of trade union organizations to initiate collective actions aimed at the conclusion of a collective agreement with an employer”.

The European Commission opts for an analysis of the directive on the posting of workers, distinguishing between the standards covered by this text, such as the minimum wage, and the other working conditions, not covered. "A wage fixing system consisting of the negotiation and conclusion of collective agreements, supplemented by legislative provisions (such as Swedish law)" is thus not incompatible, as such, with the principle of freedom to provide services “provided that this system achieves the result prescribed by the directive (on the posting of workers)”. On the other hand, if it is a question of regulating conditions of remuneration which go beyond the minimum provisions of the directive, this constitutes a restriction of services, underlines the Commission.


The second case pits Viking, a Finnish shipping company, against Finnish and European unions in the sector. The salaries of Estonian sailors being much lower than Finnish salaries, Viking, which operates the Talllin (Estonia) -Helsinki (Finland) connection with a boat, the Rosella, wanted to change flag in order to resist its Estonian competitors in particular. The trade unions which refuse the imposition of lower wage conditions and the possible dismissal of Finnish seafarers have called a strike (Case C-438/05).

In the “Viking” case, the European Commission has a different position. It considers that the principle of freedom of establishment and the 1986 regulations have "no direct horizontal effect such as to confer rights on a private undertaking which may be invoked against a trade union or an association of trade unions as regards industrial action by that trade union or association of trade unions.” The EFTA Surveillance Authority did not intervene.

An equivalent number of States intervened (14 from the European Union and 1 from EFTA), defending similar positions. Some differences can be noted. Thus, Lithuania did not submit written submissions. In contrast, the UK did. In a very clear-cut way, he believes that any trade union action must respect the principle of freedom of establishment. Going even further, it considers that, in principle, “the exercise of collective action, including strike action, is not a fundamental right protected by Community law”. He adds: Community law does not recognize a “fundamental [legally binding] social right to take collective action”.


Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).