LIFE ON THE OCEAN WAVE

International Transport Workers’ Federation and anor v Viking Line APB and anor

European law says that there should be no restrictions on the freedom of nationals in member states to set up and manage companies and firms in other member states.

The Advocate General (AG) of the European Court of Justice (ECJ) has now said in International Transport Workers’ Federation and anor v Viking Line APB and anor that unions have a limited right to organize collectively. As long as their aim is to protect the workers in the company, they can take collective action to stop a company from relocating from one member state to another.

This is, however, only an opinion. The ECJ itself still has to consider this case, but it nearly always follows what the Advocate General has said.

Basic facts

Viking was a Finnish passenger ferry operator with seven vessels, including one called Rosella, sailing under the Finnish flag between Estonia and Finland. The crew of the Rosella belonged to the Finnish Seamen's Union (FSU) affiliated to the International Transport Workers' Federation (ITF), based in London.

In October 2003, Viking decided to reflag the Rosella because it was making a loss. The company wanted to employ an Estonian crew at much lower wages than the Finnish crew. The ITF issued a circular asking all its 600 affiliated unions not to negotiate with Viking, in support of its general policy to eliminate flags of convenience.

In November 2003, the FSU threatened strike action. Viking settled the dispute in December agreeing not to reflag before February 2005, but the ITF did not withdraw its circular.

Anticipating that a new attempt to reflag would result in more action, Viking asked an English court in August 2004 for an injunction preventing the ITF and FSU from taking industrial action and asking ITF to withdraw its circular.

The arguments

The company argued that industrial action aimed at preventing them from reflagging the Rosella amounted to a restriction of their right to establish themselves (in this case in Estonia) under article 43 of the EC Treaty, and their right to provide services under article 49.

It said these were rights guaranteed by the treaty. As union activity was not exempt under the treaty, unions were prohibited from doing anything that inhibited those rights.

The unions, on the other hand, argued that they had a fundamental right to take action to preserve jobs recognised by Title XI of the EC Treaty and article 136. 
They said that allowing companies complete freedom of movement would undermine the right of workers to bargain collectively and to strike for collective agreements. This would, in effect, undermine the social policy objectives of the European Union (EU).

The issue was referred to the ECJ.

Opinion of the AG

Freedom of movement vs industrial action – the AG said that the treaty did not stipulate that social policy objectives “must always take precedence over the objective of having a properly functioning common market.” The unions were wrong therefore to assume that their right to associate and to strike was greater than that of companies to freedom of movement 
Freedom of establishment vs right to collective action - in principle, however, Community law does not stop trade unions from taking action to stop a company from relocating to another member state, as long as their objective is to protect the jobs and working conditions of the employees of that company
Coordinated action to improve terms of employment – Unions have the right to use coordinated collective action in order to promote rights for workers. Article 43 only precludes a coordinated policy of collective action by a trade union if it has the effect of “partitioning the labour market” and stopping workers from being hired from certain member states so as to protect the jobs of workers in other member states.