Summaries of Viking and Laval
Labour & European Law Review Weekly issue 66 15 May 2008
International Transport Workers’ Federation and anor v Viking Line APB and anor (see LELR 49 for more details)
Viking (a Finnish passenger ferry operator) owned a ship called the Rosella which operated under a Finnish flag on the route between Estonia and Finland. As it was making a loss, the company decided to re-flag the ship to operate under a “flag of convenience” in Estonia or Norway in order to avoid collective agreements with Finnish trade unions and cut jobs and terms and conditions.
Following a request from the Finnish Seamen’s Union (FSU), the International Transport Workers’ Federation issued an instruction to affiliates to boycott Viking’s activities. The FSU also called for strike action by its own members.
Viking brought proceedings in the High Court in London, arguing that its right to freedom of establishment under EC law was infringed by the industrial action under article 43 of the EC Treaty (see below for more details), and their right to provide services under article 49 (see below for more details). The unions argued that they had a fundamental right to take action to preserve jobs recognised by Title XI of the EC Treaty and article 136.
The ECJ said that:
- The right to take collective industrial action is “fundamental” and of “overriding public importance”
The EC Treaty provisions protecting an organisation’s right to freedom of establishment apply to industrial action and can be relied upon by non-state employers
Industrial action represents a restriction on the right of freedom of establishment if it makes the exercise of that right “less attractive”, but is acceptable if it pursues a legitimate aim and is justified by overriding reasons of public interest (such as the protection of workers and jobs that are “under threat”)
The industrial action must also be “suitable” for achieving the objective, having regard to whether the union has other means of achieving it which are less restrictive of the employer’s right to freedom of establishment.
Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet and ors (see LELR 49 for more details)
Having won the contract to build a school at Vaxholm in Sweden, Laval (a Latvian company) posted Latvian construction workers to Sweden for that purpose.
The Swedish construction unions tried to get Laval to sign up to collective agreements in the construction sector covering pay, holidays, other terms and insurance arrangements, but the company refused. The Swedish construction unions “blockaded” Laval’s sites in Sweden, with further sympathy action being called by the Swedish electricians’ union. The Swedish arm of Laval was eventually declared bankrupt.
Laval brought proceedings in the Swedish courts arguing that its freedom to provide services had been infringed and that it had been discriminated against because of the failure of Swedish national provisions to take into account collective agreements that it had entered into with unions in Latvia.
The ECJ ruled that:
- The right to take collective industrial action is a “fundamental” right
The EC Treaty provisions protecting an employer’s freedom to provide services in other member states apply to industrial action and can be relied upon by non-state employers
Industrial action represents a restriction on the freedom of provision of services where it makes the exercise of that right “less attractive”, but is acceptable if it is to pursue a legitimate aim and is justified by overriding reasons of public interest
The industrial action must also be “suitable for securing the attainment of the objective which it pursues and [does] not go beyond what is necessary in order to attain it”
The protection of workers is capable of amounting to a legitimate objective.
- This mirrors the ECJ’s findings in the Viking case in relation to an employer’s right to freedom of association, but it then went on to rule that:
- Protection of workers from social dumping can amount to an overriding reason or public interest
A “blockade” to ensure that workers in the context of transnational service provision have their terms and conditions fixed at a certain level falls within the objective of protecting workers
But, in the context of posted workers, industrial action in support of a demand that an employer exceeds the level of protection guaranteed by the Posted Workers Directive when there are no clearly defined national law requirements cannot be justified
Employers will be discriminated against where national rules do not take account of collective agreements in the employer’s state of origin.