Working Conditions and Freedom to Provide Services : The Market versus Unions in Two Cases before the Court

European Social Policy, January 17, 2007 | Go to article overview

Working Conditions and Freedom to Provide Services : The Market versus Unions in Two Cases before the Court


Freedom to provide services or freedom of establishment versus labour law and trade union action: that in short is the highly political question the EU Court of Justice is grappling with in two different cases.

The first pits a Latvian firm, Laval un Partneri, against Sweden's trade unions. The unions carried out a blockade against the company in autumn 2004, obliging it to interrupt its activity and to divest itself of its subsidiary in Sweden (Case C-341/05). The second involves Viking, a Finnish maritime transport undertaking, and Finnish and European trade unions in the sector. Since Estonian seamen accept lower salaries than their Finnish counterparts, Viking planned to reflag its vessel Rosella,' which operates between Tallinn (Estonia) and Helsinki (Finland), in order to stand up to its competitors, notably firms from Estonia. The unions, rejecting the lower salaries and the possible firing of Finnish seamen, triggered a strike (Case C-438/05).

The first case thus raises the issue of freedom to provide services and the 1996 Directive on the posting of workers; the second, freedom of establishment and the 1986 Regulation on freedom to provide maritime transport services.

The oral arguments were presented on 10 and 11 January, respectively, in the two cases, before the Court's Grand Chamber. No fewer than 14 EU state governments and two EFTA state governments intervened in the Laval case, along with the European Commission and the EFTA Surveillance Authority. A virtually identical number took part in the Viking case, reflecting the particularly keen interest in these questions of principle.

The judgements are not expected to be handed down for several months. The advocates-general first have to draft an opinion: Paolo Mengozzi (Italy) in the first case, and Miguel Poiares Maduro (Portugal) in the second. The two are among the Court's most experienced judges.

LAVAL CASE

The Swedish court before which Laval brought its case has raised two important questions. Is the action by trade unions to try to force, via a blockade, a foreign service provider to sign a collective agreement on working conditions in the state of operations compatible with EC Treaty rules on freedom to provide services? Does Sweden's so-called lex Britannia,' which bans blockades against a company that has signed a Swedish collective agreement on working conditions, but not against those that have entered into collective agreements in another state, run counter to the principles of non-discrimination and freedom to provide services and the 1996 Directive on the posting of workers?

The governments are clearly split into two camps, according to the report on the Laval hearing. Certain east European countries consider that both the Swedish blockade system and the national law violate the principle of freedom to provide services (Estonia, Latvia, Poland and the Czech Republic). The great majority of states and the EFTA Surveillance Authority are in the opposite camp.

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