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eu: freedom of establishment v freedom to strike December 12, 2007

Posted by Bradley in : Uncategorized , trackback

The ECJ decided the Viking line case yesterday, in a rather convoluted, splitting-the-baby sort of decision (EU Law Blog says the “judgment is a rich one that rewards careful reading.”) The International Transport Workers Federation and the Finnish Seamen’s Union and Viking Line, a ferry operator, disagreed about whether Viking should be able to reflag a ferry (the Rosella) from Finland to Estonia, which would have the result of displacing the collective bargaining agreement and reduce the crew’s wages. When negotiations broke down and the FSU threatened to bring strike action, Viking went to court (initially in Finland and then later in England) to try to stop the strike action, and argued that the planned strike action would interfere with its right to establishment under Art. 43 of the EC Treaty and that it was an unlawful restriction on freedom of movement for workers and freedom to provide services under Articles 39 EC and 49 EC. The Trades Unions argued in response that the right to take collective action was a fundamental right. The English Court of Appeal made a preliminary reference to the ECJ.

The ECJ stated that collective action is in principle within the scope of Art. 43, and that:

the right to take collective action, including the right to strike, must … be recognised as a fundamental right which forms an integral part of the general principles of Community law the observance of which the Court ensures, [but] the exercise of that right may none the less be subject to certain restrictions. As is reaffirmed by Article 28 of the Charter of Fundamental Rights of the European Union, those rights are to be protected in accordance with Community law and national law and practices. In addition… under Finnish law the right to strike may not be relied on, in particular, where the strike is contra bonos mores or is prohibited under national law or Community law.

However, Art. 43 was “capable of conferring rights on a private undertaking which may be relied on against a trade union or an association of trade unions”. But “the right to take collective action for the protection of workers is a legitimate interest which, in principle, justifies a restriction of one of the fundamental freedoms guaranteed by the Treaty”. If the collective action were designed to protect jobs and conditions of employment which were in fact under threat and were proportional in respect to the threat (ie the union did not have at its disposal other means to resolve the issues which were less restrictive of the right to establishment), the national court could decide that the collective action did not violate Art 43.

Thus:

Article 43 EC is to be interpreted to the effect that collective action such as that at issue in the main proceedings, which seeks to induce an undertaking whose registered office is in a given Member State to enter into a collective work agreement with a trade union established in that State and to apply the terms set out in that agreement to the employees of a subsidiary of that undertaking established in another Member State, constitutes a restriction within the meaning of that article. That restriction may, in principle, be justified by an overriding reason of public interest, such as the protection of workers, provided that it is established that the restriction is suitable for ensuring the attainment of the legitimate objective pursued and does not go beyond what is necessary to achieve that objective.

The ITF welcomed the recognition of the right to collective action without really recognising the limiting language in the judgment. The BBC headline was “Blow for unions in EU labour row”.

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