CROSS-BORDER SOCIAL DIALOGUE AND AGREEMENTS: An ...

Implementation and monitoring of cross-border agreements – Bercusson
Laval
Baltic Bygg AB is a Swedish subsidiary fully owned by “Laval” un
Partneri Ltd Laval, a Latvian company. Baltic Bygg was awarded a public
works contract in June 2004 by the City of Vaxholm in Sweden for construction
works on a school. 13 Negotiations on a collective agreement
between the Swedish Building Workers’ Union (Svenska Byggnadsarbetareförbundet,
or Byggnads) and Laval began in June 2004, but Laval
refused to sign a collective agreement on terms acceptable to Byggnads.
Instead, Laval entered into a collective agreement with the Latvian Trade
Union of Construction Workers. Byggnads gave notice of industrial
action and industrial action was taken by Byggnads and the Swedish Electricians’
Union (Svenska Elektrikerförbundet) in late 2004, including a
peaceful boycott of the building and construction work. The right to
strike is protected as a fundamental right by the Swedish constitution.
Laval started proceedings before the Swedish Labour Court claiming,
among other things, violation of its freedom of movement under the EC
Treaty. The industrial action continued and Baltic Bygg AB went bankrupt.
The Swedish Labour Court referred questions to the ECJ.
The issues at stake are as follows. In both cases, the employers’ claim
was based on EU law: that the industrial action had violated the
employer’s freedom of establishment and to provide services, as provided
in the EC Treaty, Articles 43 and 49. As the unions claimed in the
Swedish Labour Court in the Laval case regarding the Swedish Constitution,
the FSU in the Viking case invoked the Finnish Constitution,
which protects the fundamental right to strike. At first instance in Viking
in the English Commercial Court, the judge upheld the employer’s complaint,
on the grounds that EU law overrode any national law, even the
national constitution of a Member State.
However, the EC Treaty provisions on free movement are not
absolute. Free movement is limited by public policy considerations, both
in the Treaty 14 and as developed by the ECJ through its extensive case
law. The reference to ECJ jurisprudence made by the English Court of
Appeal in Viking highlights the limits to free movement: whether EC
Treaty provisions on free movement may be limited by collective action
that is lawful under national law is the specific issue. One question raised,
1995.
13
Latvia became an EU Member State in May 2004. Sweden has been an EU Member State since
14
Articles 30 (goods), 39(3) (workers), 46(1) (establishment), 55 (services), 58(1) (capital).
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