Unions may take action over cheap labour, EU court says

HONOR MAHONY

11.12.2007 @ 16:36 CET

EUOBSERVER / BRUSSELS - Europe's highest court has ruled that trade unions have a right to collective action to prevent their employers from hiring cheaper labour from other member states.

But the keenly awaited ruling, delivered Tuesday (11 December), says that the industrial action can only be taken as a measure to protect existing work conditions and not as a tool to prevent a company from moving to another member state, even if that country has weaker labour rights.

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Dating back to 2003, the case involved Finnish ferry company Viking Line, which decided to reflag one of its ships to Estonia in order to avail of cheaper Estonian labour.

Protesting the move, the Finnish Seamen's Union called on the UK-based International Transport Workers Federation (ITF) to take action on its behalf.

Viking Line then took the ITF to court after the Union had asked its members - under threat of sanctions - not to negotiate with the Finnish ferry line.

The European Court of Justice said such collective action "can be accepted only if it pursues a legitimate aim such as the protection of workers."

But it left it up to the British Court of Appeal to decide whether the action taken by the ITF can be justified as legitimate.

The case was closely followed across the EU as it appeared to encapsulate much of the debate on whether cheaper labour from eastern European member states - who joined the EU in 2004 - would undermine the higher labour protection of other member states, particularly in Scandinavian countries.

Trade unions billed the case as one where the EU's internal market rules were pitted against social rights.

'Balanced' judgement

The European Commission said the court's judgement was "balanced" and had laid down specific principle for the future.

It said one of the principles was that "collective action can in principle restrict the freedom of establishment, a cornerstone of the EU's internal market."

But any action must be for reasons of "over-riding public interest" as well as being "suitable and proportionate."

The commission also noted that the right to set up a business or 'freedom of establishment' had been safeguarded.

"The freedom of establishment can be relied upon by a private undertaking against a trade union," said a commission spokesperson summing up the judgement.

For its part, the ITF welcomed the judgement.

"We welcome the Court's assertion that the right to take collective action - including the right to strike - is a fundamental right which forms an integral part of the general principles of Community law," said the organisation's secretary general David Cockroft.

But he noted that it will now be up to the British court to decide on the particular case.

"The devil's in the detail and it's now up to the Court of Appeal to apply this guidance to the particular facts of this case."

The is the first of two important labour judgements from the EU court. Next week the court is to deliver a judgement on a similar case involving Swedish trade unions and a Latvian firm.