The right of trade unions to take collective action may be limited by employers’ right to freedom of establishment, the European Court of Justice has ruled in the landmark Viking case.
On Tuesday, 11 December, the Court ruled that a trade union’s threat to strike in order to force an employer to conclude a collective agreement may constitute a restriction on the freedom of establishment if the terms of the agreement are liable to deter the company from exercising its freedom of establishment.
On the specific merits of the case, the Court found that the strike action threatened by the two unions amounted to a restriction of Viking Line’s right of establishment. More generally, it went on to say, however, that such action may be legitimate if its aim is to protect workers’ jobs or working conditions and if all other ways of resolving the conflict were exhausted.
Viking Line declared itself "extremely satisfied" with the judgement. In a press release, the shipping company said: "The decision supports the basic matters of principle defended by Viking Line in the High Court of Justice in London in its summons against ITF and the Finnish Seamen's Union in autumn 2005."
The European Trade Union Confederation (ETUC) stressed that although the judgment was "clearly about a specific maritime case", it will carefully study "the effects it may have on national and European industrial relations".
ETUC General Secretary John Monks commented: "This judgement clearly gives protection to unions acting at local and national level when challenging the freedom of establishment of companies. However, it is less clear about transnational trade union rights. In the run up to the solemn proclamation of the Charter of Fundamental Rights and the adoption of the Reform Treaty, we would have welcomed a more clear and unambiguous recognition of the rights of unions to maintain and defend workers' rights and equal treatment and to cooperate cross border, to counterbalance the power of organised business that is increasingly going global."
David Cockroft, general secretary of the International Transport Workers' Federation (ITF), specifically welcomed "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."
Cockroft stated: "As particularly laid out in paragraphs 43, 44 and 77 of its judgement, the Court has indicated that 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 free movement rights."
He added, however: "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."
UK Green MEP Jean Lambert welcomed the ruling, which, according to her, "will ensure that company trading rights cannot simply ride rough-shod over workers' rights. Companies will now have to think twice before opting for cheaper labour at the expense of existing employees."
Lambert added: "Although the judgement is not as conclusive as it could have been (having referred the case to the national courts), it still suggests that the rights of establishment and free movement do not necessarily take precedent over the rights of workers. However, there is now a question over what constitutes a legitimate aim. Would strike action for the public good, for instance regarding an environmental concern, substantiate a legitimate aim?"
In what became known as the Viking case, the International Transport Workers' Federation (ITF) and the Finnish Seamen's Union threatened industrial action over Viking Line's plans to reflag one of its Finnish vessels to Estonia and replace the crew with cheaper workers from that country. The case was referred by the Court of Appeal in London to the European Court of Justice in November 2005.
The cases raised a great amount of attention due to the fact that two basic principles established in the EU treaties - companies' freedom of establishment in any member state and workers' right to take collective action to oppose business decisions affecting their rights - were obviously conflicting with each other.
On 23 May, Advocate-General Miguel Poiares Maduro expressed the view that trade unions could take collective action to dissuade a company from relocating within the EU, as long as this did not partition the labour market along national lines or prevent a relocated company from providing services in another member state (see EURACTIV 24/05/07)
- [FR](11 December 2007) [DE]
- Court of Justice (Press release):Judgment of the Court of Justice in Case C-438/05 - The International Transport Workers' Federation et The Finnish Seamen's Union [FR] [FR] [DE]
- Court of Justice (Advocate General):Opinion in the Viking case(23 May 2007) [FR] [FR] [DE]
- Court of Justice:Press release on Advocate General opinion in the Viking case(23 May 2007) [FR] [FR] [DE]
- EC Treaty - Article 43 -Right of establishment [FR] [FR] [DE]
- Eur-Lex:Posting of Workers Directive(96/71/EC; 16 December 1996) [FR] [FR] [DE]
Business & Industry
- Viking Line (Press release):M/S Rosella and the freedom of establishment(11 December 2007)
- ETUC:ECJ judgement on Viking case recognises fundamental right to collective action as integral part of EU Community law(11 December 2007) [FR]
- ETUC:The Viking case - Briefing note
- International Transport Workers' Federation (ITF):Viking Case Briefing Document(23 May 2007)
- ITF:European court to rule on landmark labour case(27 April 2007)
- Financial Times:Right to strike is upheld in Viking Line case(12 December 2007)
- Guardian:EU court backs unions on business relocating in EU(11 December 2007)
- Le Monde:Dumping social: la justice européenne défend la liberté d'établissement(11 December 2007)
- RTBF:Dumping social: la justice européenne défend la liberté d'établissement(11 December 2007)
- ORF:EuGH stärkt Gewerkschaft im Kampf gegen Jobverlagerung(11 December 2007)
- Frankfurter Allgemeine Zeitung:EuGH: Gewerkschaft muss Niederlassungsfreiheit achten(11 December 2007)
- Frankfurter Rundschau:Protest bleibt erlaubt(11 December 2007)
- EU Law Blog:Boycotts, Strikes and the Freedom of Establishment: Case C-438/05(11 December 2007)
- EU Referendum:Social dumping OK!(12 December 2007)