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EUROPEAN REVIEW
ISSUE 41 - Page 6
Choppy seas
ahead for Nordic unions as court muddies the water
In December the European Court of Justice
(ECJ) finally ruled on two important cases that we have been following
in these pages. Both the ‘Viking’ and ‘Vaxholm’ disputes centred on the
lawfulness of trade unions taking action to prevent companies employing
foreign labour at lower wages than local workers and both took place in
the Nordic countries. We examine the judgments below.
The European Union is often spoken
of as a ‘single market’ but over a wide range of activity it intervenes
to improve living and working conditions by pursuing a ‘social policy’.
The cases arose when these two objectives collided. Both involve EU
firms from one EU Member State operating in another (see issues 33 and
34). Although the Advocate General’s
opinions were thought to be
favourable to the unions, unusually the full judgments have not
followed these. Finding against the Swedish construction federation
Byggnads the ECJ ruled that, while it had a right to take industrial
action for ‘overriding reasons of public interest’ including
‘protection of the workers of the host State against possible social
dumping’, it could not act to force Latvian builders Laval and Partneri
to sign a collective agreement. As long as the company abided by the
terms of the Posted Workers Directive which lays down minimum standards
for foreign workers it could not be put at a disadvantage by protracted
negotiations.
In the ‘Viking’ case the court’s ruling would seem to be easier for
unions to live with but there are lots of ifs and buts. The ECJ
confirmed that the right to collective action including strikes could
override the freedom of a business to relocate to another country.
However the justification for the International Transport Workers
Federation boycott of the ‘Viking’ ferry company will be decided by the
national court. They must weigh up the action to see if it was
proportionate in protecting local Finnish workers who would lose their
jobs if the company’s ships were reflagged as Estonian.
Varied reactions to the judgments reflected their qualified nature. The
General Secretary of Swedish union federation LO said they would lead
to ‘a form of apartheid’ as foreign workers would be treated less
favourably but the President of the Party of European Socialists
believed that the court had just created uncertainty and ‘shot itself
in the foot’. While Swedish business leaders welcomed greater freedom
of movement the government was ‘disappointed’.
Recent
rulings from
the European Court of Justice
Spanish
retirement case loss could mean UK win
A European Court of Justice (ECJ)
ruling which went against a Spanish man who was compulsorily retired by
his employer could have surprisingly beneficial consequences for a
soon-to-be-heard British case. The reason lies in the logic that the
court used to come to its decision. The Equal Treatment Directive of
2000 outlaws discrimination in employment on various grounds including
age. Therefore, when Sr. Palacios de la Villa reached 65 he contested
his firm’s decision to terminate his employment. However, although the
ECJ upheld the Spanish law which allowed them to do this, they did so
only because its aim was to promote full employment. Furthermore it
only applied where agreed by a trade union and when the individual
would receive a sufficient pension. None of this applies in the
UK where employers are allowed a compulsory retirement age regardless
of its effects on those involved. It seems that Heyday, part of Age
Concern, may be on more solid ground when its case against the UK
government is heard.
‘Volkswagen law’
crashes at ECJ
A German law that sought to protect
flagship company Volkswagen from takeover has been found to be
incompatible with EU principles on ‘the free movement of capital’. The
law stopped any one shareholder having a stake bigger than 20%,
reserved places on the board for national and local government and set
an 80% threshold for resolutions to pass at AGMs. Porsche is now
expected to acquire the company.
Now ECHR to rule on
French Ryanair case
The Ryanair case mentioned in our last
issue has taken another turn. The French court which rejected the
firm’s claim that its workers in Marseilles should be covered by the EU
Posted Workers Directive and not French law, also denied it the right
to take the case to the ECJ. Now the company will pursue the matter at
the European Court of Human Rights.
