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Victory at last on Laval but what will judgment mean for unions?
A series of reverses in the European Court of Justice has restricted the ability of trade unions to act on behalf of migrant workers when employers seek to pay them lower wages and institute worse conditions than apply to local workers. But now the laws in the country where the original Laval/Vaxholm dispute took place have been found to infringe the European Social Charter the consequences are hard to foresee.
In many past issues we have devoted articles to the ramifications of the European Court of Justice’s (ECJ) decision on the famous ‘Laval’ case where Swedish union Byggnads was found to have acted illegally in blockading a building site at a Stockholm school where Latvian firm ‘Laval un Partneri’ were paying migrant workers lower rates than those enshrined in local agreements. Following that judgment Sweden passed new laws (see issue 48) which prevented unions from campaigning on behalf of posted workers as long as they were receiving basic levels of pay and holidays and working the hours as specified in industry-wide central agreements.
The Swedish white- and blue-collar federations brought a case against this legislation in the European Committee of Social Rights. This body, which has nothing to do with the EU, is attached to the Council of Europe and is charged with upholding the tenets of the European Social Charter which guarantees social and economic human rights in Europe. The committee unanimously found that the charter had been violated and drew attention to the lack of positive promotion of negotiation and the right to take collective action on behalf of posted workers, and the consequent failure to ensure that foreign employees received equal treatment with Swedish workers under the new laws.
While the Confederation of Swedish Enterprise stressed that the decision is not legally binding and the government defended the legislation, the Social Democrat party pledged to tear up the ‘Lex Laval’ if it is elected next year. ‘Swedish collective bargaining agreements should apply in Sweden’ said party leader Stefan Lövfen, ‘It does not matter from which country the employee comes from nor where the employer is registered’. General Secretary of the European Trade Union Confederation Bernadette Ségol sees wider consequences in the decision as challenging the original ‘Laval’ judgment of the ECJ as ‘not taking social rights sufficiently into account’.
Recent rulings from the European Court of Justice
EU staff lose their pay rise
In Denmark when civil servants are made redundant they can opt for an ‘availability payment’ so that they can form a reserved of experienced workers. Additionally Danes can retire at 65 although the compulsory age is 70. A Mr. Toftgaard reached 65 on the same day as he was made redundant. He wanted to be put on availability pay but his employer said that he was not entitled as he could now draw a pension. The court ruled that, although it was not necessarily against the Equality Directive to set an age limit for benefits of various kinds, the Danish measure went too far as the aim of forming an employee reserve whilst not paying out pensions to the same workers could be achieved by allowing civil servants to temporarily waive their right to a pension. Otherwise the rule was particularly disadvantageous to those who had not qualified for a full pension.
The ECJ has thrown out the proposed 1.7% pay rise for the employees of EU institutions for 2011 despite making the opposite judgment for 2010. The figure was arrived at by the European Commission through a long-standing calculation involving the costs of living in Brussels and the wage rates of civil servants in the main EU Member States. However, under pressure from several countries the Council of Ministers refused to implement the rise. The court ruled that staff regulations allowed for an exception to this ‘adjustment method’ in the event of a serious and sudden deterioration in the economic and social situation. If a similar case for 2012 is also lost it would mean a five-year pay freeze for EU officials until 2015. Added to this a new Commission proposal would increase working hours and the retirement age resulting in a 60% pay cut in real terms over the next fifteen years.