UNION RIGHTS : COLLECTIVE ACTION, A FUNDAMENTAL RIGHT THAT HAS LIMITS.

The EU Court of Justice handed down its second ruling, on 18 December, on unions' right to organise collective action in relation to freedom of establishment (judgement of 18 December 2007, Laval un Partneri v. Svenska Byggnadsarbetareforbundet, C-341/05). This case ties in with the Viking case, even though the context is slightly different. This time, the dispute pitted the Swedish unions against a Latvian company, which had posted workers from Latvia to work on a school building site in Vaxholm (Sweden). The negotiations for determining the rates of pay for the posted workers failed and the union began collective action in the form of a blockade of all Laval sites in Sweden. According to the company's lawyers, that action caused it to go bankrupt and to recall its posted workers to Latvia.

The Court recognises the legitimacy of collective action, even if it consists of a blockade of a company, but rules that it was not justified in this instance. It gives three reasons for its conclusions.

The Court asserts that the right to take collective action must be recognised as a "fundamental right which forms an integral part of the general principles of Community law," the observance of which the Court ensures. However, exercise of that right "may be subject to certain restrictions," especially when it is directed against a company established in another member state which posts workers.

Forcing a company to negotiate a collective agreement, the terms of which go beyond the minimum protection guaranteed by the 1996 directive (posting of workers), constitutes "a restriction of the freedom to provide services" because it is "liable to make it less attractive, or more difficult, for such undertakings to carry out construction work in Sweden". The 1996 directive does not allow the host member state to make the provision of services on its territory conditional on the observance of terms and conditions of employment which go beyond the mandatory rules for minimum protection.

A restriction may be justified if it: 1. pursues a legitimate objective compatible with the treaty...