European Union law

Article 6(2) of the European Social Charter imposes on all member states a duty to promote collective bargaining. In addition, Article 28 of the Charter of Fundamental Rights of the European Union states that all workers have the fundamental right to negotiate and conclude collective agreements and to take collective action, including strike action, to defend their interests.

Even so, European Union law takes a restrictive approach to workers’ collective rights when they clash with employers’ rights and freedoms, in particular the rights to economic freedom of movement and establishment (Articles 49 and 43 of the European Community Treaty).

This restrictive approach is demonstrated by the limits that were placed on European level industrial action by two key ECJ decisions: ITF & FSU v Viking Line ABP Case C-438/05 [2007] ECR 1-10779 (“Viking”) and Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet and others Case C-341/05 [2008] IRLR 160 (“Laval”). Both cases involved protest strikes against plans to replace workers from one EU country with lower-paid workers from another.

In these cases, the ECJ acknowledged the “fundamental” and “overriding public importance” of the right to take collective industrial action under Article 28, but went on to rule that the right must be exercised in a manner compatible with other European Union laws, including the employer’s rights to free movement of workers, services and establishment. Moreover, to be acceptable under EU law, said the ECJ, Industrial action must pursue a legitimate aim and be justified by overriding reasons of public interest, such as the protection of workers and jobs under threat. The chosen method of industrial action must also be suitable (i.e. proportionate) to achieve the aim. Finally, before taking industrial action, unions must first exhaust all other available means of achieving their aim that impact less dramatically on the employer’s EU freedoms.

These rulings impose very significant restrictions on unions, who face the threat of bankruptcy through an award of substantial damages if a court decides, after-the-event, that their chosen form of industrial action was disproportionate or premature.

An attempt by the European Commission to address these issues through regulation, known as the draft Monti II Regulation, was abandoned in September 2012 after member states failed to agree.