European Community law

European Union law has, for some years, taken a restrictive approach to the right to strike, wherever there is a clash between workers’ rights to take collective action and employers’ desire to enjoy economic freedoms of movement and establishment (Articles 49 and 43 of the European Community Treaty). The leading cases are two important 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 strikes to protest against plans to replace workers from one EU country with lower-paid workers from another, and both cases placed new limits on the potential lawfulness of industrial action, with very serious implications for unions.

In both cases, the ECJ acknowledged that unions have a fundamental right to strike under European law. In particular, Article 28 of the Charter of Fundamental Rights of the European Union specifically states that workers have the right to negotiate collective agreements and to take collective action, including strike action, to defend their interests. But the ECJ went on to decide that the right to take industrial action can only be exercised in a manner compatible with European Community law. In other words, the ECJ held that the right to strike is limited to the extent that it restricts an employer’s freedom of movement of workers, services and establishment and that it will only be lawful if it is justified and proportionate.

The ECJ said that whether a strike is “justified and proportionate” is a matter for national courts, but that in assessing proportionality (Viking), the national court must examine whether a union taking industrial action had “other means at its disposal which were less restrictive of freedom of establishment” and had “exhausted those means”. These requirements impose significant restrictions on unions — already subject to highly restrictive UK industrial action laws. Unions are placed in an invidious position, facing the threat of bankruptcy through an award of substantial damages if industrial action is ruled, after the event, to have been disproportionate or premature.

An attempt by the European Commission to resolve this conflict through regulation, known as the draft Monti II Regulation, was abandoned in September 2012, after the member states failed to agree. As a result, the legal position under European Community law remains as set out in Viking and Laval.