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 gives all workers the fundamental right to negotiate and conclude collective agreements and to take collective action, including strike action, to defend their interests. 


However, European Union law has taken a restrictive approach to workers’ collective rights where 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 was seen in 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 two well-known cases, the ECJ acknowledged the “fundamental” and “overriding public importance” of the right to take industrial action under Article 28. However, the ECJ then 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. In addition, said the ECJ, under European Union law, industrial action must pursue a legitimate aim, and be capable of justification 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 (“proportionate”) to achieve the aim. Finally, before taking industrial action, unions must exhaust all other available means of achieving the aim that impact less dramatically on the employer’s EU freedoms.


In other words, these two rulings impose 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. 


A further ECJ ruling, this time in the context of business transfers, also illustrates the ECJ’s troubling pro-business stance when determining disputes involving collective rights. In Alemo-Herron v Parkwood Leisure Limited [2013] EUECJ C-426/11 (see Chapter 12), a case brought by UNISON to enforce national and sectoral collective bargaining agreements following a business transfer, the ECJ ruled against the transferred workers, stating that European social rights must be “balanced” against the needs of business to make changes “necessary to carry on its operations”.