European Union law





In key respects, European Union (EU) law has not supported the right to strike. 


As Law at Work goes to press, the potential impact of the UK’s decision to leave the EU on employment rights, including the right to strike, is very unclear. One particular area of industrial action law that is likely to be affected is the impact of the EU Charter of Fundamental Rights of the EU (the EU Charter) on cross-border industrial disputes. This is explained below. As Law at Work goes to press, the UK has committed to withdraw from the EU Charter on the day that the country leaves the EU. This has been written into the text of the EU Withdrawal Act 2018 (see box, pages 19-21).


Article 28 of the EU Charter gives all workers of EU member states the fundamental right to negotiate and conclude collective agreements and to take collective action, including strike action, to defend their interests. Despite this clear language, several key ECJ rulings have damaged the ability of unions to organise strikes to defend their members’ wages and collectively agreed terms and conditions when an employer from another EU member state wants to undercut those terms by importing cheaper labour.
At issue in these rulings has been a clash between the four “EU freedoms”: free movement of goods, capital, services and people and the right of workers to strike to protect their working conditions. 




The two key ECJ rulings are 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 Viking, the purpose of the strike was to stop a Finnish shipping company reflagging its vessel in Estonia, where it would be able to take on less expensive Estonian crew; and



• in Laval, the purpose of the strike was to force a building company to abide by a Swedish collective agreement instead of employing Latvian workers on cheaper terms and conditions. 





In both cases, the ECJ acknowledged the “fundamental” and “overriding public importance” of workers’ right to strike. But at the same time, the judges went on to impose severe limitations on that right, concluding that both strikes were a disproportionate and unlawful interference with the employer’s EU fundamental freedoms. Here is a summary of the ECJ’s key conclusions: 




• the right to strike must always be exercised in a manner compatible with other EU laws, including the “four freedoms”;



• industrial action must always have a legitimate aim justifiable in the public interest, such as the protection of workers and jobs under threat;




• the form of industrial action must be proportionate (that is, suitable) to the aim, taking into account its effects, for example, on the employer, suppliers and the wider economy; and




• before taking industrial action, unions must have exhausted all other available means of achieving the aim that would impact less dramatically on the employer’s EU freedoms.





These rulings have imposed very significant restrictions on unions in disputes with a cross-border element. Unions have faced the threat of potential bankruptcy through an award of substantial, potentially even uncapped damages if a court were to decide, after-the-event, that their chosen form of industrial action was “disproportionate” or “premature”, or that the aim was not “legitimate” and that a business should be compensated for resulting commercial losses. 





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


The Viking and Laval rulings have also been applied by the European Free Trade Area (EFTA) court to prevent otherwise lawful industrial action: