"Acties Zweedse vakbonden tegen Letse bouwonderneming niet strijdig met EU-wetgeving" (en)

EUOBSERVER / BRUSSELS - Swedish workers' rights to take industrial action against foreign companies who refuse to accept Swedish labour agreements is compatible with EU rules on free movement, the European Commission has hinted ahead of a landmark court ruling in the EU court.

The commission on Tuesday (31 January) handed its final statement on the so-called "Vaxholm case" to the European Court of Justice (ECJ) in Luxembourg, a day after the Swedish government gave the details of its position to the same court.

"I'm completely confident that Swedish legislation is in line with European law," Swedish employment minister Hans Karlsson told Swedish media on the day of the handover.

"We cannot have a labour market with some conditions for Swedish and other labour markets, with worse conditions for people from other countries," the minister added.

A spokesperson for the commission declined to reveal the content of the commission's statement, but opted to repeat an earlier commission statement on the case.

"First, there is no reason to call into question the Swedish industrial relations system, secondly this system has to be applied while respecting the fundamental freedoms of the treaty, and thirdly, the commission is convinced that it is possible to reconcile the two," the spokesperson told a press conference in Brussels.

Scandinavian-style collective agreements are established annually between both sides of industry, and are treated with equal validity as market rules in other EU countries that use legislation rather than handshakes for labour agreements.

The Latvian construction company, Laval, was hired to build a school in the city of Vaxholm, but the Swedish construction trade union, Byggnads, pressured Laval to sign the Swedish collective agreement on wages and conditions for the sector.

Laval refused however, claiming it worked under a Latvian agreement, and the conflict escalated as Swedish trade unions put the Latvian company under blockade forcing the company into bankruptcy.

The "Vaxholm case" was brought before the ECJ on behalf of the Latvian construction company as well as by the Swedish labour court in April 2005, to test its compliance with EU freedom of movement law.

Countries divided in pro and anti groups

The secretary general of the European Trade Union Confederation (ETUC), John Monks, on Tuesday issued a statement showing support for the Swedish line.

"This case is of great political importance, because if Europe's unions lose, there is a real risk of working people turning against free movement, the single market, and the EU itself."

"Europe is not just a single market, it is also a community that shares strong social values," he said.

According to the ETUC, Finland, France, Denmark, Austria and Germany support the Swedish government, with France, Luxembourg and Spain considering to join in the group.

Latvia and Poland, and possibly Estonia and Lithuania reportedly support Laval's stance in the matter, saying the Swedish model is discriminatory against foreign workers and in breach of EU treaties on free movement of workers and services.

Latvian president Vaira Vike-Freiberga on Monday (30) January) in an interview with Swedish TV-channel said "The Swedish government is protectionist in the sense that it has given up the power over the labour market to the unions."

"When we applied to the EU we adopted hundreds of agreements to enter a union which promotes free movement," she noted.