¹ Case C-341/05, Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet [2007] ECR I-11767 (hereinafter, ‘Laval ‘). An application for the case to be heard by the accelerated procedure was refused: order of 15 November 2005. See Eklund, R, ‘The Laval Case’ (2006) 35 ILJ 202 CrossRefGoogle Scholar.

² Case C-438/05, Viking Line ABP v The International transport Workers’ Federation, the Finnish Seaman’s Union, judgment of 11 December 2007 (hereinafter, ‘Viking ‘); preceded by judgments in the High Court, [2005] EWHC 1222, [2005] 3 CMLR 29 (QB) and Court of Appeal, [2005] EWCA Civ 1299, [2006] 1 CMLR 27.

³ ‘The idea that you replace an employee with a cheaper one coming from somewhere else’: Mr Zitting, chairman of the FSU, quoted by Gloster J in the High Court, above n 2, para 119.

⁴ For a full description of the facts, see Waller LJ in the Court of Appeal, above n 2, para 24.

⁵ This is discussed in more detail by Sciarra in this volume.

⁶ ITF had its base in London and so jurisdiction was established pursuant to the Brussels Regulation 44/2001, [2001] OJ L12/1.

⁷ Court of Appeal, above n 2.

⁸ This was probably enough to give a Community element to the dispute. The court gave no indication that it thought this case concerned an abuse of rights situation. For a full description of the dispute, see Woolfson, C and Sommers, J, ‘Labour Mobility in Construction: European Implications of the Laval un Partneri Dispute with Swedish Labour’ (2006) 12 EJIR 49 Google Scholar.

⁹ Laval, above n 1, paras 24–5.

¹⁰ Ibid, para 36.

¹¹ Ibid, para 34.

¹² Ibid, para 37.

¹³ Ibid, para 38.

¹⁴ Ibid, para 39.

¹⁵ Woolfson and Sommers, above n 8, 56.

¹⁶ Laval has now ceased its activities in the construction industry, focusing instead on the food industry: ‘EU Court: Swedish union breached Latvian company’s rights’, International Herald Tribune, 18 December 2007.

¹⁷ [2006] OJ L376/36.

¹⁸ Case C-438/05, Viking, Opinion of 23 May 2007, para 23.

¹⁹ Case C-341/05, Laval, Opinion of 23 May 2007, para 50.

²⁰ Ibid, para 78.

²¹ Ibid, para 84.

²² Viking, above n 2, para 37.

²³ Ibid, paras 39–41; and Laval, above n 1, para 88.

²⁴ See eg Case C–158/96, Kohll v Union des caisses de maladie [1998] ECR I–1931, paras 17–19.

²⁵ Case C-112/00, Schmidberger [2003] ECR I-5659, para 77.

²⁶ Case C-36/02, Omega [2004] ECR I-9609, para 36.

²⁷ Viking, above n 2, para 46; and Laval, above n 1, para 94.

²⁸ Viking, ibid, para 45; and Laval, ibid, para 93.

²⁹ The European Court of Human Rights has been slow to recognise the right to strike as a fundamental right. The closest it has come is in UNISON v UK (App no 53574/99) [2002] IRLR 497, para 35: ‘The Court recalls that while Article 11 § 1 includes trade union freedom as a specific aspect of freedom of association this provision does not secure any particular treatment of trade union members by the State. There is no express inclusion of a right to strike or an obligation on employers to engage in collective bargaining. At most, Article 11 may be regarded as safeguarding the freedom of trade unions to protect the occupational interests of their members. While the ability to strike represents one of the most important of the means by which trade unions can fulfil this function, there are others.’ See further Ewing, K, ‘The Implications of Wilson and Palmer ‘ (2003) 32 ILJ 1 CrossRefGoogle Scholar.

³⁰ See further Silvana Sciarra’s chapter in this volume, where she emphasises the Court’s use and misuse of the language of labour law.

³¹ Citing such instruments as the European Social Charter 1961—to which express reference is made in Art 136 EC—and ILO Convention No 87 concerning Freedom of Association and Protection of the Right to Organise.

³² Citing the Community Charter of the Fundamental Social Rights of Workers 1989 (also referred to in Art 136 EC), and the Charter of Fundamental Rights 2000: Viking, above n 2, para 43; and Laval, above n 1, para 90.

³³ Although cf Davies’ description of ‘the Court’s “defensive” recognition of the right to strike’, which colours the way in which the right can be used: Davies, A, ‘One Step Forward, Twp Steps Back? The Viking and Laval cases in the ECJ’ (2008) 37 ILJ 126, 139CrossRefGoogle Scholar.

³⁴ Viking, above n 2, para 44.

³⁵ For discussion, see Novitz, T, International and European Protection of the Right to Strike (Oxford, Oxford University Press, 2002) 163–7Google Scholar.

³⁶ This point was not discussed at all in Laval.

³⁷ Case C-67/96, Albany [1999] ECR I-5751.

³⁸ Viking, above n 2, para 49.

³⁹ Ibid, para 51.

⁴⁰ Ibid, para 53, citing Case C-519/04 P, Meca-Medina and Majcen v Commission [2006] ECR I-6991. For good measure, at para 54 it cited three cases where the Court had found that the terms of collective agreements were not excluded from the scope of the Treaty provisions on freedom of movement for persons: Case C-15/96, Schöning-Kougebetopoulou [1998] ECR I-47; Case C-35/97, Commission v France [1998] ECR I-5325; and Case C-400/02, Merida [2004] ECR I-8471, cases concerning Art 7(4) of Regulation 1612/68, which expressly refers to collective agreements.

⁴¹ Viking, above n 2, para 65.

⁴² A point that the court appears to acknowledge, ibid, in para 36.

⁴³ A point recognised by the Court, at least to a limited extent in Joined Cases C-193 & 194/87, Maurissen and European Public Service Union v Court of Auditors [1990] ECR I-95, para 35: ‘Community institutions and bodies are required to respect such trade union activities as may prove necessary in order to ensure effective participation in that consultation process. Freedom of trade union activity entails the possibility of trade unions participating in such consultation and thus taking part in decision-making.’

⁴⁴ Viking Opinion, above n 18, para 34.

⁴⁵ Ibid, para 40.

⁴⁶ Ibid, paras 37–8.

⁴⁷ He argued ibid, at para 39, that: ‘One might note that Schmidberger concerned an action brought by a private party against the State. Such a procedure is common in many, if not all, national legal systems, where a constitutional provision cannot be relied upon as an independent cause of action in civil proceedings. It is an alternative way of inducing the horizontal effect of constitutional rights, namely by deriving from those rights an obligation for the State to intervene in situations where one private party’s constitutional rights are under threat from the actions of another. A corollary and equally common way of giving constitutional rights normative force in horizontal relations is to consider them as binding on the judiciary when adjudicating a case between private parties. Whether it interprets a contractual clause, rules on an action for damages, or decides upon a request for an injunction, the Court must, as an organ of the State, hand down a decision that respects the constitutional rights of the parties. The demarcation of individual rights in these ways is known as “mittelbare Drittwirkung “, or indirect horizontal effect. The result is that constitutional rules that are addressed to the State translate into legal rules applying between private parties, illustrating that “the government is the third party to every private suit and is so in the very form of the law and the judge who administers it”‘ (footnotes omitted).

⁴⁸ Ibid, para 43.

⁴⁹ Ibid, para 41.

⁵⁰ Ibid, para 42.

⁵¹ Case C-415/93, Union Royale Belge des Sociétés de Football Association ASBL v Bosman [1995] ECR I-4921.

⁵² Case C-281/98, [2000] ECR I-4139.

⁵³ Ibid, para 49.

⁵⁴ For further discussion on direct effect, see Alan Dashwood’s chapter in this volume.

⁵⁵ Viking Opinion, above n 18, para 55.

⁵⁶ Case 36/74, [1974] ECR 1405.

⁵⁷ Laval Opinion, above n 19, para 156.

⁵⁸ Ibid, para 157.

⁵⁹ In Laval, the court’s approach was almost Delphic: above n 1, paras 97–8.

⁶⁰ Viking, above n 2, para 61.

⁶¹ Laval, above n 1, para 84.

⁶² AG Mengozzi, above n 19, para 238 says: ‘What is valid for the Member States must also be valid, in my view, for private persons whose action has a collective effect on the labour market and the cross-border provision of services’ (emphasis added).

⁶³ Syrpis, P and Novitz, T, ‘Economic and Social Rights in Conflict: Political and Judicial Approaches to their Reconciliation’ (2008) 33 EL Rev 411 Google Scholar.

⁶⁴ Case C-76/90, Säger [1991] ECR I-4221, para 12; Case C-55/94, Gebhard [1995] ECR I-4165.

⁶⁵ Viking, above n 2, para 72.

⁶⁶ Ibid, para 73.

⁶⁷ Ibid, para 74.

⁶⁸ [1997] OJ L18/1.

⁶⁹ 5th Recital to the Directive.

⁷⁰ 13th Recital of the Directive.

⁷¹ Laval, above n 1, para 70.

⁷² Ibid, paras 83–4. Note the restrictive reading of Art. 3(10) in Case C-319/06 Commission v Luxembourg, judgment of 19 June 2008, paras. 30–31 and 49–50.

⁷³ Confirmed in Recital 17.

⁷⁴ Case C-346/06, Dirk Rüffert v Land Niedersachsen, Opinion of 20 September 2006, paras 82–3.

⁷⁵ Case C-346/06, Dirk Rüffert v Land Niedersachsen, judgment of 3 April 2008, para 33 (hereinafter, ‘Rüffert ‘).

⁷⁶ Laval, above n 1, para 81.

⁷⁷ Ibid, para 80. See also Rüffert, above n 75, para 33.

⁷⁸ Above n 75.

⁷⁹ Laval, above n 1, para 8; and Rüffert, above n 75, para 24. All other terms and conditions laid down by Art 3(1) of the Posted Workers Directive have been implemented by Swedish law: Laval, above n 1, para 63.

⁸⁰ Above n 75.

⁸¹ Ibid, para 26.

⁸² Ibid, para 31. Cf AG Bot’s Opinion, above n 74.

⁸³ Cf AG Mengozzi, above n 19, especially paras 179–181 ff. He concludes at para 187: ‘It is therefore beyond doubt, in my view, that the right to take collective action granted by Swedish law to trade unions to enable then to impose the wage conditions laid down or governed by Swedish collective agreements provides a suitable means of attaining the aim of protecting posted workers laid down in Article 3 of Directive 96/71.’

⁸⁴ Laval, above n 1, para 67.

⁸⁵ Ibid, para 71.

⁸⁶ Laval Opinion, above n 19, para 132.

⁸⁷ This provides that in the absence of a choice of law by the parties, ‘the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract. The country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country’. See also Art 8(2) of the Rome I Regulation 593/2008 (OJ [2008] L 177/6).

⁸⁸ If this reasoning is correct, then Arts 3(7) and (10), as derogations to derogations, must be particularly narrowly construed.

⁸⁹ This issue is considered further in Professor Dashwood’s chapter in this volume.

⁹⁰ Laval, above n 1, para 85.

⁹¹ Laval Opinion, above n 19, para 149.

⁹² Ibid, para 150.

⁹³ See, by analogy, the Court’s interpretation of the Equal Pay Directive 75/117 and its relationship with Art 141 EC. In Case 96/80, Jenkins v Kingsgate [1981] ECR 911, the Court said that Art 1 ‘is principally designed to facilitate the practical application of the principle of equal pay outlined in Article [141] of the Treaty [and] in no way alters the content or scope of that principle as defined in the Treaty’.

⁹⁴ See also AG Mengozzi, above n 19, para 154.

⁹⁵ Laval, above n 1, para 74. See also Case C-319/06 Commission v Luxembourg, judgment of 19 June 2008, para. 33.

⁹⁶ Ibid, para 75.

⁹⁷ Ibid, para 76. Cf AG Mengozzi, above n 19, who reverses the priority (para 171): ‘Article 3 of Directive 96/71 has a twofold aim of providing minimum protection for posted workers and equal treatment as between service providers and domestic undertakings in similar circumstances. Those two requirements must be pursued concurrently’.

⁹⁸ Viking Opinion, above n 18, para 57.

⁹⁹ Ibid, para 58.

¹⁰⁰ Ibid, para 59.

¹⁰¹ Ibid, para 60.

¹⁰² Ibid, para 65.

¹⁰³ Ibid, para 67.

¹⁰⁴ Ibid, para 68.

¹⁰⁵ Ibid, para 70.

¹⁰⁶ Laval Opinion, above n 19, para 273.

¹⁰⁷ Ibid, para 280.

¹⁰⁸ Viking, above n 2, para 78; and Laval, above n 1, para 104.

¹⁰⁹ Viking, ibid, para 79; and Laval, ibid, para 105.

¹¹⁰ See also the earlier decision in Joined Cases C-270 & 271/97, Deutsche Post AG v Elisabeth Sievers and Brunhilde Schrage [2000] ECR I-929.

¹¹¹ For a discussion of this term, see C Joerges and F Rödl, ‘“Social Market Economy” as Europe’s Social Model?’, EUI Working Paper LAW No 2004/8, 19, who argue that ‘this concept contained an ordoliberal basis which was complemented by social and societal policies, whose aims and instruments were supposed to rely on market mechanisms’. See also C Joerges ‘Democracy and European Integration: A Legacy of Tensions, a Reconceptualisation and Recent True Conflicts’, EUI Working Paper LAW No 2007/25.

¹¹² Working Group XI on Social Europe (CONV 516/1/03 REV 1), para 17.

¹¹³ Viking, above n 2, para 77.

¹¹⁴ Ibid, para 80.

¹¹⁵ Ibid, para 81.

¹¹⁶ Viking’s cost savings would presumably have come from its decision not to renew shortterm employment contracts and redeploying employees on equivalent terms and conditions: see question 10 referred by the national court.

¹¹⁷ Viking, above n 2, para 83.

¹¹⁸ Ibid, para 84.

¹¹⁹ Ibid, para 86.

¹²⁰ Para. 86, citing Syndicat national de la police belge v Belgium (App no 4464/70) (1975) Series A no 19; and Wilson, National Union of Journalists v United Kingdom (App nos 30668/96, 30671/96 and 30678/96) ECHR 2002-V, § 44.

¹²¹ Viking, above n 2, para 87.

¹²² Ibid, para 88.

¹²³ <http://www.itfglobal.org/news-online/index.cfm/newsdetail/1842> accessed 26 August 2008.

¹²⁴ Laval, above n 1, para 103.

¹²⁵ Ibid, para 107.

¹²⁶ Ibid, para 108.

¹²⁷ Ibid, para 110. The Court has insisted on the requirement of transparency in other fields too, eg public procurement and state aid: Case C-513/99, Concordia Bus Finland v Helsingin jaupunki [2002] ECR I-7213, paras 62–7, discussed by Reich, N, ‘Free Movement v. Social Rights in an Enlarged Union: The Viking and Laval cases before the European Court of Justice’ (2008) 9 German Law Journal 125 Google Scholar.

¹²⁸ He had suggested that if the gross wage paid by Laval (ie approx €1,500 per month plus supplementary benefits) was not the same as or essentially similar to that determined in accordance with the Byggnadsarbetareförbundet agreement fall-back clause (which he thought was the case, but could not be certain), then the collective action, insofar as it sought to impose the rate of pay provided by the Byggnadsarbetareförbundet agreement, would not be disproportionate to the objectives of protecting workers and combating social dumping (Laval Opinion, above n 19, para 273).

¹²⁹ Laval, above n 1, para 116.

¹³⁰ Ibid, para 115.

¹³¹ Case C-338/04, [2007] ECR I-1891.

¹³² Laval, above n 1, para 117.

¹³³ Ibid, para 118.

¹³⁴ Barnard, C, ‘Justifications, Proportionality and the Four Freedoms: Do they Really Protect State Interest?’ in Barnard, C and Odudu, O, The Outer Limits of EU Law (Oxford, Hart Publishing, forthcoming)Google Scholar.

¹³⁵ See also AG Mengozzi in Laval Opinon, above n 19, paras 80–2.

¹³⁶ This is subject to the UK’s and Poland’s opt-out under Protocol 7 of the Lisbon Treaty: see Barnard, C, ‘The ‘Opt-Out’ for the UK and Poland from the Charter of Fundamental Rights: Triumph of Rhetoric over Reality?’ in Griller, S and Ziller, J (eds), The Treaty of Lisbon: EU Constitutionalism without a Constitutional Treaty (Vienna, Springer, 2008)Google Scholar.

¹³⁷ See, eg Joined Cases 56 & 58/64, Consten and Grundig [1966] ECR 299, 345.

¹³⁸ AG Mengozzi also warned against adopting an interpretation of Art 49 of the Directive that impairs ‘the very substance of the right to take collective action to defined the interests of workers’ (Laval Opinion, above n 19, paras 142 and 251). See also Silvana Sciarra’s contribution to this volume, where she talks of the use and misuse of the language of labour law.

¹³⁹ Schmidberger, above n 25, para 82. For contemporary examples of the Court applying the margin of appreciation to states, see, eg Case C-250/06, United Pan-Europe Communications Belgium SA v Etat Belge, judgment of 13 December 2007; and Case C-244/06, Dynamic Medien, judgment of 14 February 2008, para 44. In the social field, the Court is also prepared to give states a considerable degree of ‘stretch’ in Case C-411/05, Palacios de la Villa v Cortefiel Servicios [2007] ECR I-8531. Sweeney, J, ‘A “Margin of Appreciation” in the Internal Market: Lessons from the European Court of Human Rights’ (2007) 34 LIEI 27 Google Scholar.

¹⁴⁰ Davies, above n 33, 143.

¹⁴¹ See, eg N Tait, G Parker and R Anderson, ‘First blood to unions in key EU pay case’, Financial Times, 24 May 2007; H Mahoney, ‘EU Court upholds trade unions’ rights’, eu.observer, 23 May 2007; but cf the more cautious ‘Viking and Laval: a Curate’s Egg and a Bad Egg’, press release of 9 January 2008, available at <http://www.unitedcampaign.org.uk/viking&laval.html> accessed 26 August 2008.

¹⁴² ‘Dumping social: les syndicates européens “déçus” par la Cour de Justice ‘, Le Monde. fr, 18 December 2007.

¹⁴³ <http://www.etuc.org/IMG/pdf_ETUC_Viking_Laval_-_resolution_070308.pdf> accessed 26 August 2008.

¹⁴⁴ H Mahoney, ‘EU court judgements affecting Irish treaty campaign’, euobserver.com, 6 May 2008. The TEEU said that the judgments showed ‘that the pendulum had “swung against workers’ rights and in favour of big business”‘. See also L Kirk, ‘Copenhagen asked to check workers; rights before EU Treaty ratified’, euobserver.com, 12 February 2008.

¹⁴⁵ ‘Laval case: disappointment of the ETUC’, <http://www.etuc.org/a/4401> accessed 26 August 2008.

¹⁴⁶ TULR(C)A 1992 s 219.

¹⁴⁷ In the light of Laval, heading (g) seems particularly vulnerable. Contrast this with the ILO’s Committee on Freedom of Association’s approach ‘organizations responsible for defending workers’ socio-economic and occupational interests should be able to use strike action to support their position in search for solutions to problems posed by major social and economic policy trends which have a direct impact on their members and on workers in general’. Report No 346, Case No 2506 discussed in Syrpis and Novitz, above n 63.

¹⁴⁸ Davies, above n 33, 146.

¹⁴⁹ Case C-212/06, Government of the French Community and Walloon Government v Flemish Government, judgment of 1 April 2008.

¹⁵⁰ See also TULR(C)A 1992 s 244(3). Even though it is all pegged to transnational disputes, ideas inevitably spill over from transnational disputes to national disputes.

¹⁵¹ BALPA is the British Airlines Pilot’s Association.

¹⁵² <http://www.balpa.org.uk/intranet/Media---Pr/BA%20Pilots%20Strike5.htm> accessed 26 August 2008.

¹⁵³ <http://www.balpa.org.uk/Media---Pr/BA%20Pilots%20Strike11.htm> accessed 26 August 2008.

¹⁵⁴ Joined Cases C-46 & 48/93 Brasserie du Pêcheur SA v Germany; and R v Secretary of State for Transport, ex p Factortame (Factortame III) [1996] ECR I-1029.

¹⁵⁵ Above n 2. Gloster J ran the interesting argument that it was not compatible with Art 14 ECHR (prohibition against discrimination) that workers have a fundamental right to strike to prevent women from being employed on ferry boats. In the same way, the exercise or enjoy ment of the right to take industrial action to prevent the re-flagging of a vessel could also be characterised as a fundamental right. She therefore concluded that fundamental rights could not be invoked to justify discrimination on the grounds of nationality. For a full discussion, see Davies, A, ‘The Right to Strike versus freedom of establishment in EC Law: The Battle Commences’ (2006) 35 ILJ 75 CrossRefGoogle Scholar.

¹⁵⁶ Laval, above n 1, paras 99–100.

¹⁵⁷ Viking, above n 2, para 65.

¹⁵⁸ See, eg Case 7/61, Commission v Italy [1961] ECR 317, 329, where Italy could not justify its ban on the import of pig meat because of economic difficulties with its own pig industry. See also Case C-324/93, R v Secretary of State for the Home Department, ex p Evans Medical Ltd (Generics (UK) Ltd intervening) [1995] ECR I-563. In Case 238/82, Duphar BV v The Netherlands [1984] ECR 523, para 23, the Court said Art 30 could not justify a measure whose primary objective was budgetary.

¹⁵⁹ Although the Court did not declare secondary industrial action invalid in itself.

¹⁶⁰ Laval, above n 2, paras 36 and 110.

¹⁶¹ Ibid, paras 67–71.

¹⁶² Ibid, para 63. See also para 71. It also did not like the rigidity of the Swedish system: eg the collective agreement was for an hourly not a monthly rate (para 25).

¹⁶³ Ibid, para 100.

¹⁶⁴ Ibid, para 35.

¹⁶⁵ Ibid, para 34.

¹⁶⁶ The reporting judge in Laval was Estonian.

¹⁶⁷ For a full discussion of the views of the new Member States, see Bercusson, B, ‘The Trade Union Movement and the European Union: Judgment Day’ (2007) 13 ELJ 279 CrossRefGoogle Scholar.

¹⁶⁸ A report in the FT (S Wagstyl, J Cienski, K Eddy and T Escritt, ‘Gone west: why Eastern Europe is labouring under an abundance of jobs’, FT, 16 January 2008) shows that with migration of skilled workers in the building industry from East to West, labour costs for locals have risen significantly, with a 30% increase in nominal costs in Latvia in the year to Septmeber 2007, rises of more than 20% in Romania, Estonia and Lithuania and 12% in Poland. However, wage differentials between West and East are still vast: hourly labour costs are about €28 in Germany compared to €8 in the Czech Republic, €7.50 in Poland and €4 in Romania. On the other hand, in terms of labour productivity, Germany ranks eighth, while the Czech Republic is 29th, Poland 33rd and Romania 38th. Cheaper labour costs in Romania help to explain why the Finnish firm Nokia is closing its plant in Bochum in Germany and moving it to Cluj in Romania, where average pre-tax salaries are €450 a month, one-seventh of the level in Bochum: ‘Nokia finds Romania’s labour force, closes German plants’, <http://uk.reuters.com/article/technologyNews/idUKL2488834520080125> accessed 26 August 2008.

¹⁶⁹ ‘The Court of Justice and the social market economy: The emergence of an ideal and the conditions for its realization’, paper presented at the 47th Leiden-London meeting, June 2008.