The International Transport Workers' Federation and The Finnish Seamen's Union

Yesterday the ECJ delivered yet another judgment in one of the most fascinating areas of European law – the intersection and conflict between social policy and European internal market laws. The judgment in the matter C-438/05 The International Transport Workers' Federation and The Finnish Seamen's Union is a preliminary ruling in a reference from the Court of Appeal (Civil Division) (England and Wales).

The case concerns a Finnish shipping company (Viking Line) that decided to reflag its ship to Estonia in order to benefit from lower wage costs. The International Transport Workers’ Federation took collective action on behalf of the Finnish seamen in order to dissuade Viking Line from effecting the proposed changes. Viking Line felt aggrieved by the action because it was of the view that it breached the company’s freedom of establishment per Article 43 ECT.

The EU Observer reports that the case ‘was closely followed across the EU as it appeared to encapsulate much of the debate on whether cheaper labour from eastern European member states - who joined the EU in 2004 - would undermine the higher labour protection of other member states, particularly in Scandinavian countries...Trade unions billed the case as one where the EU's internal market rules were pitted against social rights.’

The ECJ held inter alia that, although the right to strike is a fundamental right, the exercise of that right may be subject to restrictions. Those restrictions include the prohibition of collective action that is aimed at inducing an enterprise to enter a collective agreement that would preclude it from exercising its freedom of establishment. Another important aspect of this judgment is the emphasis that an undertaking may rely on Article 43 ECT as against a trade union. It will be left to Court of Appeal to apply the interpretative guidelines to the facts of the case.

To my mind, this is yet another example of the ECJ emphasising the free market ideal over social rights. Notwithstanding broader concerns, I must admit that I do think that the Court got it right on this occasion. The alternative would have denied workers in new Member States of some of the benefits of the internal market. Yet as part of the wider conflict between socially protective norms and the establishment of the internal market, there will certainly be many who feel that the EU is indirectly dismantling rights that the European polity has struggled to establish over the centuries.