News Briefs
European Court rules employers can pay foreign workers less
Jan 17, 2008 11:41 AM
The American model of union-busting has advocates in Europe, too. The European Court of Justice, Europe’s top court, ruled in December against a Swedish trade union, saying that it illegally blocked a Latvian construction company from completing a job in Sweden when the company refused to pay its Latvian workers the higher Swedish wage rate. The court held that unions cannot force foreign companies to observe local wage deals, a decision that Scandinavian officials called a shock for the “Nordic social model,” which places high emphasis on the rights of workers to obtain better deals through collective bargaining.
The case involved construction workers from a Latvian company employed to renovate and expand a school in Sweden. When the employers failed to agree on pay rates for workers brought from Latvia, union members picketed the site and unionized electricians joined the action. The high court backed the Latvian employers, saying that because pay levels in Sweden rely on collective-bargaining agreements and are not set by Swedish law, the trade unions had no right to try to force the Latvian company to pay its workers the local higher wage rate.
The court also found that collective action to force foreign companies into wage negotiations was a restriction on “the freedom to provide services.” Only collective action already guaranteed in national law is permissible under EU law.
International Herald Tribune, Dec. 18
