Malta EU update January 08

Two judgements delivered by the European Court in the space of a week have re-affirmed that the right to collective action, including the right to strike is a fundamental right and forms part of community law.

The two judgments were delivered in the Viking case and the Laval case. The circumstances of the cases were as follows. In the Viking case, a Finnish passenger shipping company called Viking line owned and operated a ferry under a Finnish flag and had a predominantly Finnish crew who benefited from a collective agreement negotiated by the Finnish Seamen’s Union. Legal proceedings were initiated when Viking decided that it would be better off if its ferry was registered as an Estonian ship. On the other hand in the Laval case, Swedish unions took action against a Latvian construction company Laval over the working conditions of Latvian workers refurbishing a school in Sweden. Laval refused to sign a collective agreement, and a blockade of the work place was initiated by the trade unions.

In both judgments the Court had to consider two basic rights under EU laws, the right to freedom to provide services and the right to strike. Both rights may be considered to be fundamental rights, which Member States must guarantee a right to exercise. The proper exercise of one of these rights may however impede or limit the exercise of the other; hence the Court was faced with the challenge of devising a robust interpretation of the concept of fundamental freedoms

 In its conclusions in the Viking case the Court held that where objectively justified, industrial action may be taken even if this limits the freedom of establishment or the freedom to provide services. Such an objective justification must be based on the protection of workers and it must be suitable to ensure the achievement of the legitimate objective pursued without going beyond. A threat to strike so as to force an employer to conclude a collective agreement does not fall under the scope of the protection of workers jobs or working conditions, hence acting as an obstacle to the freedom of establishment.

The Court maintained this thinking in the Laval case, where in its conclusions it stated that one must balance the right to industrial action with the employer’s competing EU rights; hence the right to strike may be restricted in certain instances. Industrial action, the Court held, can be justified as long as motivated by public-interest objectives such as the protection of workers and the prevention of social dumping. The court went on to state that such a right cannot be exercised when the demands of the trade unions exceed the extent of protection provided to workers under EU directives and clearly defined in national legislation. Any such action would be considered to be a restriction on the freedom to provide services.

The two court judgments illustrate that the freedom of movement is not an all-embracing restriction on the right to take collective action and inversely collective action cannot be placed outside the provisions on freedom of movement. For industrial action to co-exist with the right to freedom of movement, even if in practice it places some restriction on that freedom then such action must be legitimate and proportionate. 

European Union leaders sign Lisbon Treaty

On the 13^th of December EU leaders met in a summit in Lisbon to put pen to paper on a new EU Treaty. The Treaty of Lisbon, also known as the Reform Treaty is the result of years of negotiating between EU member states. If successfully ratified by all member states then it would carry out some of the reforms previously proposed in the European Constitution, which was however rejected by France and The Netherlands in popular referendums. The ratification process is already underway with Hungary having already ratified the Treaty on the 17^th of December through a parliamentary vote.

The new Treaty unlike the botched constitution does not replace but amends the existing treaties of the European Union and introduces various new measures. The number of European parliamentarians will fall from the present 785 to 751 at the next round of MEP elections in June 2009, with Malta gaining an extra seat.

The European Commission will also have fewer commissioners hence not every member state will have a commissioner as from 2014 when the number of commissioners will drop from 27 to 17. Such commissioners will be appointed for a period of five years and will rotate among member states.

The Charter of Fundamental Rights of the European Union will form part of the new Treaty, and this will give EU citizens a catalogue of rights legally binding on EU institutions and bodies and on member states when implementing EU law. However such Charter will not be legally binding for all EU member states since Britain and Poland have been granted opt-outs. In fact both countries insisted on the inclusion of a protocol to prevent the full application of the Charter by the European Court of Justice in their countries, although it would still bind the EU institutions and apply to the field of EU law.

The Reform Treaty has also introduced a new voting system which will come into force in 2014. A decision can only be made if it has the backing of 55% of the EU states representing 65% of the bloc’s population.

Unanimity is still required in foreign and defence policy, social security, taxation and cultural affairs.

Following the eventual successful ratification by all member states the Lisbon Treaty will enter into force as from the 1^st of January 2009.

© MALTA-EU LEGAL BRIEF