Laval - a case concerning equal treatment in the Swedish labour market

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Swedish collective agreements shall apply to all wage earners in the Swedish labour market. Workers shall have equal wage for equal work irrespective of being employed by a Swedish or a foreign company, or if they are in Sweden temporarily or permanently.
This is the essential of the Laval case. It was the Latvian company Laval un Partneri, which in 2004 was charged with the refurbishing of school premises in Vaxholm outside Stockholm. The Latvian company turned down the claims of the Swedish Building Workers’ Union to conclude a collective agreement, with reference to an existing agreement with the Latvian union. The Swedish Building Workers’ Union wanted to guarantee equal treatment of workers in the Swedish labour market and put the work under a boycott. The case was submitted to the Swedish Labour Court and later in the European Court of Justice. In December 2007, the European Court of Justice stated in its judgement that the Swedish Act on Posting of Workers prevents Swedish unions from claiming equal collective agreements for Swedish and foreign companies operating in Sweden.

These restrictions that hinder the Swedish unions from claiming equal treatment of workers in the labour market could be set aside by making minor amendments of the Swedish legislation.

The non-Socialist Government in Sweden has forfeited its possibility to safeguard collective agreements in line with the Swedish model. They have, on the other hand, submitted a bill called Lex Laval with reference to the verdict of the European Court of Justice. This bill stipulates that it is, in practice, optional for foreign companies to apply Swedish wage and employment conditions. This opens the doors for low-wage competition in the Swedish labour market, which will result in the wages gradually being forced down for all workers in the labour market.

The non-Socialist Government’s bill would signify restrictions of the unions’ historical rights to independently negotiate and conclude collective agreements with foreign companies and the right to resort to industrial actions in order to reach an agreement. The Government’s bill is not justified by the claims from the European Union.

The Government praises the Swedish model, but in practice their actions tear it into pieces and undermine the union movement. In the long run, this is simply a matter of survival of the Swedish model based on collective agreements. The LO therefore demands that the Government’s bill be withdrawn and revised.

The Social Democratic members of the Swedish Parliament have claimed a suspension of Lex Laval referring to impending restrictions of the freedom of association and the right to negotiations. Certain constitutional rights are distinctively secured, which implies that Parliament might be granted an extra year of consideration by so-called suspension.

The Social Democrats in Sweden have promised to amend the legislation to make it possible for the trade union organisations to safeguard their members’ interests. The Social Democrats have therefore formed a working party together with the three trade union organisations at central level, i. e. LO, TCO (white-collar workers) and Saco (academics), to deliver a new legislation in the event there will be change of Government this fall.

The suspension does not solve the problems, only postpones them. If the non-Socialist Government remains in power after the general elections on September 19, Lex Laval will become a reality.