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Analysis

Laval case brings new Swedish law

| 25.03.2010 | Text: Kerstin Ahlberg, editor EU & Arbetsrätt

After a lot of to-ing and fro-ing the Swedish Parliament passed legislation on 24 March to reflect the Court of Justice of the European Union's judgement in the much-debated Laval case.

Opposition parties failed to postpone the Parliament's decision by one year, and have promised to tear up the new 'Laval law' if they win parliamentary elections this autumn. They say the law limits the right to take industrial action in a way which goes further than what is stipulated in EU law, and that this would have serious consequences for Sweden's labour market model. 

The intention is that the parties to the labour market also in future will be able to make sure foreign companies bringing foreign workers to Sweden provide wages and working conditions in accordance with Swedish collective agreements.  

There will be no law imposing a minimum wage nor a system for a universal collective agreement. The main change is a reduction in trade unions' powers to take industrial action to force foreign companies to sign up to a collective agreement, should they fail to do so voluntarily. 

Four conditions must be met:

  • expected conditions must reflect conditions in a central and national collective agreement
  • the conditions can only cover minimum wage or other minimum conditions covered by the Swedish law on the posting of workers
  • and they must be more beneficial for the posted workers than the conditions laid down in the law on the posting of workers
  • But - and this point has received the brunt of the criticism - even if these three conditions are met, no industrial action will be allowed if the employer can show his employees enjoy 'essentially' the same benefits as granted in the Swedish collective agreement. 

This last condition, critics say, means employers can protect themselves against industrial action simply by entering a sham contract, allowing them to finish the job and send the workers back home before the unions have had time to gather evidence of a false deal. At that stage it is of course too late to try to secure working conditions reflecting a Swedish collective agreement. 

There is also criticism against the fact that industrial action is not allowed even in cases where foreign workers have joined a Swedish trade union. This means unions will not be able to look after the interests of their own members.

So Swedes are still arguing over what should and must be done, more than two years after the judgement of the Court of Justice of the European Union. This is in stark contrast to the situation in Denmark, where a similar case was solved within months with all parties agreeing on the outcome.  

Furthermore, even the judges in Sweden's Labour Court disagreed when making the Swedish Building Workers´ Union and the Swedish Electricians' Union liable to Laval for damages incurred as a result of the industrial action at the school project in Vaxholm - which turned out to be illegal according to EU law, yet legal according to Swedish law.

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