The Laval judgement: Swedish government wants more power to unions

A government-appointed commission has now been asked to come up with proposals for how to make it easier for trade unions to monitor the working conditions for posted workers. But the Confederation of Swedish Enterprise says the government’s ambitions are incompatible with EU law.

The Laval judgement centred on a blockade carried out by two trade unions with the aim of making a Latvian company sign a standard Swedish collective agreement. When the Court of Justice of the European Union had had its say, Sweden was forced to limit trade unions’ right to take industrial action against companies employing posted workers. But now Sweden’s new centre-left government says the restrictions introduced in the so-called lex Laval went further than necessary. 

The premise for lex Laval is indeed that foreign employers should pay their workers and grant them other terms of employment according to the minimum conditions set out in Swedish collective agreements. However, if the companies will not voluntarily sign an agreement with the trade union agreeing to this, the union cannot force them to do it. The previous government had argued it would be in breach of EU law if trade unions were allowed to take industrial action against employers who in some way were able to “demonstrate” that their employees already were employed under similar terms. The problem is that without an agreement with the employer, the trade unions cannot monitor whether the workers really do get the right wages and other terms they are entitled to. 

Protecting collective agreements

This should now change. The government has said that lex Laval does not adequately uphold the position  of collective agreements. There is a risk of unfair competition as a result of wage dumping and other social dumping issues. Therefore the law on the posting of workers will be tightened within the limits of what EU law allows. And unlike the former government, the new one thinks it is possible to demand from foreign companies that they sign so-called confirmation agreements without being on a collision-course with the EU. Such an agreement gives a trade union written proof of what the employer has promised, which could be used in a court of law if necessary. 

The government has also asked for a white paper on subcontracting liability in the construction industry. The commission has been asked to consider whether this should be a chain liability (as in Norway) or whether each company should be liable only for its own sub-contractors. It will also look at whether so-called strict liability should be the norm, or whether contractors that have undertaken due diligence obligations should not be held accountable for their sub-contractors’ mistakes. The commission will also consider whether subcontracting liability should be extended to include more sectors besides the construction industry.

In breach of EU law?

Trade unions are positive to the new deal, although the commission’s instructions are not as radical as might have been expected after election promises of “tearing up” lex Laval. The Confederation of Swedish Enterprise, on the other hand, still believes that demanding “confirmation agreements” would be in breach of EU law.