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Vaxholm case reaches EU Court

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09:38 CET+01:00
A case which has pitted Swedish unions against a Latvian building company will be heard at the European Court in Luxembourg, starting on Tuesday.

The Vaxholm case started when Swedish trade unions blockaded a building site near Stockholm. Latvian builders were working there without having signed a Swedish collective agreement. The incident has illustrated the conflict between the EU's freedom of movement for labour and the Swedish collective bargaining model.

Erland Olausson, of Swedish trade union confederation LO, is in Luxembourg to follow proceedings.

"If you look at this case from a European perspective, it is a question of whether the market should trump the right to strike," he said to news agency TT.

"From a Swedish perspective the question is whether we will be able to retain our system of collective agreements in the form in which we know it."

Olausson denied that the unions were just trying to shut out foreign competition:

"Competition is great, but it should take place with conditions that are alike for all. When this happens, companies are forced to develop their services and become more skilled and more effective. But competition in which companies are just good at paying as little as possible to their employees is not good."

Olausson says he is convinced that the European Court will listen to the Swedish unions' arguments.

"It is most unlikely that Byggnads [the Swedish Builders' Union] will lose completely in court. If they did, it would have dramatic effects on the Swedish model. But if the court were to have other minor objections to our system, we will have to handle it as and when."

The blockade in Vaxholm was launched in 2004 against a subsidiary of Latvian firm Laval. Negotiations between the company and Byggnads had collapsed.

The company was forced to stop working at the site, at which it had been building a school, and the contract with the local council was torn up. The blockade led to the company being declared bankrupt.

The Swedish Labour Court ruled in a provisional judgment in March 2005 that the union blockade was permissible. But the court referred the case to the Luxembourg for a final decision.

The Latvian government has protested against the Swedish position. Latvia views the blockade as a breach of European rules guaranteeing the free movement of labour over EU borders.

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