The court ruled that the Swedish state had broken protocol 1 of the European Convention on Human Rights, which gives each individual the right to the peaceful enjoyment of his or her possessions.
The state was ordered to pay €5,000 to each of the five building workers who had brought the case, and a further €87,000 in court costs.
Byggnad’s chairman Hans Tilly said the verdict was “unexpected”.
“I had expected it to go our way,” he told news agency TT. But he said that his interpretation was that the union would be able to continue to charge fees to non-members.
The money at issue is charged to every building worker, whether they are members of the union or not. The fee, 1.5 percent of earnings, is supposed to be an “inspection fee” used by the union to make sure that firms are paying the right wages.
The court ruled that while the fee itself was legal, the money raised could not be used for any purpose other than ensuring that wages were being paid correctly. Byggnads had not provided sufficient evidence that the money from the fee had been ring-fenced for that purpose.
“We are now going to sit down and analyse the ruling, which will lead to greater openness in how we account for fees,” Tilly said.
“It’s OK for us to charge non-members the inspection fee, but the money can only be used for monitoring and inspection,” he said.
Tommie Evaldsson, one of the builders who brought the case, said he was pleased with the compensation.
“I’ll use the money to buy a salad bar in Gothenburg,” he joked, referring to the restaurant being sold by its owner following a controversial union blockade.
“But seriously, we haven’t pursued this case for financial gain, but to gain justice,” Evaldsson said.
“People who are members of the union have approved the inspection fee so they can’t complain. But it is quite a lot of money – about 400-500 kronor a month, given that we earn quite a lot in the building trade,” he added.
Labour minister Sven Otto Littorin said he was pleased by the outcome.
“It is positive that the European Court has concluded that non-unionised members of the workforce should not be forced to pay fees where there are failings in accountability and where there is a lack of clarity about what the money is used for,” he said in a written statement.
The fee is big business for Byggnads. The union itself says the fee earns it 200-250 million kronor a year. Employers’ organization Sveriges Byggindustrier says the fee is worth nearer 350 million kronor to the union. As non-unionised workers account for 10 percent of all builders, this means that their fees are worth 20-35 million kronor a year to the union.