Sweden disappointed by EU ruling

Sweden disappointed by EU ruling
Sweden's government on Tuesday said it was disappointed by a European court ruling against a Swedish trade union that tried to force a Latvian company to pay its staff in Sweden higher wages.

The European Court of Justice (ECJ) ruled Tuesday in a widely-watched wage-dumping test case that the 2004 picketing by Swedish construction union Byggnads of a Latvian company it accused of paying sub standard wages had restricted the construction firm’s right to provide services in Sweden.

“I am disappointed with the EU court’s ruling,” Swedish Employment Minister Sven Otto Littorin told reporters.

L and P Baltic Bygg, a subsidiary of Latvian Laval un Partneri, was forced into bankruptcy after the union began in May 2004 picketing three of its building sites in Vaxholm in Stockholm’s archipelago to pressure it to sign a collective wage agreement.

The rift has been followed closely in Sweden, where it was seen as a direct consequence of EU enlargement amid fears of an influx of cheap labour from eastern European countries, such as Latvia, which joined the bloc in May 2004.

“Sweden’s government’s stand on this is that Swedish collective agreements should be the basis (for wages) in Sweden,” Littorin said.

The ECJ said Tuesday it recognized the right of workers to take collective action, but ruled that “in this case, (the action) is not justified with regard to the public interest of protecting workers.”

Sweden’s main trade organization LO said the ruling would mean the Scandinavian country would be forced into “a type of apartheid,” since foreign workers could be pressured to work under far worse conditions than Swedes within the same industry.

Both LO and Byggnads called on the Swedish government to change the country’s laws, which today leave wage negotiations up to industry players, to ensure that foreign workers receive the same salaries as Swedes.

Littorin said he was not in favour of making such a change, but indicated the European court ruling could force Sweden to make other changes like imposing “some restrictions on the rights to carry out collective actions.”