European unions: “don’t let them dump on us”

by John Monks, ETUC General Secretary

A judgment in the European court of justice on December 18 has shaken European trade unions – and Sweden and Denmark – to the core. In a ruling in favour of a Latvian company importing cheap Latvian building workers on to a Stockholm construction site, the court has ruled in effect that the right to strike is not as important as the unimpeded free flow of services and labour.

As such, more “social dumping” – namely downward pressure on wages from cheaper sources – is now acceptable and is to be encouraged. Poul Nyrup Rasmussen, president of the Party of European Socialists, has characterised the decision thus: “Europe has shot itself in the foot … [This is] not a ruling for social Europe”.

At a stroke, the court has made a decision that will make it harder to deliver trade union support for the EU and the new reform treaty. To trade unionists around Europe it is plain that the EU, which hitherto has generally upheld workers’ rights – in contrast to the US, and sometimes, sadly, the UK – has now taken a neoliberal, anti-trade union turn. The right to strike is now restricted in situations where an employer imports cheap foreign labour; this is a clear relegation of the new treaty’s charter and its casting of the right to strike as a fundamental prerogative. The judgment makes it plain that that right is less important than an employers’ ability to take advantage of freedom of movement provisions. As a result those in Sweden and elsewhere who think that the new treaty may be a step too far will have their hands strengthened.

The British Labour government argued bizarrely, but consistently with their opposition to social Europe, that the right to strike is not a fundamental right. On that point, they lost and the unions won. Good news, but that victory is overshadowed by the precedence given by the court to free movement over collective bargaining and strikes.

The judgment is a body blow to the extensive collective bargaining systems of Sweden, Denmark and Norway. Even the Conservative employment minister in Sweden is now promising new laws making it compulsory for foreign companies in Sweden to follow Swedish collective agreements.

He is doing this because he knows that otherwise the call will be for “Swedish jobs for Swedish workers”, echoing Gordon Brown’s ill-defined phrase about “British jobs for British workers”.

This could mean Sweden begins to curb the entry of EU migrant workers, using the so-called “transitional measures” or other devices. Sweden, like the UK, has been open to migrant workers so far, but if it is a choice between their collective bargaining system and unrestricted entry from other EU states, this could change.

Many will appreciate the irony that the recent summit of EU leaders promoted “flexicurity” – a concept based on the successful Scandinavian models of reconciling economic dynamism with strong, flexible collective bargaining and active welfare. The court’s decision puts a big spanner in the flexicurity works and points in the direction of even more rigidity and inflexibility.

Europe and its trade unions will survive the court’s decision, but Europe has suffered a self-inflicted wound that its leaders must address quickly. They must move to take social Europe out of the freezer and strengthen workers’ rights in the face of globalisation and the growing power of reckless financial capitalism and its overpaid executives. And Gordon Brown, John Hutton and rest of the government must answer the question “whose side are you on?”

(posted on UK Guardian ‘Comment is free’ on 21 Dec.2007) 

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