Wednesday, January 03, 2007

What kind of EU are we going to have?

A delicious conflict is emerging over the fate of the Finnish passenger ferry, Rosella, setting two supposedly core principles of EU law at odds with each other.

This arises, according to the Financial Times, because the ferry, operated by the Viking Line on the three-hour crossing between Finland's capital, Helsinki, and Tallinn, the Estonian capital, is crewed predominantly by Finnish nationals and the owners want to re-flag the ship and replace the crew with cheaper Estonian labour.

Predictably, the Finnish Seamen's Union – with the backing of the International Transport Workers' Federation (ITF) - is threatening industrial action and Viking is seeking an injunction to prevent this.

It is that which is pitting the core EU principles against each other. On the one hand, there are the "freedom of establishment" rules invoked by the shipping company, allowing businesses to set up wherever they wish in the EU. These are embodied in Article 43 of the Treaty.

On the other stands the EU's social policy which the unions are claiming conveys a fundamental right for workers to take collective action, including strike action.

The issue has already been to the UK Courts, where Viking's application for an injunction was first heard and it is now in front of the European Court of Justice, where there are to be oral hearings today in front of an unusually large panel of 13 judges.

The issues at stake go far wider than the shipping industry, and could affect businesses wherever they seek to replace existing workers with cheaper staff from another EU member state.

Because of this, the ECJ is simultaneously considering another dispute, this one referred by the Swedish courts concerning a Latvian construction company called Laval un Partneri.

Through its Swedish subsidiary, it won a contract to refurbish a school at Vaxholm, Sweden, but the company sought to use cheaper Latvian workers, a move blocked by the union.

This same problem almost came to a head last year, over Irish Ferries, but the EU commission ducked the issue and a dispute between the Irish union Siptu and the ferry operator was resolved without commission intervention.

However, the Financial Times reports that the UK is seeking to rain on the unions' parade, arguing that there is no principle of EU law that gives social policy rights any primacy over other provisions in the EC Treaty, and that taking collective action does not, in itself, even amount to a fundamental right protected by Community law.

If that is the case, then it is not beyond the ECJ to invent such a fundamental right – or find that it existed all along – which the ITF wants it to do, thus making "a judgement to be made on the relationship between human rights and economic rights".

It will be some many months before the ECJ rules on this but, whichever way the answer falls, it is bound to be entertaining. At stake claims the ITF is "what kind of EU we are going to have in the future". "Will it be one that gives priority to the rights of companies," asks the Union, "or one that supports the rights of workers to defend their interests?"

Not for the first time, the EU is going to find that it cannot have it both ways.

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