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Breach of Community law resulted in liability for damages

January 2010 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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Trade unions are liable to pay damages when breaching Community law by taking industrial action. This was held by the Swedish Labour Court in the so-called Laval case.

Community law includes the principle of the free movement of services. This principle together with the Posting of Workers Directive put a limit to the right to take collective action against a foreign service provider in order to force the provider to enter into a collective bargaining agreement. This was held by the European Court of Justice (ECJ) about two years ago in the much discussed Laval case.

In Laval, a Latvian company had workers posted in Sweden for a construction project. The company was met by demands to enter into a Swedish collective bargaining agreement. When Laval refused to do so, the trade unions took industrial action against Laval. Laval believed that this action was contrary to Community law and brought the case before the Swedish Labour Court.

Following the ruling by the ECJ, the Swedish Labour Court has now ruled in the main proceedings. In its ruling, the Swedish Labour Court ordered the trade unions to pay SEK 550,000 in damages for breaching Community law and thereby causing Laval to suffer a financial loss.