Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet

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Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet (2007) is an EU Court of Justice case about posted workers and the right to strike. A Latvian company, Laval, won a Swedish contract to renovate schools and sent Latvian workers to Sweden. The workers were paid much less than Swedish workers. The Swedish building workers’ union asked Laval to sign its collective agreement, which would have given terms more favorable than what the EU rules require for posted workers and would set pay in a way Laval could not know in advance. Laval refused, and the unions blocked Laval’s sites, so Laval could not work in Sweden. Laval argued this violated the EU’s freedom to provide services.

The Court’s ruling was that a host country can sometimes justify taking collective action to protect its workers from social dumping if it is proportionate and the measures are justified under EU rules. However, in this case the justification failed. Sweden’s system for collective bargaining was not precise or accessible enough for Laval to know its obligations in advance, so the blockade could not be justified as a valid restriction on free movement of services.

Key points:
- The right to strike exists, but it must be proportionate and justifiable when it affects the freedom to provide services.
- The host country can’t demand terms beyond the minimum protections specified in the EU rules for posted workers, unless those terms are already clear and predictable.
- Collective action cannot be used to impose pay terms when the host country’s rules are too vague for a foreign company to understand in advance.

Impact and aftercare:
- The decision was controversial among labor and human rights groups.
- It influenced later debates and actions around posted workers and strikes, including notable protests in 2009.
- In Sweden, the Labour Court later ordered the unions to pay damages to Laval’s bankruptcy estate, and the ILO criticized Sweden for changes made after the ruling, saying they undermined freedom of association.