Sweden: European Court sets precedent on foreign workers

The case began in 2004 when a Lithuanian company, Laval, entered the building trade, winning a string of contracts in Sweden. The company, then best known for producing cake, based its strategy on the importation of cheap Latvian labour. Laval argued that as Sweden does not have a legal minimum wage this was entirely legal.

Boycotts and pickets organised by Swedish unions and workers led to the loss of many important contracts and in the spring of 2005 the Swedish subsidiary of Laval filed for bankruptcy. The unions decided that legally preventing a repeat was necessary to prevent other companies bringing in workers who could be paid well below the cost of living.

Mengozzi ruled that "means of collective action in the form of a blockade and solidarity action, to compel a service provider of another member state to subscribe to a rate of pay" were acceptable although adding the disclaimer: "collective action must, however, be motivated by public-interest objectives, such as the protection of workers and the fight against social dumping, and must not be carried out in a manner that is disproportionate."

The advice is not legally binding and the court is yet to rule on it, however roughly 80% of such cases are ruled in favour of the Attorney General's advice.