Free movement of goods and services is guaranteed under the EC Treaty and is underpinned by the right to freedom of establishment, provided under Article 43 of the EC Treaty (now Article 49 on the Treaty on the Functioning of the European Union, TFEU), which defines it as including the ‘right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms … under the conditions laid down for its own nationals by the law of the country’. Member States must modify national laws that restrict freedom of establishment or the freedom to provide services, and which otherwise would be incompatible with these principles. Article 43 EC (now Article 49 TFEU) together with Article 49 EC (now Article 56 TFEU), on the freedom to provide cross-border services, are both considered as fundamental freedoms which are central to the effective functioning of the EU internal market.
At EU level, the right to strike is enshrined in Article 28 of the Charter of Fundamental Rights of the European Union (entitled ‘Right of collective bargaining and action’):
Workers and employers, or their respective organisations, have, in accordance with Community law and national laws and practices, the right to negotiate and conclude collective agreements at the appropriate levels and, in cases of conflicts of interests, to take collective action to defend their interests, including strike action.
The effect of Article 28 is to give to all workers, regardless of the nature of the employer, whether public or private, the right to take collective action, exercised within the terms of any national laws.
Thus under EU laws the right to freedom to provide services and the right to strike may both be regarded as fundamental rights, which Member States must guarantee a right to exercise. However, given that the exercise of one of these rights may impede or limit the exercise of the other, the challenge is to devise a robust interpretation of the concept of fundamental freedoms that allows space for both to be applied. It is for this reason that the issue of the scope of the right to unrestricted free movement of services has been challenged, in the joined cases of Viking (Case C-438/05) and Laval (Case C-341/05). In these cases, the employer submitted that the right to take industrial action is subservient to the rights under Articles 43 and 49 EC (now Articles 49 and 56 TFEU) and that any industrial action that impedes these fundamental rights be prohibited. In response, the trade unions submitted that the right to take collective industrial action may fall outside the scope of Article 43 EC (now Article 49 TFEU), even where the impact of such industrial action is to hinder, impede or prevent the exercise of an Article 43 EC (now Article 49 TFEU) right. Should that position not be upheld by the court, the unions also claimed that even if Article 43 EC (now Article 49 TFEU) does confer rights, exercisable by a private undertaking, to provide services, nevertheless industrial action which restricts such freedom can be objectively justified and is thus not completely prohibited by Articles 43 and 49 EC (now Articles 49 and 56 TFEU). The two cases were considered by the Advocates General in May 2007 who were of the opinion that industrial action is subject to Treaty rights to exercise freedom of services. However, in Laval, the Advocate General also held that unions can use collective action to compel service providers from another Member State to provide equivalent terms and conditions, provided the collective action is motivated by public interest objectives, such as the protection of workers and the fight against social dumping. In Viking, the Advocate General held that industrial action which restricts such a freedom might be objectively justified.
The two opinions therefore imply that the right to freedom of movement cannot be seen as an all-embracing restriction on the right to take collective action but at the same time collective action cannot be placed outside of the provisions on freedom of movement, so as to exclude it from having to take account of rights derived under the Treaty. However, industrial action, which is legitimate and proportionate, can co-exist with the right to freedom of movement, even if in practice it places some restrictions on that freedom.