Dispute over pay of Latvian construction workers

In November 2004, the Swedish Building Workers’ Union launched a boycott of L&P Baltic, a Latvian construction company currently carrying out work in Sweden, which has refused to to observe the relevant collective agreement and pay Swedish wages to its workers, who are Latvians. The case seems likely to end in the courts.

On 2 November 2004, the Swedish Building Workers’ Union (Svenska Byggnadsarbetareförbundet) started conducting a boycott of the Latvian building company L&P Baltic, which is in charge of building some school premises in Waxholm, near Stockholm. The Latvian company has refused to observe a national collective agreement and pay Swedish wages to its workers, who are Latvians recruited in their home country. The conflict is due to be widened from 3 December 2004, as the Swedish Electricians’ Union (Svensk Elektrikerförbundet) has given notice of a boycott of all electric installation work at the construction side. This kind of sympathy action is a legal conflict action according to the Swedish industrial action rules (SE0302102F).

The Swedish rules, laid down in legislation and collective agreements, allows a trade union to force, through conflict actions, collective agreements on non-organised employers, including those based in other countries. The general principle is that in the Swedish labour market Swedish collective agreements are applicable. L&P Baltic is not a member of the Swedish Building Industries (Sveriges Byggindustrier), and is thus not automatically covered by the collective agreement in question. The company believes that Latvian collective agreements should apply to Latvian workers working abroad, and it would be discriminatory if this were not the case. Lawyers working for the Swedish Confederation of Trade Unions (Landsorganisationen, LO) argue that this is not a case of discrimination but of equal treatment: Latvian workers in Sweden should have the same rights as Swedish workers.

The Building Workers’ Union has demanded that L&P Baltic should pay the Latvian building workers SEK 145 per hour, the average rate for building workers in the Stockholm region. The lowest average pay level for all building workers in Sweden is, however, only SEK 109 per hour. According to labour lawyers, this may complicate future legal proceedings - which are widely expected in this case - as it is not at all sure that it will be accepted that a Swedish trade union may demand the imposition of a collective agreement with a pay rate above the lowest pay level set in the relevant national sectoral collective agreement.

Discussions are currently being held between the Latvian and Swedish labour ministries as well as between the Latvian company and the Swedish trade union. It is more than probable that the rules governing Swedish collective agreements and conflict actions, which are questioned by the Latvian parties, will be tested first in the Swedish Labour Court (Arbetsdomstolen) and then possibly in the European Court of Justice.

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