Norway: Dock workers lose boycott case

A long dispute in Norway’s docks has ended after the country’s Supreme Court ruled that a collective agreement covering workers in 13 of the largest ports restricted freedom of establishment, which could not be justified under European Economic Area (EEA) law. 

Background

The current framework collective agreement for dock workers dates back to 1976 and was concluded by the Norwegian Confederation of Trade Unions (LO) and its affiliate the Norwegian Transport Workers’ Union (NTF) and the Confederation of Norwegian Enterprises (NHO) and its affiliate the Norwegian Logistics and Freight Association (NHO Logistics and Transport).

It sets out a fixed pay scheme for dock workers in 13 of the largest ports in Norway and also states that any vessel of 50 tons​ deadweight (that is, not including the weight of the ship) sailing out of, or into a Norwegian port (to or from a foreign port) must be loaded or unloaded by dock workers. The Administration Office for Dock Workers (Administrasjonskontor for havnearbeid), an independent body, was established to administer the work and assign workers to their duties.

Holship conflict

In spring 2013, however, the Norwegian subsidiary of Holship (a Danish transport company) used its own employees for loading and unloading its ships in the port of Drammen, instead of employees assigned by the Administrative Office at the port. The Holship employees were members of another LO affiliate, the Norwegian Union of General Workers. Holship is a member of the employer association Bedriftsforbundet, an organisation for small and medium sized enterprises (SMEs), which is not a member of NHO.

The use of Holship workers led to a spontaneous two-day blockade led by local workers. NTF asked Holship twice to negotiate a collective agreement in the context of the framework agreement. However, Holship refused to negotiate and NTF gave notice of a boycott. This was used instead of a strike, as NTF had no members at Holship.

Court action

The parties proceeded to take the matter to court in Drammen.

In March 2014, Drammen District Court ruled in favour of the trade unions. Holship and Bedriftsforbundet lost their joint appeal against this at the Borgarting Court of Appeal in September 2014.

Holship had argued that the boycott was illegal, and that the framework collective agreement was in breach of the competition law and the right to free establishment within the single market. NTF argued that collective agreements fall outside the scope of these regulations.

The employers then turned to the Supreme Court, which decided to ask the European Free Trade Association (EFTA) Court for advice, because the Danish ownership of Holship made the issue a cross-border case.

The court asked:

  • whether the exemption of a collective agreement from European Economic Area (EEA) competition law applies to the use of boycott against a port user in order to procure acceptance of a collective agreement, when such an acceptance entails that the port user must give preference to buying unloading and loading services from an Administration Office instead of using its own employees for the same work;
  • if not, whether the system under consideration should be assessed under Article 53 or 54 of the EEA agreement; Article 53 is concerned with the prevention, restriction and distortion of competition while Article 54 covers abuse by one or more undertakings of a dominant position).

It also asked about the effect on corresponding systems in other ports.

The EFTA Court backed the employers (E-14/15) (PDF) in April 2016 saying that the collective agreement’s exemption from EEA competition rules did not ‘cover the assessment of a priority of engagement rule such as the one at issue’.

Supreme Court ruling

The Supreme Court then heard the case in December 2016. It concluded that the clauses of the collective agreement restricted the freedom of establishment (PDF), which could not be justified under EEA law. It also found that the Administration Office’s role prohibited other economic players from entering this particular market – in this case Holship at the port of Drammen.

It ruled that imposing a boycott to oblige companies to use the workers distributed by the Administration Office was not legal, as it went against free movement in the EEA area.

The ruling put an end to the boycott, as well as to several ‘solidarity strikes’ in other Norwegian ports.

Commentary

While the employers welcomed the ruling by the Supreme Court, LO and its affiliate NTF will need to take it into account when discussing Norway’s commitments under the EEA agreement. Although LO mainly supports the EEA agreement, some of its affiliates question certain of its implications. The EEA agreement is due to appear on the agenda on the next LO congress in May 2017.

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