Fight Social Dumping


May 9, 2006 9:16 |by Doug Nicholls

highlighting the significance for unions across Europe of the fight by Swedish builders against a wage-cutting Latvian firm.

Britain, Ireland and Sweden were the only three European Union members to open their immigration doors completely to workers from new EU members when it expanded to the east last year. The Gate Gourmet and Irish Ferries disputes took place almost immediately.

At Gate Gourmet, eastern European labour was brought in to replace British workers. At Irish Ferries, Irish crews' jobs and wages were replaced by eastern Europeans on the minimum wage. There are at least 200,000 Polish workers looking for work in England and 100,000 in Ireland. Capital is flowing east and labour west, causing new problems.

In Sweden, building workers whose collective agreements give them 145 krone an hour were told that they had lost a contract to a Latvian firm which would pay its workers 35 krone an hour.

The Swedish labour movement is not prepared to let this happen and the significance of its case has been realised by the United Left/Nordic Green Left group of MEPs (GUE/NGL), which organised a solidarity conference last month.

Swedish industrial relations rely heavily on collective bargaining. Ninety per cent of workers are covered by such agreements and eighty per cent of workers are in unions. When the Latvian company Laval won a Swedish contract to rebuild a school in Vaxholm, it signed an agreement with the council that included the negotiated building workers' pay rates. However, unlike most employers in Sweden it refused to sign anything with the trade union. It then paid Latvian workers brought in to do the job much less and told them that they would be sacked if they spoke to the union.

Trade unions boycotted the site and forced it to close. They had the full support of the Latvian unions in their struggle and deployed secondary action with electricians to really hurt Laval. Meanwhile, the Employers Federation of Sweden thought that the principles involved - creating greater wage competition - were so important that it challenged the trade union in the courts. Even EU commissioner Charles McCreevy said that the union should be taken to court.

But the Swedish labour court said that the builders' union had acted legally in trying to protect collective bargaining. However, Laval has persisted. It says that the union action violates Article 12 of the European treaty on equal treatment and Article 49 on the free movement of services. It also says that the strike against it restricts the fundamental clauses of the EU about the free mobility of goods, services, labour and capital. The case has now been referred to the European Court of Justice.

The Swedish trade union centre, the LO, was once strongly in favour of the EU project. It is now saying that, if the case is lost, it will campaign for a withdrawal from the EU altogether. This is necessary simply because, if the EU backs Laval in bypassing the whole system of recognition and collective bargaining in Sweden, the country's entire nationally based structure of industrial relations will crumble and foreign and domestic companies will ride roughshod, as the EU intends.

Swedish building workers' union representative Gunnar Ericson explained that employers have been trying to discriminate against imported labour by creating a race to the bottom in wages. Dan Holke of the Swedish Trade Union Confederation clearly demonstrated that, if the EU sided with the employers in this case, it would, effectively, be saying that all national collective bargaining arrangements and rights to industrial action, as enshrined in domestic law throughout Europe, would be jeopardised.

GUE/NGL parliamentary group leader, French MEP Francis Wurtz, linked the attack in Sweden and elsewhere to the new neoliberal tidal wave that has been sweeping through Europe as the European Commission and the right-wing-dominated European Parliament sought to further liberalise markets in labour and capital. The group's vice-president Eva Britt Svensson showed how the latest reports on public services sought to keep the momentum of the slightly amended Bolkestein directive going and to open up more public services to competition.

Taking the example of pensions, I sought to demonstrate that all of the problems faced by workers throughout the continent can be rooted in the undemocratic decisions of the EU as dictated by the European Round Table of Industrialists, the lobby group that most effectively dominates the EU on behalf of the major employers.

For the EU to say that workers must work longer and harder for less in retirement and pay more into pensions in the process is one of the clearest expressions that, as in the Vaxholm building workers case, it has no plans for the long-term welfare and collectively agreed wages, deferred or otherwise, of workers.

It is time to seriously consider where the EU really is going and if its bitter pill can ever be sugared.

Doug Nicholls is secretary of Trade Unionists Against the EU Constitution (UK). The group has produced a new leaflet on the origins of the pensions crisis in the EU. For further details contact TUAEUC 301 The Argent Centre, 60 Frederick Street, Hockley, Birmingham, B1 3HS. This article first appeared in The Morning Star

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