RIGA - The labor union dispute in Sweden involving Laval un Partneri became an intergovernmental dispute this week, as Prime Minister Aigars Kalvitis said on Dec. 6 that he would ask both the Swedish government and trade unions to suspend the boycott against the Latvian construction company until the European Commission provides a judgment on Sweden's compliance with EU requirements on the free movement of labor.
"We will ask the Swedish government and the trade unions to suspend the boycott until explanations [from the European Commission] are received," said Kalvitis.
He said he hoped the Swedish government would show a willingness to solve the dispute.
Then, on Dec. 7 Kalvitis said Latvia would ask the European Commission for an opinion on how Sweden complies with EU labor law.
Swedish workers started to boycott Laval un Partneri after the latter refused to sign a labor agreement that would force it to pay foreign workers the same wages as Swedes.
The firm is presently contracted for two renovation projects in the Scandinavian country.
Pabriks said earlier that the Swedish trade unions' demand for Latvians to sign a collective wage agreement conflicted with EU principles and values in regards to the free movement of services.
"Latvia, as a full EU member, stands for the values promoting a free market under conditions of open competition, which thus ensure economic and social development of every member as well as EU global competitiveness," said the minister.
Meanwhile, Laval un Partneri filed a claim with the Swedish labor court on Dec. 6, the firm's sole owner and CEO Guntars Tiltins told the Baltic News Service. The company will demand a lift of the blockade on its construction site and that Swedish electricians and land excavation workers cease striking.
Laval un Partneri project coordinator in Sweden, Regina Purva, said the company would go to court if they did not receive a letter from Swedish labor unions regarding the continuation of talks by Dec. 6.
The case could end up in the EU if the Swedish labor court rules against Laval un Partneri, or if they find the case too complicated and refer it directly to Brussels, Purva said.
Laval un Partneri's lawyers said that, since the union's action discriminated foreign companies and was contradictory to EU law, the chances of making it to Brussels were good, Purva added.
Laval un Partneri has received strong support from both the Swedish population and the media, where many have taken the Latvian company's side in the row.
Work at the construction site is reportedly continuing.
Laval un Partneri won a tender for renovating a school in Vaxholm, a Stockholm suburb, but a local trade union has threatened to blockade construction on the site since the agreement was signed in Latvia, not Sweden. If the agreement was recontracted according to Swedish law, it would mean a significant boost in wages for workers, which would in turn increase project costs.
Laval un Partneri was founded in 1998. Last year the company posted a turnover of 2.04 million lats (2.95 million euros) and a profit of 59,600 lats.