RIGA - A dispute over wages and a labor agreement between a Latvian construction company and a Swedish union continued this week and appeared headed to the European Commission for a resolution, if not the European Court of Justice.
On Dec. 13 the Swedish union physically blocked the building site in Waxholm, a suburb of Stockholm, where Latvian workers were employed to help refurbish a school.
Laval and Partners, the Latvian construction firm involved in the row, appealed to the police to end the blockade, but the latter did nothing to force the protesters to back off.
The union had also reportedly placed signs around the city informing the public about the boycott. Protesters held signs saying "Swedish laws in Sweden" in both Latvian and Swedish. There were reports that some shouted "go home" at the Latvian workers.
The Swedish laborers' strike had begun on Nov. 2 after the Latvian firm refused to sign a collective agreement for the imported labor - one which would effectively pay Latvians and Swedes on the site identically. A Swedish labor court is expected to hear a case on the dispute Dec. 20. Support for the competing sides has grown quickly in each of the home countries.
"They [the union protesters] are fully within their rights according to Swedish collective agreements to take strike measures," Swedish Prime Minister Goran Persson was quoted saying in the newspaper Dagens Nyheter.
Sweden was one of the only countries not to impose labor restrictions on the new member states, and the spat with the Latvian workers has supporters of restrictions telling the government "I told you so."
Laval and Partners recently won a contract to carry out a school reconstruction project, which is due to be completed next summer. The firm was able to offer a competitive price by factoring in Latvian workers, who are paid much less than their Swedish counterparts. Once Laval and Partners won the contract, it brought Latvian workers to Sweden to work on the site.
The firm claims to be in total agreement with the pertinent Latvian laws that affect the Latvian workers, where the contracts were signed. Yet the Swedes have countered that all immigrant workers must abide by Sweden's laws.
Latvian labor is significantly cheaper than Swedish. Laval and Partners' hired hands were getting 14,000 Swedish kronor (1,562 euros) a month, while their counterparts were getting 24,000.
But according to Regina Purva, Laval and Partners' project manager in Sweden, salary is not the only thing that Latvian workers receive. They also get room and board and transportation to the work site, as well as trips home. Besides, not all Swedes receive the 24,000 kronor a month, she argued.
Foreign Minister Artis Pabriks, who has been quick to defend the Latvians' rights to work abroad, turned to the European Commission for an explanation of the rules governing the free movement of labor and whether Sweden is abiding by them.
"These are not unskilled workers. This is a high quality company that offers it services on a competitive basis," Pabriks said. Latvia wants to hear what the European Commission has to say about this and the free movement of labor, he added.
Pabriks called the Swedish union's position "discriminatory," and indeed many in Latvia have regarded the standoff as a personal affront.
Swedish officials, however, bitterly deny that.
"That is not the case. It's simply not discriminatory," Anna Nitzelius of Sweden's Employment Ministry, said. Conflicts in the labor sector occur all the time, she added, and many times strikes occur. A Swedish commission has reviewed the country's legal system and found that it was in line with EU law, Nitzelius explained.
Sweden maintains that everyone working in the country must abide by Swedish law. Yet there is no minimum wage in Sweden, and construction pay is ruled by collective bargaining, an unclear area of European law. Laval and Partners claim that their agreement was concluded is in accordance with Latvian unions at home.
Now, however, the current situation involving the Latvian workers has left many uncertain if this is indeed a violation of the free movement of labor.
Other Latvian companies feel that the fallout between Latvia and Sweden could negatively impact their operations in the Scandinavian country.
In the Latvian daily Neatkariga Rita Avize, Parex Bank representatives said that the strike could impact their Stockholm branch, which is set to open soon.
Should the European Commission rule in favor of Latvia, then the case could go to the European Court of Justice considering the strong governmental support the Swedish union has.
Experts said it is very rare for two EU member states to sue each other in a European court.
Laval and Partners began working in Sweden in 2000 and has worked there using Latvian labor in the past. The company renovated the Swiss Embassy building, completing the project in June 2003.
