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Labor standoff goes to Swedish court, Brussels

  • 2004-12-22
  • By Aaron Eglitis
RIGA - A Latvian construction firm turned to a Swedish court on Dec. 20 in an effort to end the strike by Swedish construction workers that has paralyzed contractual work and caused a minor spat between the two governments.

Laval and Partners, which had won a contract to refurbish a school building on the island of Waxholm outside Stockholm, had to cease operations after Swedish workers physically blocked the site to prevent the Latvians involved in the project from carrying out their jobs.

By the time The Baltic Times went to press on Dec. 22, a court decision had still not been reached but was expected within days.

Prime Minister Aigars Kalvitis and Foreign Minister Artis Pabriks met with Swedish PM Goran Persson while in Brussels last week in the hope of attaining a breakthrough. They also sent a letter to European Commission President Jose Manuel-Barroso seeking the commission's opinion regarding Swedish compliance with the European Union's principle of the free movement of labor.

Person declined to interfere in the dispute, saying it was a commercial matter and was best to leave it to the courts. Latvian officials, however, believe Laval and Partners will lose the labor court decision and are hoping that the European Commission will intervene. If not, they might seek redress at the European Court of Justice.

"We would like to convince the Swedish labor court to turn to the European Courts or to the European Commission and finally lift the blockade," Anders Elmer, a lawyer representing Laval and Partners, said.

Elmer also disputed the idea that the European Commission would not get involved, an idea floated by the Swedish government. He added that in addition to the Latvia's letter to the commission he had also written one on behalf of his clients.

Representatives of the Swedish trade union, Byggnads, were unable to be reached for comment.

The labor standoff had wider implications for Baltic-Scandinavian relations, as it was the first in three such cases in the past month. A Lithuanian construction company, Atkirta, faced similar problems recently in Denmark, where local trade unions demanded that the Lithuanian workers receive the same wages as Danes. The resulting strike by Danish workers forced Atkirta to leave the site since the delay in construction was making the project unprofitable.

Two Estonian workers were recently locked out of working in a Swedish resort since they were not part of a local union and were ultimately recalled by their recruitment agency, JobbXtra.

The Baltic Assembly, an association of parliamentarians from the three Baltic states, added their voice and requested that the European Commission examine the issue. Issues regarding the free movement of labor are a priority concern for the Baltics, which sit near the bottom of the EU in terms of GDP per capita.

At the heart of the dispute between Latvian and Swedish workers is the difference in wages. Laval and Partners successfully bid for a contract to work on the reconstruction of the school in part by offering cheap Latvian laborers, whose wages are a fraction of their Swedish counterparts. Swedish wages are normally decided through collective bargaining agreements.

The difference in pay is substantial. Latvians earn around 60 percent of what the Swedish workers do. The Swedish government fears social dumping, and the possibility of allowing in many workers from the poorer new member states that would undercut their labor unions.

What is unclear, say experts, is how EU laws governing the free movement of labor coincide with the Swedish system of collective bargaining, since the Nordic state has no minimum wage.

Laval and Partners has defended its policy by claiming that the contracts with Latvian employees was made in accordance to Latvian law, since they were concluded at home.