OPINION OF ADVOCATE GENERAL

MENGOZZI

delivered on 23 May 2007 1( )

Case C‑341/05

Laval un Partneri Ltd

v

Svenska Byggnadsarbetareförbundet and Others

(Request for a preliminary ruling from the Arbetsdomstolen (Sweden))

(Freedom to provide services – Articles 12 EC and 49 EC – Directive 96/71/EC – Direct horizontal effect – Posting of workers – Undertaking in the building sector – Terms and conditions of employment – Minimum rate of pay – Collective agreement not declared to be of universal application – Collective action – Fundamental rights – Protection of workers – Social dumping – Proportionality)





Table of contents





I – Introduction

II – Legal background

A – Community law

B – National law

1. National law on the posting of workers

2. Collective agreements in Sweden

3. National law concerning collective action

III – The dispute in the main proceedings and the questions referred

IV – Procedure before the Court of Justice

V – Legal analysis

A – Preliminary observations

1. The applicability of Community law

2. The admissibility of the request for a preliminary ruling

B – The questions referred for a preliminary ruling

1. General observations

2. The interpretation of Directive 96/71 and its implementation in Sweden

3. Intermediate conclusion

4. Article 49 EC

a) General observations

b) The existence of a restriction of the freedom to provide services

c) Possible justifications for the restriction

i) The proportionality of collective action in so far as it is intended to impose the rate of pay determined in accordance with the Byggnadsarbetareförbundet collective agreement

ii) The proportionality of the collective action in so far as it sought to impose all the terms and conditions of the Byggnadsarbetareförbundet collective agreement

VI – Conclusion

I – Introduction

1. By its two questions, the Arbetsdomstolen (Labour Court) (Sweden) asks the Court, in essence, whether, where a Member State has no system for declaring collective agreements to be of universal application, Article 12 EC, Article 49 EC and Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services ( ) must be interpreted as preventing trade unions of a Member State from taking, in accordance with the domestic law of that State, collective action designed to compel a service provider from another Member State to sign a collective agreement for the benefit of workers posted temporarily by that provider to the territory of the first Member State, including where that provider is already bound by a collective agreement concluded in the Member State in which it is established.

2. The present case raises numerous legal questions that are far from easy to resolve and the most complex of which call for divergent interests to be reconciled.

3. Thus, in order to give a ruling in the present case it will be necessary to weigh the exercise by trade unions of their right to resort to collective action to defend workers’ interests – a right which, as I suggest in this Opinion, should be regarded as one of the general principles of Community law – against the exercise, by an undertaking established in the Community, of its freedom to provide services, a fundamental freedom guaranteed by the EC Treaty.

4. It will also be necessary to strike a balance between the protection of workers temporarily posted to the territory of a Member State in the context of cross-border services, the fight against social dumping and the need to ensure equal treatment as between domestic undertakings of a Member State and providers of services from other Member States.

5. In addition, in my view, this case calls for a detailed examination of the relationship between Directive 96/71 and Article 49 EC, having regard to the particular model of collective employment relations that prevails in Sweden, a model which, according to the analysis undertaken in this Opinion, should not be undermined by the application of Community law but must nevertheless ensure that the collective action which it authorises complies, in particular, with the principle of proportionality.

6. Finally, the present case may give the Court an opportunity to clarify its case-law concerning the horizontal direct effect of Article 49 EC, an effect which, I shall suggest, should be upheld.

II – Legal background

A – Community law

7. Article 12 EC states that, within the scope of application of the Treaty and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality is to be prohibited.

8. The first paragraph of Article 49 EC provides that restrictions on freedom to provide services within the Community are to be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

9. The first paragraph of Article 50 EC defines as ‘services’ services that are normally provided for remuneration, in so far as they are not governed by the provisions relating, in particular, to freedom of movement for capital and persons. Under the last paragraph of Article 50, a person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals.

10. According to Article 55 EC, the provisions of Articles 45 EC to 48 EC are to apply to the chapter concerning the freedom to provide services. Also applicable to that chapter are both Article 46 EC, which grants the Member States the right to apply provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health, and Article 47(2) EC, which enables the Council, acting in accordance with the procedure referred to in Article 251 EC, to issue among other things directives for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the provision of services.

11. Thus, on the basis of Article 57(2) of the EC Treaty (now, after amendment, Article 47(2) EC) and Article 66 of the EC Treaty (now Article 55 EC), the Council and the Parliament adopted Directive 96/71 on 16 December 1996.

12. Observing, in the third recital in its preamble, that the internal market offers a dynamic environment for the transnational provision of services, in which undertakings may post employees abroad temporarily to perform work in the territory of a Member State other than the State in which they are habitually employed, Directive 96/71 seeks, as emphasised in its fifth recital, to reconcile promotion of the freedom to provide transnational services with the need for ‘fair competition’ and ‘measures guaranteeing respect for the rights of workers’.

13. As is noted in the 8th and 10th recitals in the preamble to Directive 96/71, the Rome Convention of 19 June 1980 on the Law applicable to Contractual Obligations ( ) provides that, in the absence of choice made by the parties, the contract of employment is to be governed by the law of the country in which the employee habitually carries out his work in performance of the contract, even if he is temporarily employed in another country, or by the law of the country in which the place of business through which he was engaged is situated, without prejudice, however, to the possibility, subject to certain conditions, of effect being given, concurrently with the law declared applicable to the contract, to the mandatory rules of the law of another country, in particular the law of the Member State to whose territory the worker is temporarily posted.

14. In that connection, as indicated in the 6th and 13th recitals in its preamble, the purpose of Directive 96/71 is to coordinate the law of the Member States that is applicable to the transnational provision of services by laying down the terms and conditions governing the employment relationship envisaged, including in particular a ‘nucleus’ of mandatory rules for minimum protection to be observed in the host country by employers that post workers to perform temporary work in the territory of a Member State where the services are provided.

15. Article 1 of Directive 96/71 provides:

‘1. This Directive shall apply to undertakings established in a Member State which, in the framework of the transnational provision of services, post workers, in accordance with paragraph 3, to the territory of [another] Member State.

...

3. This Directive shall apply to the extent that the undertakings referred to in paragraph 1 take one of the following transnational measures:

(a) post workers to the territory of a Member State on their account and under their direction, under a contract concluded between the undertaking making the posting and the party for whom the services are intended, operating in that Member State, provided there is an employment relationship between the undertaking making the posting and the worker during the period of posting; or

(b) post workers to an establishment or to an undertaking owned by the group in the territory of a Member State, provided there is an employment relationship between the undertaking making the posting and the worker during the period of posting; or

(c) being a temporary employment undertaking or placement agency, hire out a worker to a user undertaking established or operating in the territory of a Member State, provided there is an employment relationship between the temporary employment undertaking or placement agency and the worker during the period of posting.

…’

16. Article 3 of Directive 96/71, concerning terms and conditions of employment, is worded as follows:

‘1. Member States shall ensure that, whatever the law applicable to the employment relationship, the undertakings referred to in Article 1(1) guarantee workers posted to their territory the terms and conditions of employment covering the following matters which, in the Member State where the work is carried out, are laid down:

– by law, regulation or administrative provision, and/or

– by collective agreements or arbitration awards which have been declared universally applicable within the meaning of paragraph 8, in so far as they concern the activities referred to in the Annex:

(a) maximum work periods and minimum rest periods;

(b) minimum paid annual holidays;

(c) the minimum rates of pay, including overtime rates; this point does not apply to supplementary occupational retirement pension schemes;

(d) the conditions of hiring‑out of workers, in particular the supply of workers by temporary employment undertakings;

(e) health, safety and hygiene at work;

(f) protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people;

(g) equality of treatment between men and women and other provisions on non‑discrimination.

For the purposes of this Directive, the concept of minimum rates of pay referred to in paragraph 1(c) is defined by the national law and/or practice of the Member State to whose territory the worker is posted.

...

7. Paragraphs 1 to 6 shall not prevent application of terms and conditions of employment which are more favourable to workers.

Allowances specific to the posting shall be considered to be part of the minimum wage, unless they are paid in reimbursement of expenditure actually incurred on account of the posting, such as expenditure on travel, board and lodging.

8. “Collective agreements or arbitration awards which have been declared universally applicable” means collective agreements or arbitration awards which must be observed by all undertakings in the geographical area and in the profession or industry concerned.

In the absence of a system for declaring collective agreements or arbitration awards to be of universal application within the meaning of the first subparagraph, Member States may, if they so decide, base themselves on:

– collective agreements or arbitration awards which are generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned, and/or

– collective agreements which have been concluded by the most representative employers’ and labour organisations at national level and which are applied throughout national territory,

provided that their application to the undertakings referred to in Article 1(1) ensures equality of treatment on matters listed in the first subparagraph of paragraph 1 of this Article between those undertakings and the other undertakings referred to in this subparagraph which are in a similar position.

Equality of treatment, within the meaning of this Article, shall be deemed to exist where national undertakings in a similar position:

– are subject, in the place in question or in the sector concerned, to the same obligations as posting undertakings as regards the matters listed in the first subparagraph of paragraph 1, and

– are required to fulfil such obligations with the same effects.

...

10. This Directive shall not preclude the application by Member States, in compliance with the Treaty, to national undertakings and to the undertakings of other States, on a basis of equality of treatment, of:

– terms and conditions of employment on matters other than those referred to in the first subparagraph of paragraph 1 in the case of public policy provisions,

– terms and conditions of employment laid down in the collective agreements or arbitration awards within the meaning of paragraph 8 and concerning activities other than those referred to in the Annex.’

17. According to Article 4(1) and (3) of Directive 96/71, in the context of cooperation on information, each Member State may designate one or more liaison offices in its territory and take the appropriate measures to make the information on the terms and conditions of employment referred to in Article 3 generally available.

18. Moreover, under the second paragraph of Article 5 of Directive 96/71, Member States must in particular ensure that adequate procedures are available to workers and/or their representatives for the enforcement of obligations under the directive.

19. Also, the 21st and 22nd recitals in the preamble to Directive 96/71 indicate, respectively, that Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, self-employed persons and to members of their families moving within the Community ( ) lays down the provisions applicable with regard to social security benefits and contributions, and that Directive 96/71 is without prejudice to the law of Member States concerning collective action to defend the interests of trades and professions.

20. Finally, the annex to Directive 96/71 refers to all building work, including work relating to the construction, repair, and alteration of buildings.

B – National law

1. National law on the posting of workers

21. Paragraph 5 of the Law on the posting of workers (lagen (1999:678) om utstationering av arbetstagare) (‘the Swedish Law on the posting of workers’), which transposed Directive 96/71 in Sweden, indicates the terms and conditions of employment applicable to posted workers, regardless of the law applicable to the contract of employment itself. In so doing, that paragraph refers to the terms and conditions of employment in relation to the matters listed in Article 3(1)(a) to (g) of Directive 96/71, with the exception of the minimum rate of pay referred to in point (c). The Swedish Law on the posting of workers is in fact silent regarding remuneration, which is traditionally governed in Sweden by collective agreements. Nor does it refer to terms and conditions of employment relating to matters other than remuneration that are governed by collective agreements.

22. It is common ground that this situation derives from the characteristics of the Swedish system, which grants collective agreements concluded by both sides of industry a dominant role in providing workers with the protection afforded to them by legislation in the other Member States. Since the cover provided by collective agreements is extensive in Sweden, in that they apply to more than 90% of workers in the private sector, and the mechanisms and procedures available to both sides of industry satisfactorily ensure compliance with the minimum rules laid down by the collective agreements, the Swedish legislature did not consider it necessary to extend the effect of those agreements by means of a declaration of universal application. According to the Swedish legislature, a declaration of universal application covering only foreign service providers carrying on an activity in Sweden temporarily would have had the effect of creating discrimination between those providers and Swedish undertakings, in so far as the collective agreements never apply automatically to the latter. In Sweden, there is thus no system of the kind mentioned in Article 3(1) and (8) of Directive 96/71 for declaring collective agreements to be of universal application.

23. According to Paragraph 9 of the Swedish Law on the posting of workers, the liaison office set up in accordance with Article 4 of Directive 96/71 must draw attention to the existence of collective agreements that may be applicable in the event of workers being posted to Sweden and refer all interested parties to the relevant collective agreement for further information.

2. Collective agreements in Sweden

24. Collective agreements, which are agreements governed by civil law, may be concluded at different levels between employers and trade unions, in accordance with the Law on workers’ participation in decisions (lagen (1976:580) om medbestämmande i arbetslivet ou medbestämmandelagen) (‘the MBL’). ( ) As indicated above, the coverage of collective agreements in the Swedish private sector is very extensive.

25. Collective agreements are generally concluded at national level between employers’ and workers’ organisations, in various spheres of activity. They are then binding on all employers that are members of the organisation concerned. An undertaking which is not a member of the employers’ organisation that signed the agreement, including a foreign undertaking, may also be bound by a collective agreement if it concludes what is known as a ‘tie-in’ agreement (‘hängavtal’ in Swedish) (‘a tie-in agreement’ or ‘a tie-in’) at local level, with the local branch of the trade union in question. By signing a tie-in agreement, the employer undertakes to comply with the collective agreements generally applied in the sector to which it belongs. That agreement implies that the parties are bound by an obligation to ensure good labour relations, enabling them then, in particular, to open negotiations on the wage levels to be applied to the workers concerned.

26. In addition, numerous collective agreements contain ‘fall-back clauses’ (‘stupstocksregel’ in Swedish), which envisage last-resort solutions for problems on which the parties negotiating at local level have been unable to reach agreement within a specified period. Such fall-back clauses may, in particular, concern remuneration.

27. Under the MBL, a collective agreement signed by an employer at national level, or with which an employer associates itself by a tie-in agreement at local level, applies to all workers in the workplace, whether or not they are affiliated to a trade union.

3. National law concerning collective action

28. The right to undertake collective action in Sweden is a constitutional right, guaranteed in Chapter 2 of the Swedish Basic Law laying down organisational rules for the public authorities (Regeringsformen 1974:152). Paragraph 17 of that law authorises workers’ and employers’ organisations to take collective action, unless otherwise provided by a law or an agreement.

29. The MBL sets out the limitations on the right to resort to collective action, which include cases where there are good labour relations between employers and workers bound by a collective agreement.

30. According to the first subparagraph of Paragraph 42 of the MBL, as interpreted by the case-law, taking collective action with the aim of obtaining the repeal of or amendment to a collective agreement between other parties is prohibited. In a judgment of the Arbetsdomstolen of 1989, known as the Britannia case, ( ) it was held that that prohibition extended to collective action undertaken in Sweden in order to obtain the repeal of or amendment to a collective agreement concluded between foreign parties, in a workplace abroad, if such collective action is prohibited by the foreign law applicable to the signatories to that collective agreement.

31. In order to limit the scope of the principle expounded in the Britannia judgment, the Swedish legislature adopted a law known as the ‘Lex Britannia’, which entered into force on 1 July 1991 and inserted three provisions in the MBL, namely Paragraphs 25a, 31a and 42, third subparagraph.

32. Paragraph 25a of the MBL provides that ‘a collective agreement which has become invalid under foreign law on the ground that it was concluded after collective action shall nevertheless be valid in Sweden if the collective action in question is authorised under Swedish law’.

33. Under Paragraph 31a of the MBL, ‘in the event that an employer bound by a collective agreement, to which the present Law would not apply directly, thereafter concludes a collective agreement in accordance with Paragraphs 23 and 24 of this Law, the subsequent collective agreement shall apply whenever the agreements contain provisions conflicting with each other’.

34. Paragraph 42 of the MBL provides:

‘Employers’ organisations or workers’ organisations shall not be entitled to organise or encourage illegal collective action in any way whatsoever. Nor shall they be entitled to participate in any illegal collective action, by providing support or in any other way … .

If any illegal collective action is commenced, third parties shall be prohibited from participating in it.

The provisions of the first two sentences of the first subparagraph shall apply only if an organisation commences collective action by reason of employment relationships falling directly within the scope of the present Law.’

35. The collective actions to which the MBL relates include, in addition to strikes and lock-outs, blockades, that is to say boycotting measures taken by a trade union against an employer in order to prevent it from using workers who are members of that union, and also ‘solidarity action’ (‘sympatiåtgärd’), which involves, in particular, the giving of support by a trade union that is not itself a party to an industrial dispute to another union, by the taking of action directed towards the same end.

III – The dispute in the main proceedings and the questions referred

36. In early May 2004, Laval un Partneri Ltd (‘Laval’), a company incorporated under Latvian law whose registered office is in Riga, posted several dozen workers from Latvia to work on Swedish building sites. The works were undertaken by a subsidiary company, L&P Baltic Bygg AB (‘Baltic Bygg’). The work included the renovation and extension of school premises in the town of Vaxholm, in the Stockholm area. Baltic Bygg was awarded the public works contract following a tendering procedure. The contract concluded between the municipal administration and the undertaking provided that Swedish collective agreements and tie-in agreements would be applicable to the building site but, according to Laval, the parties subsequently agreed not to apply that clause.

37. In June 2004, contacts were established between a representative of Laval and of Baltic Bygg on the one hand, and, on the other, a delegate of (local) trade union branch No 1 (Svenska Byggnadsarbetareförbundet avdelning 1) (‘the local trade union branch’) of the Swedish building and public works trade union (Svenska Byggnadsarbetareförbundet) (‘Byggnadsarbetareförbundet’). ( ) Negotiations were commenced with the local trade union branch with a view to concluding a tie-in to the collective agreement for the building sector, signed between Byggnadsarbetareförbundet and the Swedish building employers’ association (Sveriges Byggindustrier) (‘the Byggnadsarbetareförbundet collective agreement’). The tie-in agreement would have resulted in extending the application of the Byggnadsarbetareförbundet collective agreement to the workers posted by Laval to the building site in the municipality of Vaxholm. However, no agreement was reached. According to the information provided by the national court in its order for reference, the local trade union branch required, first, conclusion of the tie-in agreement in respect of the building site in question and, second, the guarantee of an hourly wage of SEK 145 ( ) for workers on the site, which, according to the local trade union branch, represented an average hourly wage. No such agreement having been reached, the local trade union branch indicated that Byggnadsarbetareförbundet would be prepared to take collective action.

38. According to the information in the file, at the end of 2004 the local trade union branch stated that it was prepared to abandon its claim for a wage of SEK 145 an hour, provided that Laval signed the tie-in agreement. In such a case, Laval would have had the benefit of good labour relations and wage negotiations could have started in accordance with the Byggnadsarbetareförbundet collective agreement. ( ) If those negotiations had failed, first at local level with the local trade union branch and then centrally with Byggnadsarbetareförbundet, Laval would still have been able to take advantage of the wage fall-back clause included in the Byggnadsarbetareförbundet collective agreement, which set a basic wage of SEK 109 an hour ( ) for the second half of 2004.

39. In September and October 2004, Laval signed two collective agreements with the building sector’s trade union in Latvia. Its posted workers were not affiliated to the Swedish trade unions.

40. Collective action by Byggnadsarbetareförbundet and its local trade union branch started on 2 November 2004 following advance notice of a blockade of all work at all Laval construction sites. As from 3 December 2004, the Swedish electricians’ trade union (Svenska Elektrikerförbundet) (‘the SEF’) ( ) joined in to express solidarity. All electrical work being carried out on the Vaxholm building site was thus halted. After the work on that site had been interrupted for some time, Baltic Bygg became the subject of liquidation proceedings. In the meantime, the Latvian workers posted by Laval to the Vaxholm site returned to Latvia. According to information given by the national court in its order for reference, the trade union collective action was still ongoing in September 2005.

41. In December 2004, Laval commenced proceedings before the Arbetsdomstolen seeking, first, a declaration as to the illegality both of the collective action by Byggnadsarbetareförbundet and its local trade union branch, affecting all Laval’s worksites, and of the solidarity action by the SEF in relation to the blockade; second, an order that such action should cease; and, finally, an order that the trade unions pay compensation for the loss suffered by it. Laval also sought from the Arbetsdomstolen an interim order that the collective action should be brought to an end. That application was rejected by an order of 22 December 2004.

42. In its decision on the merits, the Arbetsdomstolen concluded that its examination of the legality of the collective action described above raised questions of interpretation of Community law and referred the following two questions to the Court of Justice for a preliminary ruling:

‘(1) Is it compatible with rules of the EC Treaty on the freedom to provide services and the prohibition of any discrimination on the grounds of nationality and with the provisions of Directive 96/71/EC … for trade unions to attempt, by means of industrial action in the form of a blockade, to force a foreign temporary provider of services to sign a collective agreement in the host country in respect of terms and conditions of employment, such as that described in the [order for reference], if the situation in the host country is such that the legislation intended to implement Directive 96/71 has no express provisions concerning the application of terms and conditions of employment in collective agreements?

(2) The [MBL] prohibits a trade union from taking collective action with the intention of circumventing a collective agreement concluded by other parties. That prohibition applies, however, pursuant to a special provision contained in part of the law known as the “Lex Britannia”, only where a trade union takes collective action in relation to conditions of work to which the [MBL] is directly applicable, which means in practice that the prohibition is not applicable to collective action against a foreign undertaking which is temporarily active in Sweden and which brings its own workforce. Do the rules of the EC Treaty on the freedom to provide services and the prohibition of discrimination on grounds of nationality and the provisions of Directive 96/71 constitute an obstacle to an application of the latter rule – which, together with other parts of the Lex Britannia, mean in practice that Swedish collective agreements become applicable and take precedence over foreign collective agreements already concluded – to collective action in the form of a blockade taken by Swedish trade unions against a foreign temporary provider of services in Sweden?’

IV – Procedure before the Court of Justice

43. In its order for reference, the Arbetsdomstolen asked the Court to deal with the case under an accelerated procedure, in accordance with the first paragraph of Article 104a of the Rules of Procedure.

44. By order of 15 December 2005, the President of the Court of Justice rejected that application.

45. Pursuant to Article 23 of the Statute of the Court of Justice, written observations were submitted by the applicant and the defendants in the main proceedings, 14 Member States, namely the Kingdom of Belgium, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Estonia, the Kingdom of Spain, the French Republic, Ireland, the Republic of Latvia, the Republic of Lithuania, the Republic of Austria, the Republic of Poland, the Republic of Finland and the Kingdom of Sweden, and by the Commission of the European Communities, the Republic of Iceland, the Kingdom of Norway and the EFTA Surveillance Authority.

46. Those parties presented oral argument at the hearing on 9 January 2007, with the exception of the Kingdom of Belgium and the Czech Republic, which did not send representatives. In addition, the United Kingdom of Great Britain and Northern Ireland presented oral argument at that hearing.

V – Legal analysis

A – Preliminary observations

47. Before the questions are analysed, it is necessary to respond to the objections of a general nature raised by the Danish and Swedish Governments as to the applicability of Community law and to the more technical objections raised by the defendants in the main proceedings regarding the admissibility of the request for a preliminary ruling.

1. The applicability of Community law

48. The Danish Government considers that the right to take collective action in order to force an employer to conclude a collective agreement, under national legislation, falls outside the scope of Community law since, in accordance with Article 137(5) EC, the Community has no power directly or indirectly to regulate any such action.

49. It also submits, with the Swedish Government, that the inapplicability of Community law, and in particular of the freedoms of movement provided for by the Treaty, derives from the fact that, by virtue, in particular, of various international instruments concerning the protection of human rights, the right to resort to collective action is a fundamental right.

50. As regards, first, the first argument put forward by the Danish Government, it will be seen that, contrary to the suggestion made by certain parties participating in the hearing, its objection does not amount to maintaining that the social sphere, as such, falls outside the scope of Community law. Apart from the difficulties inherent in precisely defining the expression ‘social sphere’, such a position would be manifestly indefensible and anachronistic: first, the social laws of the Member States do not enjoy any general exemption from the application of the Treaty rules, in particular those concerning the freedoms of movement provided for by the Treaty, and in exercising the powers they retain in that sphere the Member States must comply with Community law; ( ) and, second, the Community, under Chapter 1 of Title XI of the Treaty, also has powers, albeit limited, in the social sphere, which are intended to support and supplement the action of the Member States, under the conditions laid down in Articles 137 EC to 145 EC.

51. Those two aspects of Community integration, often described, respectively, as ‘negative integration’, namely, in particular, an obligation of the Member States not to oppose the application of the freedoms of movement provided for by the Treaty, and ‘positive integration’ do not, however, conflict with each other, as is illustrated, in particular, by Article 136 EC, since the development of social policy in the Community ( ) is seen as capable of deriving ‘not only from the functioning of the common market, which will favour the harmonisation of social systems, but also from the procedures provided for in [the] Treaty and from the approximation of provisions laid down by law, regulation or administrative action’. ( )

52. In those circumstances, the objection raised by the Danish Government to the applicability of Community law in the present case is based more precisely on Article 137(5) EC, which provides that ‘the provisions of this article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs’.

53. However, that provision does not, I believe, have the general scope attributed to it by the Kingdom of Denmark.

54. It is clear from its actual wording that Article 137(5) EC seeks only to exclude from measures which may be adopted by the Community institutions in the fields listed in Article 137(1), in accordance with the arrangements laid down in Article 137(2) (qualified majority or unanimity within the Council and procedures for co-decision with or consultation of the European Parliament, as the case may be), the aspects of the social policy of the Member States relating to pay, the right of association, the right to strike and the right to impose lock-outs.

55. That wording, and also the part of the Treaty in which paragraph 5 of Article 137 EC is located, thus hardly lends itself to an extensive interpretation of that paragraph whereby it would determine the scope of all provisions of the Treaty.

56. Moreover, it is not certain that the reservation in Article 137(5) EC regarding the right to strike and impose lock-outs extends more generally to all collective action. It must be noted that, under Article 137(1)(f) EC, the Community may supplement action taken by the Member States in the sphere of ‘representation and collective defence of the interests of workers and employers, including co-determination, subject to paragraph 5’. The function of the latter paragraph therefore seems to be to limit the attribution of legislative powers to the Community in fields which are listed exhaustively.

57. Nevertheless, even if it were permissible to interpret the reference to the right to strike and to impose lock-outs in Article 137(5) EC as extending more generally to the right to take collective action, the fact would nevertheless remain that that provision does no more than exclude the adoption by the Community institutions of the measures referred to in Article 137(2), in particular the adoption of directives laying down minimum requirements governing the right to take collective action. If the effectiveness of Article 137(5) EC is to be upheld, the Community institutions could not of course resort to other legal bases in the Treaty in order to adopt measures designed to approximate the laws of the Member States in this field.

58. It may be appropriate to point out that Directive 96/71, for example, does not fall within that case, being based on the Treaty provisions governing the freedom to provide services, and the purpose of which is to coordinate the conflict-of-laws rules of the Member States in order to determine which national law should apply to the provision of cross-border services where workers are posted temporarily abroad within the Community, without harmonising either the substantive rules of the Member States as regards employment law and the terms and conditions of employment relating, in particular, to rates of pay, or the right to resort to collective action.

59. That said, even if Article 137(5) EC were interpreted as reserving exclusive competence to the Member States regarding regulation of the right to resort to collective action, that provision would not mean that, in the exercise of that competence, the Member States did not need to satisfy themselves that the fundamental freedoms of movement provided for by the Treaty are respected within their territory.

60. It must next be established – and I must now examine the objection raised by both the Danish and the Swedish Governments regarding the applicability of Community law to this case – whether the right to resort to collective action, as guaranteed by their respective national laws, may nevertheless fall outside the scope of the freedoms of movement provided for by the Treaty by reason of its alleged status as a fundamental right.

61. This question is of very great importance because, if the application of the freedoms of movement provided for by the Treaty, in this case the freedom to provide services, were to undermine the very substance of the right to resort to collective action, which is protected as a fundamental right, such application might be regarded as unlawful, even if it pursued an objective in the general interest. ( )

62. Apart from the references to the right to strike and the right to impose lock-outs discussed above, the Treaty makes no reference whatsoever to any right – which is more fundamental – to resort to collective action in order to defend the interests of trades and professions pursued by union members.

63. Under Article 6(2) EU, ‘the Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law’.

64. Even though, in terms of international instruments, that article mentions only the European Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’), its wording is inspired by the case-law of the Court of Justice to the effect that that Treaty has ‘special significance’, ( ) in order to enable the Court to identify the general principles of Community law.

65. The Court is entitled, in so doing, to draw inspiration from instruments for the protection of human rights other than the ECHR.

66. As regards the question before us, it will be observed that the preamble to the EU Treaty and Article 136 EC refer both to the European Social Charter signed at Turin on 18 October 1961, which was concluded under the aegis of the Council of Europe, and the 1989 Community Charter of the Fundamental Social Rights of Workers, which is not legally binding, in affirming that the rights enshrined in those instruments have the status of ‘fundamental social rights’. The Court has also referred in its case-law to the European Social Charter ( ) and to the Community Charter of the Fundamental Social Rights of Workers. ( )

67. The Court’s concern to accord ‘special significance’ to the ECHR, without thereby excluding other sources of inspiration, found expression in the Charter of Fundamental Rights of the European Union solemnly proclaimed on 7 December 2000 in Nice by the European Parliament, the Council and the Commission, after approval by the Heads of State or Government of the Member States ( ) (‘the Charter of Fundamental Rights’).

68. Admittedly, the Charter of Fundamental Rights is not a legally binding instrument. However, the Court has already emphasised that its principal aim, as is apparent from its preamble, is to ‘reaffirm rights as they result, in particular, from the constitutional traditions and international obligations common to the Member States, the Treaty on European Union, the Community Treaties, the [ECHR], the Social Charters adopted by the Community and by the Council of Europe, and the case-law of the Court … and of the European Court of Human Rights’. ( )

69. With regard to trade union freedom and the right to resort to collective action, it will first be observed that Article 11 of the ECHR, relating to freedom of assembly and of association – of which trade union freedom is merely one special aspect – ( ) states, in paragraph 1, that everyone has the right ‘to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests’. Paragraph 2 states that ‘no restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others …’.

70. Article 11(1) of the ECHR protects both the freedom to join a union (the ‘positive’ aspect of freedom of association) and the right not to join one or to withdraw from one (the ‘negative’ aspect of that freedom). ( ) In that regard, the European Court of Human Rights has held that, although compulsion to join a particular trade union may not always be contrary to the ECHR, a form of such compulsion which, in the circumstances of the case, strikes at the very substance of the freedom of association guaranteed by Article 11 of the ECHR will constitute interference with that freedom. National authorities may therefore be obliged in certain circumstances to intervene in the relationships between private individuals by taking reasonable and appropriate measures to secure the effective enjoyment of the right not to join a union. ( )

71. Although Article 11(1) of the ECHR does not explicitly mention the right to resort to collective action, the European Court of Human Rights has taken the view that the words ‘for the protection of his interests’ contained in it ‘show that the [ECHR] safeguards freedom to protect the occupational interest of trade union members by trade union action, the conduct and development of which the Contracting States must both permit and make possible’. ( )

72. However, it is apparent from the case-law of the European Court of Human Rights that Article 11(1) of the ECHR, by leaving each Member State free to choose the means to be used for that purpose, does not necessarily imply a right to strike, since the interests of union members may be defended by other means and, moreover, the right to strike is not expressly upheld by Article 11 of the ECHR and may be subject under national law to regulation of a kind that limits its exercise in certain instances. ( ) Similarly, the European Court of Human Rights has recognised that the conclusion of collective agreements may also constitute a means of defending the interests of the members of a union, ( ) whilst at the same time rejecting any right, on which a union might purport to rely vis-à-vis the State, to conclude such agreements. ( ) Until now, the only form of collective action which has been expressly upheld by the European Court of Human Rights, as a fully-fledged right, is the right to be ‘heard’ by the State. ( )

73. That case-law could thus be summarised as meaning that Article 11(1) of the ECHR requires the Contracting Parties to enable trade unions to strive to defend their members’ interests, ( ) without thereby imposing on them the means to be used to that end.

74. It must then be observed that, under Article 6(4) of the European Social Charter, the Contracting Parties recognise ‘the right of workers and employers to collective action in cases of conflicts of interest, including the right to strike, subject to obligations that might arise out of collective agreements previously entered into’. The appendix to the charter, which forms an integral part thereof, ( ) states, with regard to Article 6(4), that ‘it is understood that each Contracting Party may, in so far as it is concerned, regulate the exercise of the right to strike by law, provided that any further restriction that this might place on the right can be justified under the terms of Article 31’. It is clear from Article 31(1) that the effective exercise of the rights and principles set forth in the European Social Charter is not to be subject to any restrictions or limitations not specified in Parts I and II of the charter, except such as are prescribed by law and are necessary in a democratic society for the protection of the rights and freedoms of others or for the protection of public interest, national security, public health or morals.

75. Moreover, paragraph 13 of the Community Charter of Fundamental Social Rights provides that ‘the right to resort to collective action in the event of a conflict of interests shall include the right to strike, subject to the obligations arising under national regulations and collective agreements’.

76. Finally, Article 28 of the Charter of Fundamental Rights provides that ‘workers and employers, or their respective organisations, have, in accordance with Community law and national laws and practices, the right … in cases of conflict of interest, to take collective action to defend their interests, including strike action’. Article 52(1) of that charter states that ‘any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others’.

77. As regards the constitutional traditions of the Member States, whilst I am not of the view that they must be examined exhaustively, in view of the fact that, as emphasised in point 68 of this Opinion, the Charter of Fundamental Rights, although not binding, is principally intended to reaffirm the rights resulting in particular from those traditions, I would nevertheless point out that the constitutional instruments of numerous Member States explicitly protect the right to establish trade unions ( ) and the defence of their interests by collective action, ( ) the right to strike being, in that connection, the method most regularly referred to. ( )

78. This analysis prompts me to consider that the right to resort to collective action to defend trade union members’ interests is a fundamental right. ( ) It is therefore not merely a ‘general principle of labour law’, as the Court has already held in relatively old case-law in Community staff cases, ( ) but rather a general principle of Community law, within the meaning of Article 6(2) EU. That right must therefore be protected in the Community.

79. However, contrary to the suggestion of the Danish and Swedish Governments, to recognise such a status and such protection for the right to take collective action does not result in the inapplicability of the EC Treaty rules on freedom of movement in circumstances such as those of the main proceedings.

80. In the first place, as the international instruments cited above and the case-law of the European Court of Human Rights make clear, it is necessary to distinguish between the right to resort to collective action and the means of exercising it, which may differ from one Member State to another and do not automatically enjoy the protection enjoyed by that right itself. Thus, whilst such an assessment appears valid regarding the right to strike, which, although regularly mentioned as one of the most important means of taking collective action, is generally guaranteed subject to recognition of an equivalent right for employers, ( ) most often in the form of a lock-out, it is in any event relevant, in my opinion, in relation to the considerably less common forms of action represented by the collective action in the main proceedings, namely a blockade and solidarity action.

81. Next, by way of corollary, the abovementioned instruments protecting human rights and the constitutions of the Member States examined above all recognise the possibility of imposing certain restrictions on the exercise of the right to take collective action. It can be inferred from those documents that such restrictions must be laid down in a legislative or regulatory measure, must be justified by the pursuit of an overriding general interest and must not affect the ‘essence’ of that right, to use the term appearing in Article 52 of the Charter of Fundamental Rights, or impair the very substance of the right or the freedom thus protected. ( )

82. I do not see why only restrictions of a solely national origin may be imposed on the exercise of the right to take collective action where, as in this case, the action in question is designed to compel a foreign service provider to sign a collective agreement and, consequently, that operator, in order to oppose such collective action, seeks to rely, inter alia, on one of the fundamental freedoms of movement provided for by the Treaty, which does not appear to be manifestly unconnected with the case before the referring court, as I shall make clear in the second part of the present introductory observations.

83. It is true that it is incontestably incumbent on the Member States to ensure that trade unions are able to defend their members’ interests by collective action within their territory. ( ) Provided that the Member States authorise one or more forms of such action within their territory, they also have the right to define the limits and the conditions for taking such action, in accordance with the instruments for the protection of human rights referred to earlier. However, they must also ensure that the obligations they have decided to assume under the Treaty, including, in particular, respect for the fundamental freedoms of movement which it enshrines, are observed within their territory.

84. To reject in all cases the applicability of the freedoms of movement provided for in the Treaty with the aim of guaranteeing the protection of fundamental rights would in reality amount to upholding a hierarchy between the rules or principles of primary law which, if not necessarily entirely inapposite, is not allowed as Community law stands at present. ( )

85. Thus, far from being excluded in this case, application of the fundamental freedoms of movement provided for by the Treaty must, in fact, be reconciled with the exercise of a fundamental right.

86. That specific necessity to ‘weigh’ those requirements was upheld by the Court in the Schmidberger judgment, to which I shall return later, in a context in which the national authorities, having authorised a demonstration on a motorway route of central importance to transalpine traffic, relied on the need to respect fundamental rights guaranteed both by the ECHR and by the constitution of the Member State concerned to allow a limitation to be placed on one of the fundamental freedoms of movement enshrined in the Treaty. ( )

87. Apparently, the Court did not consider at all that, by reason of the fundamental rights whose exercise was at issue in that case, namely freedom of expression and freedom of assembly, as covered by Articles 10 and 11 of the ECHR respectively, the rules of the Treaty on the free movement of goods were inapplicable.

88. Moreover, to accept the inapplicability of the Treaty rules and principles in a situation such as the present case, as contended for by the Danish and Swedish Governments, would, in my opinion, be liable to conflict with the case-law of the Court which makes it clear that provisions in collective agreements do not fall outside the scope of such precepts, in particular as regards observance of the principle of non-discrimination, ( ) which finds expression in particular in the principle of equal pay for men and women. ( )

89. Indeed, in my opinion it would be inconsistent, or indeed contradictory, to exclude from the scope of the Treaty collective action, in the form of a blockade or solidarity action, whose aim is to compel an employer to sign a collective agreement and yet, possibly at the same time, to require such an agreement to comply with the principle of non-discrimination, as specifically embodied in the provisions of that Treaty.

90. Finally, although this argument is not decisive in itself, let me nevertheless point out, in view of the exceptional number of parties that have submitted observations to the Court, that of the 17 States which have participated in these proceedings, 15 did not raise any doubt as to the applicability of Community law and, in particular, that of the freedom to provide services, in this case.

91. I therefore propose that the Court rule that the exercise by trade unions of a Member State of their right to take collective action in order to compel a foreign service provider to conclude a collective agreement in the Member State in which the service provider seeks to avail itself, in particular, of the freedom to provide services embodied in the Treaty falls within the scope of Community law.

92. It is now necessary to examine the objection made by the defendants in the main proceedings regarding the admissibility of the request for a preliminary ruling.

2. The admissibility of the request for a preliminary ruling

93. The defendants in the main proceedings contend that the request for a preliminary ruling is inadmissible. In support of that view, they submit that the questions submitted by the referring court have no bearing on the factual circumstances of the case before the national court: because Laval is established in Sweden through its subsidiary, neither Directive 96/71 nor Article 49 EC can be applicable. The factual situation giving rise to the dispute is thus, in their view, based on an artificial construct designed to evade the application of Swedish labour law, in that ultimately Laval seeks access for Latvian workers to the labour market of the host Member State whilst at the same time seeking to escape the obligations deriving from the application of the labour law of that State.

94. In my view, that argument must be rejected because, essentially, it seeks to call in question the assessment of the facts made by the national court.

95. According to the case-law, in proceedings under Article 234 EC, which are based on a clear separation of functions between the national courts and the Court of Justice, any assessment of the facts in the case is a matter for the national court. It is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to give judgment and the relevance of the questions which it submits to the Court. ( )

96. As the Court has also indicated, the presumption of relevance attaching to questions submitted by national courts for a preliminary ruling can be overturned only in exceptional cases, namely where it is quite obvious that the interpretation of Community law sought bears no relation to the actual facts of the main action or to its purpose, or where the problem is hypothetical or the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it. Save for such cases, the Court is, in principle, required to give a ruling on questions submitted to it for a preliminary ruling. ( )

97. In this case, as I have already said, the national court seeks an interpretation of Articles 12 EC and 49 EC, and provisions of Directive 96/71 concerning the posting of workers in the framework of the provision of services. It is apparent from the order for reference that those questions have been submitted in the context of the dispute between Laval, a company established in Latvia, and the Swedish trade union Byggnadsarbetareförbundet, its local trade union branch and the SEF, concerning collective action taken by the latter following Laval’s refusal to sign the Byggnadsarbetareförbundet collective agreement to govern terms and conditions of employment of Latvian workers posted by Laval to a building site in Sweden and in relation to work carried out by an undertaking belonging to the Laval group. It is common ground that, following collective action and suspension of the works, the posted workers returned to Latvia.

98. The interpretation of Community law sought by the national court does not appear to be manifestly unconnected with the circumstances or subject-matter of the dispute in the main proceedings and does not appear to be of a hypothetical nature.

99. I would add that, having regard to the information in the file, the national court is right to consider that Laval’s economic activity constitutes a provision of services within the meaning of Article 49 EC and Directive 96/71.

100. In that connection, and having regard also to the argument put forward by the defendants in the main proceedings, according to which Laval’s aim in posting workers abroad was to secure access for Latvian workers to the Swedish employment market, I consider it appropriate at this stage to make a number of observations on the relationship between the Treaty provisions referred to by the national court and those of the Act concerning the Conditions of Accession of the Republic of Latvia to the European Union ( ) (‘the 2003 Act of Accession’), which, it will be remembered, at the material time also governed relations between the Republic of Latvia and the other Member States, but is not mentioned in the order for reference.

101. Under Article 2 of the 2003 Act of Accession, the provisions of the original Treaties ( ) and the acts adopted by the institutions before accession are to be binding on the new Member States and to apply to those States under the conditions laid down in those Treaties and that Act.

102. The Treaty provisions, in particular those relating to freedom to provide services, therefore apply in principle to relations between the Republic of Latvia and the other Member States as from the date of accession, namely 1 May 2004, subject to the conditions laid down in the 2003 Act of Accession.

103. Article 24 of the 2003 Act of Accession refers to the annexes to that Act which list, for each of the 10 new Member States, the transitional provisions that are to apply to them and the conditions for their application.

104. Annex VIII to the 2003 Act of Accession, which applies to the Republic of Latvia, specifically refers to Article 39 EC, the first paragraph of Article 49 EC and Directive 96/71.

105. However, the conditions for the application of those provisions, as set out in Annex VIII to the 2003 Act of Accession, have no impact on the circumstances of the present case.

106. As regards, first, the first paragraph of Article 49 EC and Directive 96/71, it is clear from paragraph 13 of Annex VIII to the 2003 Act of Accession that the transitional provisions derogating from full application of that article and that directive relate only to the temporary movement of workers in the context of the provision of services, by undertakings established in Latvia, within the territory of Germany and Austria, under the conditions set out in that paragraph. Paragraph 13 of Annex VIII to the 2003 Act of Accession is not therefore applicable from the territorial point of view to the facts of this case.

107. Since Directive 96/71 may apply to Laval’s economic activity, it is important to note that, by virtue of Article 1(3)(b) of that directive, it covers the business of an undertaking established in a Member State which posts a worker to the territory of another Member State, to an establishment or to an undertaking owned by the group, provided that there is an employment relationship between the undertaking making the posting and the worker during the period of posting.

108. According to the order for reference, that would indeed seem to be the situation in which Laval and the Latvian workers whom that company temporarily posted to Sweden found themselves. It should also be noted that it is common ground that the activities for which Laval posted Latvian workers to Sweden fall within the scope of the annex to Directive 96/71, that is to say they are carried out in the building sector.

109. Next, as regards freedom of movement for workers, it will be observed that, at the material time, the Member States were entitled, under paragraph 2 of Annex VIII to the 2003 Act of Accession, by way of derogation from Articles 1 to 6 of Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community, ( ) and until the end of the two-year period following the date of accession (namely 30 April 2006), to apply national measures or measures resulting from bilateral agreements governing access by Latvian nationals to their labour market. ( ) Admittedly, the Member States were entitled to decide, in the same way as the Kingdom of Sweden, to liberalise access to their labour markets as from 1 May 2004. ( ) However, any such decision was to be adopted under national law and not under provisions of Community law. ( )

110. It is at this stage of my Opinion that there comes into play the argument of the defendants in the main proceedings, referred to above, that the aim of Laval’s posting of workers to its subsidiary was to secure access for Latvian workers to the Swedish labour market.

111. That argument appears to be prompted by the statement made by the Court of Justice in its judgment in Rush Portuguesa to the effect that the derogation provided for in Article 216 of the Act of Accession of the Portuguese Republic from the freedom of movement for workers provided for by the Treaty precluded the making available of workers from Portugal in another Member State by an undertaking providing services. ( ) According to the Court’s reasoning, such an undertaking, although a provider of services within the meaning of the Treaty, sought in fact to secure access for workers to the employment market of the host Member State, in disregard of the derogation provided for in the Act of Accession.

112. In this case, however, the argument of the defendants in the main proceedings does not appear to be supported by anything in the file, there being nothing to indicate that the aim of Laval’s activity was to enable Latvian workers to gain access to the Swedish employment market. ( )

113. For the sake of completeness – even though this observation also falls outside the question of the admissibility of the preliminary questions in the strict sense, but I shall not return to it – the argument of the defendants in the main proceedings prompted by the Rush Portuguesa judgment has the effect, in my opinion, of undermining and, ultimately, negating their argument, as set out in their written observations, that the present case should be examined only in relation to freedom of movement for workers provided for in Article 39 EC and not in the light of Article 49 EC and/or of Directive 96/71.

114. It need merely be observed that, simply because of the application of the first stage of the transitional measures provided for in Annex VIII to the 2003 Act of Accession at the material time, and even though the Kingdom of Sweden had decided, under its national law, to open its labour market to all workers from States that became members of the European Union on 1 May 2004, Latvian workers could not directly rely on the provisions of Article 39 EC.

115. Finally, contrary to the impression the defendants in the main proceedings seek to give, there is nothing in the file to prove or even indicate that Laval’s activities were wholly or mainly directed towards Swedish territory with a view to evading the rules that would have been applicable to it if it had been established in Sweden. ( )

116. To conclude these preliminary observations, I consider that Community law is applicable to this case and that the request for a preliminary ruling must be declared admissible. It must nevertheless be emphasised that the answers I propose to give to the questions analysed below are not necessarily valid for all cases, in particular where there are different factual situations liable to render applicable the provisions of the 2003 Act of Accession.

B – The questions referred for a preliminary ruling

1. General observations

117. As is apparent from the wording of the two questions, the national court seeks from the Court of Justice an interpretation of Articles 12 EC and 49 EC and of Directive 96/71.

118. So far as concerns Article 12 EC, which imposes a general prohibition on any discrimination on grounds of nationality, that provision is applicable, as it states, ‘without prejudice to any special provisions contained [in the Treaty]’, which implies, in accordance with the case-law, that it falls to be applied autonomously only in situations governed by Community law for which Community law does not lay down specific anti-discrimination rules. ( )

119. That general principle was implemented and shaped both by Article 49 EC ( ) and by Directive 96/71, Article 3 of which provides essentially that the terms and conditions of employment laid down in the host Member State, which fall within the matters listed in that directive or to which the directive refers, apply to service providers that post workers temporarily to the territory of that Member State and to national undertakings that are in a similar situation with regard to equal treatment.

120. It is not therefore necessary, in my view, for the Court to give a ruling on Article 12 EC in the present case.

121. As to Directive 96/71 and Article 49 EC, I must point out that the great majority of the parties that have submitted written observations in this case have suggested that the Court should examine the questions in the light both of Directive 96/71 and of Article 49 EC, regardless of the answers that those parties suggest be given to those questions. ( ) A minority of the parties participating in these proceedings examined the questions only in the light of Article 49 EC, ( ) whereas only the Commission and the Norwegian Government base their analysis of the questions referred by the national court on the provisions of Directive 96/71 alone.

122. In view of those very different positions, it would be helpful to eliminate certain matters from the debate.

123. As regards Directive 96/71, several parties that have submitted observations to the Court, among which the defendants in the main proceedings, the Swedish Government and the EFTA Surveillance Authority stand out, have maintained that there is no point in examining it because it is common ground, first, that the dispute giving rise to the questions is between private persons and, second, that, under the case-law of the Court of Justice, the provisions of a directive cannot have any direct ‘horizontal’ effect.

124. That argument is only partly well founded, since I do not think that it can have the effect of excluding Directive 96/71 from the examination which the Court is asked to undertake.

125. In that connection, in a concern for clarity of reasoning, it is appropriate to expound the logic underlying the questions submitted by the national court in relation to Directive 96/71 and its transposition by the Kingdom of Sweden, in particular in so far as that court refers, in its first question, to the fact that the Swedish Law on the posting of workers contains no express provision on the application of terms and conditions of employment in collective agreements.

126. I would remind you that Article 3 of Directive 96/71, a fundamental provision of that instrument, requires the Member States to ensure that workers posted temporarily to their territory for the provision of services are guaranteed terms and conditions of employment covering the matters listed in paragraph 1 of that article. Those matters include, among other things, minimum rates of pay.

127. The matters listed in Article 3(1) of Directive 96/71 are laid down by law, regulation or administrative provision and/or, as regards activities in the building sector, such as those at issue in the main proceedings, by collective agreements or arbitration awards which have been declared to be of universal application within the meaning of Article 3(8).

128. The first subparagraph of Article 3(8) makes it clear that the agreements that have been declared universally applicable are those which must be observed by all undertakings in the geographical area and in the profession or industry concerned.

129. The second subparagraph of Article 3(8) allows the Member States, in the absence of a system for declaring collective agreements to be of universal application, to take as a basis, if they so decide: (a) collective agreements which are generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned, and/or (b) collective agreements which have been concluded by the most representative employers’ and labour organisations at national level provided, in each such case, that their application ensures equality of treatment between foreign service providers and national undertakings that are in a similar position.

130. It is common ground, as I emphasised when setting out the legal background above, that the Kingdom of Sweden has no system for making declarations of universal application within the meaning of the first subparagraph of Article 3(8) of Directive 96/71 and that it did not avail itself of the second subparagraph of that provision. Moreover, as already indicated in point 21 above, the majority of the terms and conditions of employment concerning the matters listed in Article 3(1) of Directive 96/71 have been adopted by the Swedish Law on the posting of workers which transposes that directive.

131. On the other hand, the method chosen by the Kingdom of Sweden, which seeks to ensure that workers posted temporarily to its territory enjoy the terms and conditions of employment laid down in collective agreements, including, in principle, those relating to rates of pay, consists in leaving it to the workers’ union organisations, if those agreements have not been signed by a service provider, to initiate collective action with a view to compelling that employer to sign those agreements either directly or by means of a tie-in agreement, including where – and this is relevant to the second question from the national court – that provider is already bound by a collective agreement concluded in the Member State of its establishment.

132. It should also be pointed out that the application of the ‘core’ terms and conditions of employment that must be guaranteed by the host Member State to workers temporarily posted to its territory, under Article 3 of Directive 96/71, constitutes a derogation from the principle of application of the legislation of the Member State of origin to the situation of the service provider of that Member State that posts those workers to the territory of the first Member State.

133. Consequently, by seeking guidance from the Court of Justice on whether Article 3 of Directive 96/71 may have been incorrectly transposed into Swedish domestic law, the national court is essentially asking the Court of Justice to enable it to determine whether Laval may set up against the trade unions which are the defendants in the main proceedings the fact that the Kingdom of Sweden did not make use of the arrangements provided for in Article 3 of the directive to extend or endorse, by a measure vested with public authority, the application of collective agreements concluded in its territory to foreign service providers which post workers there temporarily. According to the argument defended by Laval, which also underlies the two questions submitted by the national court, that inaction on the part of the Kingdom of Sweden implies, in this case, that only Latvian legislation and collective agreements are applicable to the posting so that, as a result, the Swedish trade unions are deprived of the possibility of seeking to compel Laval, through collective action, to sign the Byggnadsarbetareförbundet collective agreement at issue in the main proceedings.

134. It is therefore true, as contended by the defendants in the main proceedings, the Swedish Government and the EFTA Surveillance Authority, that the interpretation of Directive 96/71 requested by the national court might result in the direct application of that directive by that court as between Laval and the trade unions which are the defendants in the main proceedings.

135. However, the Court of Justice now seems firmly opposed to the view that a directive might impose obligations on an individual and could therefore be invoked, as such, against that individual. ( )

136. Moreover, I do not believe that that obstacle can be overcome by the attempt, appearing in Laval’s written observations, to widen the concept of a State in such a way that, in the present case, trade unions are regarded as a subdivision of the Swedish State, against which Laval could then directly invoke Directive 96/71, provided that the latter meets the substantive tests of direct effect.

137. Those unions are certainly not public authorities ( ) and they are not entrusted, by an act of a public authority, with performing, under the latter’s control, a service of public interest, nor are they vested, for such a purpose, with powers that go beyond the rules applicable to relations between private individuals. ( )

138. Moreover, the problems associated with the direct horizontal effect of Directive 96/71 would arise only if the Court were persuaded to find that the Kingdom of Sweden incorrectly transposed Article 3 of that directive.

139. That means, first, that Directive 96/71 is not excluded from the review which the Court must undertake since, in its first question, the national court raises, indirectly but necessarily, the question whether the Kingdom of Sweden did correctly transpose that measure.

140. Secondly, even if it were assumed that the measure was incorrectly transposed and it was not possible to apply Directive 96/71 directly in the main proceedings, it must be borne in mind that, under the case-law, national courts must interpret national law, so far as possible, in the light of the wording and purpose of the directive concerned in order to achieve the result sought by the directive. ( ) The obligation on the national courts to interpret national law in conformity with Community law, which extends to all provisions of national law, whether adopted before or after the directive in question, is intended to enable them to ensure the full effectiveness of Community law when they determine the disputes before them by applying methods of interpretation upheld in domestic law. ( )

141. Admittedly, according to the case-law, the obligation to interpret national law in conformity with Community law is delimited by the general principles of law, in particular those of legal certainty and non-retroactivity, and it cannot serve as a basis for an interpretation contra legem of national law. ( )

142. In the present case, that limitation certainly means that the interpretation of national law in conformity with Community law which the national court might adopt should not lead it to impair the very substance of the right to take collective action to defend the interests of workers, which, in my preliminary observations above, I have recognised as constituting a general principle of Community law, also upheld by the Swedish Constitution. Moreover, no risk of that kind could derive from an interpretation of national law in conformity with Directive 96/71 because it is stated, superabundantly, in the 22nd recital in its preamble, that the measure is without prejudice to the law of the Member States concerning collective action to defend the interests of trades and professions. ( )

143. Although its provisions cannot be held to have direct horizontal effect, examination by the Court of Directive 96/71 is thus far from irrelevant, a point which I shall return to below.

144. It remains to be determined whether the Court can dispense with an analysis of the questions in the light of Article 49 EC or whether it must examine them in the light of that provision as well.

145. It should be remembered in that connection that Directive 96/71, as is claimed, in essence and correctly, by a number of the parties that have submitted written observations in this case, represents a specific interpretation of Article 49 EC in the light of the case-law of the Court.

146. Starting from the premiss, recognised by the Court in its interpretation of Article 49 EC ( ) and referred to in the 12th recital in the preamble to Directive 96/71, that Community law does not prevent Member States from extending the scope of their legislation or collective employment agreements concluded by both sides of industry to any person who is employed, even temporarily, although his employer is established in another Member State, Directive 96/71 seeks, by means of Article 3 thereof, to lay down the mandatory minimum protection rules for workers which must be respected by foreign service providers that post workers to the host Member State and which, therefore, may not be inimical to the freedom to provide cross-border services.

147. However, by virtue of its ‘minimalist’ character, Directive 96/71 does not exhaust the application of Article 49 EC. ( )

148. In short, the answer to the question raised in point 144 above depends, in my view, essentially on the outcome of the analysis to be made on the basis of Directive 96/71.

149. A measure that is incompatible with Directive 96/71 will, a fortiori, be contrary to Article 49 EC, because that directive is intended, within its specific scope, to implement the terms of that article. ( )

150. On the other hand, to hold that a measure conforms with Directive 96/71 does not necessarily mean that it meets the requirements of Article 49 EC, as interpreted by the Court.

151. In particular, although Directive 96/71 accepts that the Member States may apply to a service provider of a Member State that posts workers temporarily to the territory of another Member State terms and conditions of employment that are more favourable for the workers than those referred to in particular in Article 3(1) of Directive 96/71, the granting of that option must nevertheless respect the freedom to provide services guaranteed by Article 49 EC. ( )

152. Similarly, the Court has taken the view that, by virtue of a combined reading of Articles 3(1) and 5 of Directive 96/71, the Member States must ensure, in particular, that posted workers have available to them adequate procedures to ensure that they receive the minimum wage, which implies that the discretion granted to the Member States by Article 5 should be exercised in conformity with the freedom to provide services guaranteed by the Treaty. ( )

153. Since, as will be explained in greater detail in points 194 to 217 of this Opinion, certain aspects of the problem raised by the national court fall outside the scope of Directive 96/71 or are tolerated by it, I consider that the questions should also be examined in the light of Article 49 EC.

154. For the sake of completeness, I do not consider that assessment to be undermined by the argument put forward by the defendants in the main proceedings to the effect that Laval cannot invoke Article 49 EC directly against them, if only because of the obligation, referred to above, attaching to the national court to interpret domestic law in conformity, as far as possible, with Community law.

155. But I also consider, in line with the detailed submissions of Laval, the Estonian Government and the EFTA Surveillance Authority, that Article 49 EC is capable of being directly applied in the present case.

156. In that connection, it must be emphasised that the Court has recognised on several occasions that compliance with the prohibition of discrimination laid down in Article 49 EC applies not only to public authorities, but also to rules of a non-public nature which are intended to regulate, collectively, the work of self-employed persons and the provision of services. According to the case-law, the abolition as between Member States of obstacles to the free movement of services would be compromised if the abolition of barriers of national origin could be neutralised by obstacles resulting from the exercise of their legal autonomy by associations or bodies which do not come under public law. ( )

157. The Court also justifies that approach on the ground that working conditions in the different Member States are governed sometimes by means of provisions laid down by law or regulation and sometimes by agreements and other acts concluded or adopted by private persons. To limit the prohibition of discrimination to acts of a public authority would risk creating inequality in their application. ( )

158. I willingly accept that the present case differs from the situations at issue in the judgments in which the Court has so far held that Article 49 EC was applicable to private persons. In those cases, it was the legality of the regulations and other rules drawn up by the entities in question that was examined. By contrast, in the present case it is the exercise by the trade unions of their right to resort to collective action against a foreign service provider, in order to compel it to sign a Swedish collective agreement that is at issue.

159. However, that difference is important, in my view, only in determining whether the collective action at issue constitutes an obstacle to the freedom to provide services. It has no bearing on the question whether trade unions are in principle obliged to comply with the prohibitions laid down in Article 49 EC. It must also be borne in mind that, for the purpose of determining the terms and conditions of employment in the Member States, the Court considers that the principle of non-discrimination implemented by Article 49 EC applies to private persons as regards the drawing-up of (collective) agreements and the conclusion or the adoption of other acts. ( )

160. In this case, as has already been pointed out, the Swedish model of collective employment relations grants considerable autonomy to both sides of industry, guided by the principle that such parties are responsible for and regulate their own conduct. ( ) Trade unions enjoy in particular wide powers enabling them to extend the scope of collective agreements adopted in Sweden to employers not affiliated to an employers’ organisation that is a signatory thereto in that Member State, including the power to take collective action if necessary. Those powers and the exercise of them thus have a collective effect on the Swedish employment market. Recourse to collective action ultimately represents a manifestation of the exercise by trade unions of their legal autonomy with the aim of regulating the provision of services, within the meaning of the case-law referred to above.

161. Article 49 EC is therefore, in my opinion, capable of direct application in the case before the national court.

162. It follows from these general observations that, by its two questions, which can in my opinion be considered together, the national court seeks essentially to ascertain whether, in circumstances where a Member State has no system for declaring collective agreements to be of universal application, Directive 96/71 and Article 49 EC must be interpreted as preventing trade unions of a Member State from taking, in accordance with the domestic law of that State, collective action designed to compel a service provider of another Member State to subscribe, by means of a tie-in agreement, to a collective agreement for the benefit of workers posted temporarily by that provider to the territory of the first Member State, including cases where that provider is already bound by a collective agreement entered into in the Member State where it is established.

163. As stated earlier, this question must first of all prompt us to consider whether recourse to such collective action is based on a correct implementation of Directive 96/71 in Swedish domestic law. If the answer is affirmative, it will then be necessary to analyse it in the light of Article 49 EC.

2. The interpretation of Directive 96/71 and its implementation in Sweden

164. As I have already pointed out, it is common ground that, in implementing Directive 96/71 in domestic law, the Swedish legislature, following the tradition prevailing in Swedish collective employment relations and in the absence of a declaration of universal application of collective agreements, allowed both sides of industry to determine the principal terms and conditions of employment laid down in collective agreements, including those relating to pay, in Sweden.

165. According to the Swedish Government, Directive 96/71 does not require the Member States to include a minimum rate of pay in their legislation. In the Swedish Government’s view, Directive 96/71 enables the Member States to grant to workers temporarily posted to the territory of one of them protection greater than that provided for in that instrument. Workers temporarily posted to the territory of another Member State in the context of the provision of cross-border services must therefore be able, in the Swedish Government’s opinion, to enjoy the conditions concerning pay laid down or referred to in the collective agreements in that Member State.

166. It is precisely the mechanisms and the procedures that are available to both sides of industry and are guaranteed by law, in particular the right to resort to collective action, which, in the Swedish Government’s opinion, ensure compliance with the terms and conditions of employment laid down by the collective agreements. Accordingly, those mechanisms and those procedures facilitate attainment of the objective referred to in Article 3(1) of Directive 96/71 which, moreover, is without prejudice to the right to take collective action. The Swedish Government adds that there was absolutely no need for the Kingdom of Sweden to avail itself of the second subparagraph of Article 3(8) of that directive because that provision merely grants an option to Member States that have no system for declaring collective agreements to be universally applicable. In those circumstances, the method adopted by the Kingdom of Sweden to transpose Directive 96/71 into domestic law meets the objectives of the directive.

167. The Austrian, Danish, Finnish, French, Icelandic and Norwegian Governments support essentially the same conclusion.

168. Whilst following the same general line of reasoning, the German and Spanish Governments, Ireland and the Commission add, essentially, that the terms and conditions of employment laid down in the collective agreements must either relate to the matters listed in Article 3(1) of Directive 96/71 or be covered by public policy provisions, within the meaning of Article 3(10).

169. For their part, Laval and the Estonian, Latvian, Lithuanian, Polish and Czech Governments are of the opinion that the Kingdom of Sweden transposed Directive 96/71 incorrectly. First, those parties consider, having regard to a communication of 25 July 2003 adopted by the Commission, ( ) that the Kingdom of Sweden, not having availed itself of the second subparagraph of Article 3(8) of Directive 96/71, waived the right to apply to workers posted temporarily to its territory by a foreign service provider the terms and conditions of employment laid down in collective agreements. They also consider that the Swedish method does not ensure equal treatment between service providers and domestic undertakings and is a clear source of legal uncertainty in that, in particular, the service providers are not apprised of all the terms and conditions of employment, in particular those concerning pay, which will apply to them when they temporarily post workers to that Member State. Finally, they consider that the Swedish legislation allows foreign service providers to be made subject to terms and conditions of employment, laid down in collective agreements, which do not correspond to the list in Article 3(1) of Directive 96/71 or to the limits laid down in Article 3(10) of that directive.

170. For my part, I tend to share the view put forward by the German and Spanish Governments, Ireland and the Commission.

171. As already stated, Article 3 of Directive 96/71 has a twofold aim of providing minimum protection for posted workers and equal treatment as between service providers and domestic undertakings in similar circumstances. Those two requirements must be pursued concurrently.

172. As regards the first aim, Article 3 of Directive 96/71 requires Member States to ensure that workers posted temporarily to their territory are guaranteed a minimum level of terms and conditions of employment in relation to the matters listed in Article 3(1), including minimum rates of pay, at the same time authorising them, first, to apply terms and conditions of employment which are more favourable to workers, in accordance with Article 3(7), and, second, to impose terms and conditions of employment in relation to matters other than those referred to in Article 3(1), in so far as public policy provisions are involved.

173. In order to ensure equal treatment as between service providers that post workers abroad temporarily and domestic undertakings, Article 3(1) of Directive 96/71 provides that the guarantees given to such workers are to be laid down by law, regulation or administrative action and/or, in the building sector, by collective agreements or arbitration awards that have been declared universally applicable within the meaning of the first subparagraph of Article 3(8), namely that they are ‘observed by all undertakings in the geographical area and in the profession or industry concerned’. ( )

174. It is apparent from the second and third subparagraphs of Article 3(8) of Directive 96/71 that, in the absence of a system for declaring collective agreements to be universally applicable, the Member State to whose territory workers are posted may, if it so decides, take as a basis collective agreements which are generally applicable to all similar undertakings or are concluded by the most representative organisations of both sides of industry and are applied throughout national territory, provided that the Member State ensures equal treatment between service providers that post such workers to its territory and domestic undertakings in a similar position, that is to say, in particular, that those undertakings have the same obligations imposed on them and the effects thereof are the same.

175. It may be legitimately inferred from that provision that the Community legislature sought to avoid a situation in which collective agreements that were not legally binding in the building sector in a host Member State were imposed on foreign service providers, whilst a great majority of domestic employers would, in practice, not be covered by them.

176. Moreover, I should point out that, by virtue of Article 5 of Directive 96/71, the Member States must ensure in particular that adequate procedures are available to workers and/or their representatives for the enforcement of the obligations imposed by the directive.

177. That provision must, in my view, be read in the light both of the final part of the 12th recital in the preamble to Directive 96/71, which states, in harmony with the case-law of the Court of Justice on Article 49 EC, ( ) that ‘Community law does not forbid Member States to guarantee the observance of [rules for the protection of workers] by the appropriate means’, and of the 22nd recital which, it will be remembered, states that Directive 96/71 is ‘without prejudice to the law of the Member States concerning collective action to defend the interests of trades and professions’.

178. A combined reading of those provisions prompts me to set out the following considerations.

179. In the first place, I do not think that, in the absence of a system for declaring collective agreements to be of universal application, the Kingdom of Sweden is obliged to have recourse to the option provided for in the second subparagraph of Article 3(8) of Directive 96/71. That option, as the wording of that provision indicates, is merely a possibility offered to Member States that have no system for declaring collective agreements to be of universal application.

180. The fact that the Kingdom of Sweden leaves it to both sides of industry to determine the terms and conditions of employment, in particular rules on pay, by means of collective agreements cannot in itself constitute inadequate implementation of Directive 96/71, to such an extent that Sweden waived the right to apply those terms and conditions to foreign service providers.

181. In general, it will be remembered that the Court has held that Member States may leave the implementation of the objectives pursued by Community directives to both sides of industry through collective agreements. ( )

182. Admittedly, it has also been held that, in such situations, the Member State is still responsible for fulfilling its obligation to ensure that directives are fully implemented by adopting all such provisions as may be appropriate. ( )

183. In the present case, I do not believe, in the first place, that the Kingdom of Sweden failed in its obligation to ensure that workers posted to its territory enjoy the terms and conditions of employment concerning the matters listed in Article 3(1) of Directive 96/71.

184. Whilst the Kingdom of Sweden directly imposes compliance with the terms and conditions of employment relating to the matters listed in Article 3(1)(a) and (b) and (d) to (g) of Directive 96/71 through national legislation, it is by its acceptance of the right of trade unions to take collective action that it ensures that those unions may ultimately impose the wage conditions laid down or provided for by collective agreements, if a foreign service provider does not voluntarily subscribe to those conditions.

185. Although, as the referring court observes, such recognition is not expressly apparent from the Swedish Law on the posting of workers, it derives, on the other hand, implicitly but necessarily from the MBL, which provides that collective action designed to compel a foreign employer to conclude a collective agreement which is effective in Sweden may be taken where that provider is bound by a collective agreement in its State of origin. A fortiori, that legislation applies to every service provider of a Member State which is not bound by any collective agreement concluded in that State. Ultimately, therefore, it guarantees trade unions the opportunity to impose, through recourse to collective action, the wage conditions laid down or governed by Swedish collective agreements on any foreign service provider who does not voluntarily subscribe to those conditions, with the aim of guaranteeing to workers temporarily posted to Sweden the benefit of the wage conditions applicable to Swedish workers in the sector in question.

186. I would add that Paragraph 9 of the Swedish Law on the posting of workers, in so far as it provides that the liaison office is to inform foreign service providers of the applicability of collective agreements in the sector and refer those providers for further information to the trade unions, also means that it was not the intention of the Kingdom of Sweden to decline to ensure that workers temporarily posted to its territory should be guaranteed the wage conditions applicable under collective agreements concluded in Sweden.

187. It is therefore beyond doubt, in my view, that the right to take collective action granted by Swedish law to trade unions to enable them to impose the wage conditions laid down or governed by Swedish collective agreements provides a suitable means of attaining the aim of protecting posted workers laid down in Article 3 of Directive 96/71.

188. Second, the problem remains of the implementation of the second objective pursued by Article 3 of Directive 96/71, namely that of ensuring equal treatment between foreign service providers and domestic undertakings.

189. This examination may be limited to the building sector. First, the obligation on host Member States, under Article 3(1) of Directive 96/71, to ensure compliance with the terms and conditions of employment relating to the matters listed in that provision, provided for in collective agreements in their territory, extends only to that sector and, second, it is common ground that, in the present case, Laval posted Latvian workers employed in that sector to Sweden.

190. First of all, it must be borne in mind, as pointed out by the national court, that it is precisely in order to ensure equal treatment with domestic undertakings that the Swedish legislature considered that it could not require foreign service providers to observe automatically, possibly by means of a declaration of universal application or in accordance with the procedure envisaged in the second subparagraph of Article 3(8) of Directive 96/71, the terms and conditions of employment laid down or governed by collective agreements, since domestic employers are not subject to any such automatic procedure.

191. Next, it is apparent from the information provided by the Swedish Government in its answers to the written questions put to it by the Court that, first, there are around 9 800 undertakings in Sweden with more than three employees, whereas around 11 200 undertakings – and that figure thus includes undertakings employing fewer than three employees – are bound by collective agreements in the building sector. Second, the Swedish Government has also confirmed that Swedish employers not affiliated to an employers’ organisation may be compelled, by collective action by trade unions, to subscribe to an agreement of that kind by signing a tie-in agreement. Furthermore, it is clear from the general principles of Swedish employment law that emplo