Case C-341/05 Laval [2007] ECR I-11767

Key point

This case showed the ECJ’s preference towards protecting economic freedoms (in this case the free movement of services) over non-economic or social fundamental rights (in this case the right to collection action)

Laval hired Latvian construction workers to carry out a government contract in Sweden
Laval refused to sign a collective agreement with Swedish unions guaranteeing a certain level of pay for workers, as a result, the unions blockaded the work site
Laval argued that its right to free movement of services under Article 56 TFEU had been breached

Laval’s right to free movement of services under Article 56 TFEU had been breached and the workers’ right to collective action did not justify the breach

‘the right to take collective action for the protection of the workers of the host State against possible social dumping may constitute an overriding reason of public interest within the meaning of the case‑law of the Court which, in principle, justifies a restriction of one of the fundamental freedoms guaranteed by the Treaty’: [103]
But in this case, collective action cannot be justified in light of the public interest objective as the collection action seeks to compel Laval to to enter into negotiations on pay but national law is unclear as to what the undertaking’s obligations are in relation collective bargaining over minimum pay: [110]

Social dumping refers to the hiring of migrant workers with lower pay conditions than that normally offered to local workers
In this case, the Court chose not to remit the balancing of the competing rights to the national court, unlike in Viking Line, thus denying Sweden its margin of appreciation in which it would have discretion to strike the balance between economic and social rights
This ruling has been strongly criticised for its lack of respect for national autonomy and fundamental rights, which were sacrificed to achieve a pro-internal market result