Swedish court rules against Latvian company accused of wage dumping

A Swedish court ruled on Wednesday that union actions against a Latvian construction group accused of wage dumping in the Scandinavian country had been permissible.

Latvian construction company Laval un Partneri, which has been accused of paying its workers in Sweden far less than their local counterparts, had requested that the Labor Court here find a month-long union blockade of three of its Swedish building sites illegal.

The court however ruled that "actions like this aimed at pushing through an add-on to the leading collective agreement within the industry, can not be seen as going against good labor market practices".

Byggnads, which has claimed that some of the Latvian workers make only 35 kronor (5.2 dollars, 3.9 euros) an hour -- a far cry from the 138 to 145 kronor hourly wage insisted upon in industry collective agreements -- said the ruling had been expected.

"For us it has been obvious the whole time that Swedish rules and laws should apply for everyone in the Swedish labor market, regardless of what country they come from," Byggnads chairman Hans Tilly told Swedish news agency

Laval un Partneri meanwhile had argued that its wages were in accordance with collective agreements in Latvia, where it has its headquarters, and claimed that the Swedish unions were hindering competition.

It also pointed out that its 14 workers in Sweden are paid twice as much in the Scandinavian country as in Latvia and that their housing and meals are paid for.

"The Labor Court's decision today clarifies that the Latvian agreement will not block us from continuing our actions aimed at getting Laval Un Partneri to sign a Swedish collective agreement," Tilly said.

The issue is seen in Sweden as a direct consequence of European Union enlargement, amid fears of an influx of cheaper labor from eastern European countries, including Latvia, that joined the bloc in May.

Prior to the EU's expansion, Swedish Prime Minister Goeran Persson had tried to introduce temporary restrictions on job opportunities for nationals of the new EU member countries, as a number of other countries did, but the Swedish parliament rejected the idea.

Wednesday's ruling was not expected to end the conflict, as the Latvian government last Friday submitted an official complaint to the EU Commission in a bid to defend the right of free movement of workers within the EU and free competition.