Reference for a preliminary ruling from the Court of Appeal (Civil Division) (England and Wales), by Order of that court of 23 November 2005 in 1) The International Transport Workers' Federation 2) The Finnish Seamen's Union v 1) Viking Line ABP 2) OU Viking Line Eesti

(Case C-438/05)

(Language of the case: English)

Reference has been made to the Court of Justice of the European Communities by Order of the Court of Appeal (Civil Division) (England and Wales) of 23 November 2005, received at the Court Registry on 6 December 2005, for a preliminary ruling in the proceedings between 1) The International Transport Workers' Federation 2) The Finnish Seamen's Union and 1) Viking Line ABP 2) OU Viking Line Eesti, on the following questions:

Scope of the free movement provisions

1)    Where a trade union or association of trade unions takes collective action against a private undertaking so as to require that undertaking to enter into a collective bargaining agreement with a trade union in a particular Member State which has the effect of making it pointless for that undertaking to re-flag a vessel in another Member State, does that action fall outside the scope of Article 43 of the EC Treaty and/or Regulation 4055/86¹ by virtue of the EC's social policy including, inter alia, Title XI of the EC Treaty and, in particular, by analogy with the Court's reasoning in Case C-67/96 Albany [1996] ECR I- 5751, paras 52-64?

Horizontal direct effect

2)    Do Article 43 of the EC Treaty and/or Regulation 4055/86 have horizontal direct effect so as to confer rights on a private undertaking which may be relied on against another private party and, in particular, a trade union or association of trade unions in respect of collective action by that union or association of unions?

Existence of restrictions on free movement

3)    Where a trade union or association of trade unions takes collective action against a private undertaking so as to require that undertaking to enter into a collective bargaining agreement with a trade union in a particular Member State, which has the effect of making it pointless for that undertaking to re-flag a vessel in another Member State, does that action constitute a restriction for the purposes of Article 43 of the EC Treaty and/or Regulation 4055/86?

4)    Is a policy of an association of trade unions which provides that vessels should be flagged in the registry of the country in which the beneficial ownership and control of the vessel is situated so that the trade unions in the country of beneficial ownership of a vessel have the right to conclude collective bargaining agreements in respect of that vessel, a directly discriminatory, indirectly discriminatory or non-discriminatory restriction under Article 43 of the EC Treaty or Regulation 4055/86?

5)    In determining whether collective action by a trade union or association of trade unions is a directly discriminatory, indirectly discriminatory or non-discriminatory restriction under Article 43 of the EC Treaty or Regulation 4055/86, is the subjective intention of the union taking the action relevant or must the national court determine the issue solely by reference to the objective effects of that action?

Establishment/ Services

6)    Where a parent company is established in Member State A and intends to undertake an act of establishment by reflagging a vessel to Member State B to be operated by an existing wholly owned subsidiary in Member State B which is subject to the direction and control of the parent company:

a)    is threatened or actual collective action by a trade union or association of trade unions which would seek to render the above a pointless exercise capable of constituting a restriction on the parent company's right of establishment under Article 43, and

b)    after reflagging of the vessel, is the subsidiary entitled to rely on Regulation 4055/86 in respect of the provision of services by it from Member State B to Member State A?

Justification

    Direct discrimination

7)    If collective action by a trade union or association of trade unions is a directly discriminatory restriction under Article 43 of the EC Treaty or Regulation 4055/86, can it, in principle, be justified on the basis of the public policy exception set out in Article 46 of the EC Treaty on the basis that:

a)    the taking of collective action (including strike action) is a fundamental right protected by Community law; and/or

b)    the protection of workers?

    ITF policy: objective justification

8)    Does the application of a policy of an association of trade unions which provides that vessels should be flagged in the registry of the country in which the beneficial ownership and control of the vessel is situated so that the trade unions in the country of beneficial ownership of a vessel have the right to conclude collective bargaining agreements in respect of that vessel, strike a fair balance between the fundamental social right to take collective action and the freedom to establish and provide services, and is it objectively justified, appropriate, proportionate and in conformity with the principle of mutual recognition?

FSU's actions: objective justification

9)    Where:

a parent company in Member State A owns a vessel flagged in Member State A and provides ferry services between Member State A and Member State B using that vessel;

the parent company wishes to re-flag the vessel to Member State B to apply terms and conditions of employment which are lower than in Member State A;

the parent company in Member State A wholly owns a subsidiary in Member State B and that subsidiary is subject to its direction and control;

it is intended that the subsidiary will operate the vessel once it has been re-flagged in Member State B with a crew recruited in Member State B covered by a collective bargaining agreement negotiated with an ITF affiliated trade union in Member State B;

the vessel will remain beneficially owned by the parent company and be bareboat chartered to the subsidiary;

the vessel will continue to provide ferry services between Member State A and Member State B on a daily basis;

a trade union established in Member State A takes collective action so as to require the parent and/or subsidiary to enter into a collective bargaining agreement with it which will apply terms and conditions acceptable to the union in Member State A to the crew of the vessel even after reflagging and which has the effect of making it pointless for the parent to re-flag the vessel to Member State B,

does that collective action strike a fair balance between the fundamental social right to take collective action and the freedom to establish and provide services and is it objectively justified, appropriate, proportionate and in conformity with the principle of mutual recognition?

10)    Would it make any difference to the answer to 9) if the parent company provided an undertaking to a court on behalf of itself and all the companies within the same group that they will not by reason of the reflagging terminate the employment of any person employed by them (which undertaking did not require the renewal of short term employment contracts or prevent the redeployment of any employee on equivalent terms and conditions)?

____________

¹ - Council Regulation (EEC) no 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries