## Facts

- Viking Line ABP operated the ferry *Rosella* between Finland and Estonia and sought to reflag the vessel from Finland to Estonia to employ an Estonian crew under lower-cost labor conditions.
- The International Transport Workers’ Federation (ITWF) opposed “flags of convenience” and urged affiliated unions not to negotiate with Viking and to support action hindering Viking’s operations.
- The Finnish Seamen’s Union (FSU), affiliated with the ITWF, threatened strike and other collective action unless Finnish labor standards for the crew were maintained after reflagging.
- Viking sued the ITWF and FSU in the courts of England and Wales for injunctive relief, alleging the unions’ conduct deterred reflagging and violated Viking’s EU freedom of establishment.
- The High Court initially granted an injunction; the Court of Appeal set it aside on discretionary grounds and referred questions to the European Court of Justice (ECJ) for a preliminary ruling.

## Issues

1. Whether trade-union collective action intended to deter reflagging to another Member State falls within, and may restrict, freedom of establishment under then-Article 43 EC (now Article 49 TFEU).
2. Whether a private undertaking may invoke freedom of establishment against trade unions (horizontal application via national courts).
3. Whether restricting freedom of establishment through collective action can be justified by the fundamental right to take collective action (including striking), and what proportionality constraints apply.

## Decision

- The ECJ held that collective trade-union action designed to induce an undertaking to accept terms that deter establishment in another Member State can fall within Article 43 EC and constitute a restriction.
- The ECJ held that freedom of establishment may be relied upon against trade unions because national courts must ensure private organizations do not seriously impair Treaty free-movement rights.
- The ECJ recognized the right to take collective action, including the right to strike, as a fundamental right under EU law, but not absolute.
- The ECJ held that a restriction may be justified if it pursues a legitimate objective compatible with the Treaty (including worker protection) and satisfies proportionality (suitability and necessity).
- The ECJ remitted application of the justification and proportionality analysis to the national court.

## Legal Principles

- Measures by trade unions that make cross-border establishment less attractive or impossible can be “restrictions” on freedom of establishment.
- EU free-movement protections can apply in disputes between private parties where national courts are asked to grant or withhold relief affecting Treaty freedoms.
- The fundamental right to collective action, including striking, is part of EU general principles, but it must be reconciled with Treaty economic freedoms.
- Worker protection (jobs and working conditions) can justify restricting freedom of establishment only if the action genuinely serves that aim and does not exceed what is necessary.
- Proportionality requires inquiry into whether workers’ interests were actually at risk and whether less restrictive means could have achieved adequate protection.

## Conclusion

The ECJ ruled that union collective action aimed at deterring reflagging may restrict EU freedom of establishment and may be challenged by a private undertaking, but such action can be lawful if it pursues worker protection and meets a strict proportionality test, to be applied by the national court.


Int’l Transp. Workers’ Fed’n v. Viking Line ABP, Case C-438/05 (ECJ 2007)