## Facts

- Viking Line, a Finnish maritime transport company, sought to reflag one of its vessels from Finland to Estonia to benefit from lower labor costs.
- The International Transport Workers' Federation (ITF) and the Finnish Seamen's Union (FSU) initiated or threatened industrial action to prevent reflagging.
- The unions’ collective action aimed to compel Viking Line to maintain existing working conditions via collective agreements, thereby obstructing the company’s freedom of establishment.

## Issues

1. Whether collective action by trade unions, such as strikes intended to prevent reflagging for lower labor costs, constitutes a justifiable restriction on a company’s freedom of establishment under EU law.
2. What criteria determine if such restrictions, undertaken for the protection of workers’ terms and conditions, are justified and proportionate.

## Decision

- The ECJ held that collective action by trade unions is an exercise of a fundamental right, but this right is not absolute.
- Actions restricting a company’s freedom of establishment cannot be justified unless they pursue a legitimate aim, such as the protection of workers’ conditions, and are proportionate.
- Safeguarding workers’ terms and conditions may constitute a legitimate interest for unions, but any collective action must not go beyond what is necessary for this goal.
- The legitimacy of the unions’ aims and the proportionality of their actions depend on the specific measures taken and whether less restrictive means could have achieved the objectives.
- The decision established a balancing test between the fundamental right to collective action and the freedom of establishment.

## Legal Principles

- Collective action is recognized as a fundamental right but must be balanced with other fundamental freedoms under EU law.
- Any restriction on the freedom of establishment must be justified by overriding reasons of public interest, such as worker protection.
- The proportionality principle requires that collective actions are suitable for achieving their aim and do not exceed what is necessary.
- Justification and proportionality must be assessed on a case-by-case basis, considering the nature and impact of the action.

## Conclusion

The Viking Line judgment clarified how trade union collective actions may lawfully limit companies’ right of establishment within the EU, requiring such restrictions to be justified by legitimate aims and meet the standard of proportionality. The case set a significant precedent for balancing fundamental economic freedoms and social rights in the EU single market.

Viking Line ABP v International Transport Workers' Federation and Finnish Seamen's Union (Case C-438/05) [2007] ECR I-10779