When the EU welcomed in 10 new countries in 2004, many still rebounding from years of Soviet rule behind the Iron Curtain, it unknowingly set two different labor markets on a crash course toward conflict. In the West are established unions that demand high wages through collective bargaining agreements. In the East are workers--some organized, some not--who are willing to provide services for a fraction of the wages their Western counterparts demand.
To save money, companies began to migrate facilities to the Eastern member states and import cheaper labor from these regions. This angered the unions, which tried to stop
However, the AG did comment that the sweeping actions of the ITF were likely too extreme, thus potentially handing a significant win to companies. If the ECJ decides to follow the AG's reasoning, it's likely union organizations such as ITF won't be able to force union workers to join in a collective action to prevent companies from establishing elsewhere in the EU.
"What's meaningful about this opinion is the AGs seem to be saying that when an obstacle is raised by coordinated union action, which ITF employed, and it has the effect of restricting the freedom of establishment, there is a strong possibility that such actions are susceptible to abuse," Garofalo says.
"This is still an area where competing rights need to be reconciled, and there will continue to be some development in the law that will help employers understand what collective action will be permissible and what will run afoul of economic freedoms in the EU," Garfalo says.
But for now, companies operating throughout Europe can feel somewhat assured they'll be freer to conduct business thanks to certain limitations the courts will impose on unions.