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Euro court case ruling will affed flagging across EU
Page 12
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The European Court of Justice is to decide whether to allow firms to flag out to countries where costs are lower. David Harris reports.
A EUROPEAN COURT of Justice (ECJ) case turning on the right of companies to move to other EU countries where labour is cheaper could have major consequences for UK haulage.
The Finnish shipping company Viking Line runs a ferry between Helsinki and the Estonian capital, Tallinn. Viking wants to re-flag the vessel in Estonia so it can employ cheaper Estonian sailors.
Finnish unions oppose the move. They have threatened industrial action and approached the Estonian sailors' union to stop Viking recruiting in Estonia.
The problem for the ECJ is that the EU supports the right of EU-based companies to set up businesses in any member country — but also supports the right of unions to oppose such action. The court will have to decide on the relative merits of these two rights.
Ruling in favour of Vi king would give fresh impetus to international hauliers who want to cut costs by switching their operating bases to EU states with lower wages.
A spokesman for the ECJ confirms that its decision will apply to all EU businesses.
The case raises the issue of flagging out vehicles; this caused problems that came to a head in 2001 when the UK's Transport Tribunal ruled that any foreignregistered vehicle running on a UK 0-licence must comply in every respect with British law, including paying vehicle excise duty.
The ECJ has just completed its consideration of the Viking case and is now awaiting a recommendation from its Advocate General.
The court is also considering the case of a Latvian construction company which won a contract in Sweden and wanted to employ Latvian workers on Latvian wages; once again, unions have objected.
A decision on both cases is expected within four months.