9.01  The Commission Proposal and the accompanying explanatory memorandum did not contain any provision for, or mention of, non-contractual obligations relating to industrial action. The addition of the special rule in Art 9 of the Rome II Regulation resulted from an initiative of the Swedish Government, with the support of the European Parliament. Its introduction, however, was strongly opposed by some Member State delegations and it was the only provision of the Council’s Common Position that did not command the unanimous support of all Member States.

9.02  In its initial response to the Commission Proposal, the Swedish delegation proposed that non-contractual obligations arising out of industrial action (p. 472) should be governed by the law of the place where the action had been taken.¹ The Swedish proposal linked the perceived necessity for such a rule to the decision of the Court of Justice in the DFDS Torline case,² delivered in February 2004. In that case, DFDS, a Danish shipping company, had brought an action against a Swedish trade union in the Danish courts seeking to determine the lawfulness of threatened industrial action, consisting of the blacking of its ship by Swedish port workers preventing her from being unloaded in Swedish ports. To avoid that action, DFDS chartered another ship to operate between Gothenburg and Harwich, England. It sought, by separate Danish proceedings,³ to recover from the trade union the costs of the charter. The ECJ held that both the lawfulness and damages actions fell within Art 5(3) of the Brussels Convention (matters relating to tort, delict, or quasi-delict).⁴ The ECJ also held that, although the event giving rise to damage (notification of the industrial action) had occurred in Sweden, the damage consisted of DFDS’ financial loss arising from the withdrawal of its ship from the Gothenburg-Harwich route and its replacement with another ship, leaving it to the Danish court to determine whether that loss could be regarded as having arisen in Denmark, taking into account (among other factors) the fact that Denmark was the flag State of the withdrawn ship.⁵ Having summarized the facts of the case and the Court’s ruling, the Swedish delegation commented:⁶

Since the wording of Article 3 of the proposed Rome II Regulation is very similar [to Art 5(3) of the Brussels Convention], the consequence of this case is that the legality of an industrial action, carried out in order to secure that the working conditions in the state in which the work is to be performed, could be governed by another law.⁷

9.06  The Parliament’s proposed rule was, however, rejected by the Commission in its Amended Proposal on the ground that it was ‘too rigid’.¹²

9.07  In the meantime, the Swedish proposal had attracted only limited support in the Council’s Rome II Committee. Indeed, by early 2006, it had attracted the explicit support of only one other delegation.¹³ At this stage, Sweden re-presented its proposal, arguing:¹⁴

Industrial relations systems in different countries are often unique and protected by strong governmental interests. In this regard the situation differs significantly from other situations covered by Article 3.¹⁵ Each national system balances the interests of the parties in the market. If industrial action that is taken in one country in compliance with the national system there could lead to liability under the law of another country, the proper balance of the national systems would be disturbed.

(p. 474) 9.08  At the following meeting of the Council’s Rome II Committee, a number of delegations indicated that they could support the proposal,¹⁶ but other delegations remained opposed.¹⁷ Nevertheless, the rule, by now in its final form, was adopted by a majority of the Member States as an element in the Council’s Common Position.

9.11  Greece and Cyprus, although voting in favour of the Regulation, added:²¹

The Greek and Cypriot delegations would like to point out that the application of Article 9 of the Regulation would probably cause problems for shipping, given (p. 475) that vessels would be exposed to rules which varied according to the laws of the Member States of their ports of call, irrespective of whether those vessels were in full conformity with the laws of the flag State.

9.12  The topicality and political sensitivity of this issue is illustrated, and heightened, by two recent decisions of the ECJ, which have opened up the possibility of claims by employers against trade unions based on the restriction by industrial action of the fundamental freedoms guaranteed by the EC Treaty.²² Claims for this type would appear to fall within the scope of the Regulation²³ and may, therefore, justify the application of the special rule in Art 9 to determine the law applicable to matters not regulated by EC law, including as to the available remedy (subject to the principles of equivalence and effectiveness).²⁴

9.13  The first decision, in the case of International Transport Workers’ Federation v Viking Line ABP,²⁵ concerned the blacking of a ship operated by the claimant under the Finnish flag following its decision to re-flag the vessel by registering it in Estonia or Norway. The claimant sought and obtained an interim injunction from the High Court in England (where one of the defendant trade unions was based) on the ground that the threatened blacking action unlawfully restricted its freedom of establishment under EC Treaty, Art 43, as well as the free movement of workers and freedom to provide services under Arts 39 and 49 respectively.²⁶ On appeal by the trade unions, the Court of Appeal referred to the ECJ questions as to whether Arts 43 and 49 provided the employer with a remedy.

9.14  The ECJ answered those questions as follows:

1. 1. Article 43 EC is to be interpreted as meaning that, in principle, collective action initiated by a trade union or a group of trade unions against a private undertaking in order to induce that undertaking to enter into a collective agreement, the terms of which are liable to deter it from exercising freedom of establishment, is not excluded from the scope of that article.

2. 2. Article 43 EC is capable of conferring rights on a private undertaking which may be relied on against a trade union or an association of trade unions.

3. (p. 476) 3. Article 43 EC is to be interpreted to the effect that collective action such as that at issue in the main proceedings, which seeks to induce a private undertaking whose registered office is in a given Member State to enter into a collective work agreement with a trade union established in that State and to apply the terms set out in that agreement to the employees of a subsidiary of that undertaking established in another Member State, constitutes a restriction within the meaning of that article.

   That restriction may, in principle, be justified by an overriding reason of public interest, such as the protection of workers, provided that it is established that the restriction is suitable for ensuring the attainment of the legitimate objective pursued and does not go beyond what is necessary to achieve that objective.

9.16  The breadth of this action, including blockading the claimant’s sites and sympathy action by other unions is, to an English lawyer, startling.³¹ That comment is not intended as a criticism of the position of Swedish law, under which trade unions clearly play a more central role in the protection of workers’ rights than they do under English law. This disparity in the approaches and attitudes between Member States, however, goes a long way to explaining why the Swedish delegation in the Rome II Committee was so troubled by the DFDS Torline decision and the possibility that, without a special rule, a law other than Swedish law might apply to industrial action taken by Swedish trade unions for the protection of workers based in Sweden. These matters must also be borne in mind in considering the meaning of ‘industrial action’ within Art 9.

9.17  Art 9 applies only to non-contractual obligations.³² Accordingly, it does not apply (for example) to the enforcement of the contract between worker and employer or between a trade union and its members. The law applicable to contractual obligations such as these must be determined in accordance with the Rome I Regime.³³

(p. 478) 9.19  Accordingly, and as an exception to the general approach to interpretation of the concepts used in the Regulation, ‘industrial action’ is not to be given an autonomous meaning. Instead, it would appear that it must be understood in accordance with the law of the country in which the relevant action is to be, or has been, taken, i.e. the putative applicable law under Art 9. Application of the law of the forum to answer that question would not serve the objectives identified in Recital (27). In particular, it may lead to Art 9 being construed more narrowly or broadly than is necessary to protect workers carrying out industrial action in another country. As the Viking Line case³⁴ illustrates, proceedings in a case with an international dimension may be brought otherwise than before the courts of the country where the industrial action takes place. Application of any law other than the law identified by Art 9 to determine the breadth of the concept of ‘industrial action’ would reduce the parties’ ability to predict the law applicable to claims arising out of acts that might be argued to constitute industrial action.

9.20  Nevertheless, the outer limits of what may constitute ‘industrial action’ may still fall to be defined by reference to the terms of Art 9 and the accompanying Recitals. These suggest that, at a minimum, the action must in some sense be concerned with the relationship between workers and employers. Accordingly, action taken in protest at government policy (for example, a blockade of a port in protest at reductions in fish quotas or a motorway go-slow to raise awareness about fuel duties) falls outside Art 9.

9.21  Under the law of England and Wales (and Scotland), the principal statutory immunities from civil liability of trade unions and others in this area are defined in terms of whether the act in question is in contemplation or furtherance or of a trade dispute.³⁵ ‘Trade dispute’ is defined, for these purposes, as meaning a dispute between employers and workers which is related to one or more listed matters as follows:³⁶

1. (a)  terms and conditions of employment, or the physical conditions in which any workers are required to work;

2. (b)  engagement or non-engagement, or termination or suspension of employment or the duties of employment, of one or more workers;

3. (p. 479) (c)  allocation of work or the duties of employment between workers or groups of workers;

4. (d)  matters of discipline;

5. (e)  a worker’s membership or non-membership of a trade union;

6. (f)  facilities for officials of trade unions; and

7. (g)  machinery for negotiation or consultation, and other procedures, relating to any of the above matters, including the recognition by employers or employers’ associations of the right of a trade union to represent workers in such negotiation or consultation or in the carrying out of such procedures.

9.23  In terms of the employer’s conduct, the concept of ‘industrial action’ under English law may include a lockout,⁴² although civil liability issues arising from the employer’s action will normally involve contractual obligations between employer and employee, falling outside the scope of the Rome II Regulation.

9.24  Art 9 is restricted to liability of persons ‘in the capacity of a worker or an employer’ or of the organizations representing their personal interests. As to the concept of liability ‘in the capacity of a worker’ this would appear capable, for example, of extending to former employees and to those employed by others who participate in secondary action, whether lawful or otherwise, but not to third parties (including, for example, relatives or friends of workers or interest groups) who may become involved.

9.25  As to the concept of liability in the capacity of an employer, it is submitted that this should extend to the liability of those representing the employer in a trade dispute (including, for example, senior management). Equally, the reference to the organizations protecting the interests of workers and employers should extend to officials representing these organizations. Otherwise, the protection that Art 9 affords to workers, employers and representative organizations may easily be circumvented by suing an individual responsible for implementing particular action.

9.26  The reference in Recital (27) to ‘the rights and obligations of workers and employers’ might be thought to suggest an element of mutuality that restricts the scope of Art 9 to claims arising between the categories of persons referred to, i.e. workers, employers, and representative organizations, and excludes claims brought by third parties. For example, what law should apply to a claim against a trade union responsible for blockading a port in an employment dispute with the port owner brought by the owner of cargo that deteriorated in another country as a result of delays due to the blockade? This appears to be an open question. As noted above,⁴³ the Commission in its response to the Council’s Common Position expressed concerns as to the lack of clarity regarding the position of third parties. (p. 481) Although the Commission’s view would appear to have been that Art 9 should not extend to liability otherwise than between the named parties, the objectives of foreseeability as to the law applicable⁴⁴ and the protection of the rights (and obligations) of workers under the law of the place of the industrial action may appear to point towards the application of Art 9, rather than the general rule in Art 4 in such cases. Whichever view is preferred, this may be one of the occasions on which it is not possible to strike a reasonable balance under the Regulation between the interests of the person claimed to be liable and the person who has sustained damage.⁴⁵

9.27  Art 9 refers to liability ‘for damages caused by an industrial action’. The choice of the plural ‘damages’, which appears also in other language versions of Art 9 of the Regulation,⁴⁶ may be contrasted with the use of the singular form ‘damage’ elsewhere in the Regulation, in particular in Art 4. Nevertheless, it is clear that Art 9 is not to be read as being restricted to an action for a monetary remedy corresponding to an award of ‘damages’. In particular, (1) Art 9 contemplates a non-contractual obligation arising from industrial action that is ‘pending’ and ‘is to be’ taken in the future, which seems consistent only with a claim for injunctive or declaratory relief, (2) the DFDS Torline case, which prompted the original proposal by the Swedish delegation,⁴⁷ concerned monetary and non-monetary claims, and (3) the terminology used in other language versions (for example, in the French version, ‘dommages‎’ rather than ‘dommages-intérêts‎’ and, in the German version, ‘Schäden‎’ rather than ‘Schadensersatz‎’) suggests that what is contemplated is not a specific kind of remedy but separate elements of damage resulting from the same action. Although use of the plural in an EC legislative instrument should be taken to include the singular,⁴⁸ it would have been equally appropriate having regard to the concept of ‘damage’ as defined in Art 2 of the Regulation to refer in Art 9 to ‘damage caused by an industrial action’, avoiding the uncertainty resulting from the use of the plural form.

(p. 482) 9.28  Art 9 requires a causal link between the industrial action and the damage suffered by the claimant. During discussions in the Council’s Rome II Committee, the French delegation presented a proposal to restrict, by a recital, the scope of the special rule to questions of ‘remedy and compensation for direct economic damage caused or likely to be caused’ by industrial action, so as to exclude ‘peripheral situations (violence committed during a strike, attacks on property etc)’.⁴⁹ That proposal was not adopted, but a similar result can almost certainly be achieved by both a literal and a purposive construction of the words used in Art 9 to exclude situations that are not concerned with the protection of the rights of workers and employers acting in those capacities, even if the defendant’s act is somehow related to industrial action (e.g. violence on a picket line). In cases such as those referred to by the French delegation, the defendant’s liability should be characterized as arising otherwise than out of the exercise of his rights or of obligations imposed on him as a worker or an employer, as the case may be. The law applicable in such cases should accordingly be determined by the general rule in Art 4 (tort/delict), not Art 9.

9.30  The law applicable to these matters must be determined in accordance with other rules of private international law of the forum Member State. The law applicable under Art 9 will, however, apply to determine, for example, the legal and factual criteria that a trade union or other representative body must meet in order to be exempted from non-contractual liability for industrial action.

9.31  Under Art 9, without prejudice to Art 4(2), the law applicable to a noncontractual obligation of one of the listed categories of person for damages caused by an industrial action is the law of the country where the action is to be, or has been, taken. The connecting factor should be taken to refer to the country in which the acts of the workers collide with the interests of the employer, or vice versa. That will not necessarily be the same as the country in which the defendant acts, as the defendant’s involvement may be limited to an act preparatory to industrial action (e.g. a trade union serving a notice of industrial action). For example, in the case of the blacking of a ship, the country of industrial action will be the place where port workers refuse to cooperate in the loading or unloading of the ship. In the case of a strike, it will be the place(s) where workers would ordinarily work but for the stoppage.⁵¹

9.32  By reason of the reference to Art 4(2), the law otherwise applicable under Art 9 will be displaced if the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs.⁵² In this case, the law of the country of common habitual residence will apply. There being no reference in Art 9 to Art 4(3), it is not possible for that law, or the law which otherwise applies under Art 9, to be displaced on the basis of a manifestly closer connection to another country. The reason for including the common habitual residence rule without the more flexible escape clause is puzzling, but seems to be part of the overall conviction of the framers of the Regulation that application of the common habitual residence rule reflects the legitimate expectations of the parties. That will not always be the case⁵³ and, without any fallback, it may lead to unsatisfactory results. For example, if an international trade union based in London and acting from its headquarters organizes the blacking in Sweden of a ship owned by an English company, and operated from Harwich,⁵⁴ the law applicable under Art 9 to a claim against the union to prohibit the action will be English not Swedish law.(p. 484)