FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 41579/98 by AB KURT KELLERMANN against Sweden

The European Court of Human Rights (Fourth Section), sitting on 1 July 2003 as a Chamber composed of

Sir Nicolas Bratza , President , Mr M. Pellonpää , Mrs E. Palm , Mrs V. Strážnická , Mr M. Fischbach , Mr S. Pavlovschi , Mr J. Borrego Borrego , judges , and Mr M. O’Boyle , Section Registrar ,

Having regard to the above application lodged with the European Commission of Human Rights on 20 February 1998,

Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The applicant, AB Kurt Kellermann, is a Swedish limited liability company which was declared bankrupt on 17 June 1998. It is represented before the Court by Messrs J. Tillqvist and A. Lindow , lawyers practising in Stockholm . The respondent Government are represented by Ms E. Jagander, Ministry for Foreign Affairs.

A. The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicant company, which conducted business within the textile industry, was not a member of any employers’ association. Thus, it was not automatically bound by any collective labour agreement ( kollektivavtal ) concluded by the parties on the Swedish labour market, and it had not signed any such agreement on its own motion. It had about twenty employees of which two were members of the Industrial Union ( Industrifacket ; hereinafter “the union”), an association affiliated to the Swedish Trade Union Confederation ( Landsorganisationen ; hereinafter “LO”).

In the spring of 1997 the union requested negotiations with the applicant with a view to conclude a collective agreement. Such negotiations were held on 13 May 1997. The minutes of the negotiations stated, inter alia , that the applicant, at the moment, was not interested in concluding an agreement but would consider the matter. The minutes also recorded that the parties had concluded that the salaries paid by the applicant were higher than the minimum salary stipulated in the collective agreement suggested by the union.

In a subsequent exchange of written statements the applicant declared that it had no intention of concluding a collective agreement with the union.

Soon thereafter the union demanded that the applicant sign the so-called IG agreement ( IG- avtalet ), a collective agreement specially conceived by the union for employers who are not members of any employers’ association. The applicant declined, stating that the terms of employment applied at the company were considerably more favourable to the employees than those stipulated by the IG agreement, that the existing employment contracts were perfectly adequate and that the employees belonging to the union objected to the union intervening on their behalf. However, the applicant offered to sign a collective agreement with the union containing the terms of employment already applied at the company. The union rejected this proposal and announced that it may take industrial action.

On 3 October 1997 the union gave the applicant formal notice ( varsel ) that it would take action by ordering the cessation of all work at the company and by placing the company under a “blockade” as from 13 October unless an agreement had been reached before that date.

On 17 October 1997 the applicant initiated proceedings against the union before the District Court ( tingsrätten ) of Stockholm, claiming that the announced industrial action was unlawful and that the union should be ordered to withdraw the notice. The applicant also requested that the Court make an interim order to this effect.

On 20 October 1997 the union carried out the industrial action. It lasted for only one day. The notice was still effective, however.

Negotiations were thereafter held before the National Conciliation Board ( Statens förlikningsmannaexpedition ). The union stated that certain parts of the IG agreement were not negotiable. The applicant expressed that it considered joining the Textile and Clothing Industry Employers’ Association ( Tekoindustriernas arbetsgivarorganisation ), in which case the union declared that it would not take any further industrial action against the company. However, the applicant did not join that association and the negotiations were unsuccessful.

On 13 November 1997 the District Court rejected the applicant’s request for an interim order.

In the further proceedings, the union claimed that the District Court was not competent to deal with the dispute and that, instead, it should be handled by the Labour Court ( Arbetsdomstolen ) as the first and only judicial instance. By a decision of 5 December 1997 the District Court, referring to chapter 2, section 1, subsection 4 of the Act on Litigation in Labour Disputes ( Lagen om rättegången i arbetstvister , 1974:371; hereinafter “the 1974 Act”) and section 41 of the Act on Co-Determination at Work ( Lagen om medbestämmande i arbetslivet , 1976:580; hereinafter “the 1976 Act”), agreed with the union and thus forwarded the case to the Labour Court.

Before the Labour Court, the applicant claimed that, in determining the case, it should be composed only of professional judges – i.e. without members representing employers’ and employees’ interests – as it would otherwise not meet the requirement of objective impartiality under Article 6 of the Convention.

On 14 January 1998 the Labour Court, composed of members not representing labour market interests, rejected the applicant’s claim, stating that the Court, at the main hearing in a case, must be composed in accordance with chapter 3, section 6 of the 1974 Act.

The Labour Court held a hearing in the case on 23 January 1998.

The applicant maintained that the industrial action taken by the union aimed at forcing the applicant to join an employers’ association or accept the collective IG agreement drawn up by the union. The applicant stated that only two union members were employed at the company and both of them had declared that they did not want to take part in the industrial action. The applicant claimed also that the terms of employment applied at the company were more favourable than those stipulated by the IG agreement. As, allegedly, there was no reasonable proportionality between the means employed by the union and the aim sought to be achieved, the action taken violated the applicant’s right not to join an employers’ association and thus its right to negative freedom of association under Article 11 of the Convention. Alternatively, the applicant asserted that the action conflicted with a general principle of proportionality allegedly applicable under Swedish law, as it could entail serious economic consequences for the company.

The union, on its part, claimed that the terms of employment applied by the applicant, on the whole, were not more favourable than the IG agreement although, admittedly, the salaries of its two members were higher than the minimum salary prescribed by that agreement. The union stated also that the IG agreement could be adapted to meet the special requirements of the applicant company. Moreover, the union maintained that the Convention was not applicable to the dispute as, allegedly, it only governed relations between individuals and the State and as the 1976 Act was applicable as lex specialis . Alternatively, the union asserted that Article 11 of the Convention did not afford any protection to a limited liability company and that, in any event, the judgment of the European Court of Human Rights in the case of Gustafsson v. Sweden ( judgment of 25 April 1996, Reports of Judgments and Decisions 1996-II, p. 637 et seq. ) showed that Article 11 did not confer a right not to sign a collective agreement. As regards the industrial action taken, the union stated that it served the legitimate aims of improving the employment situation for union members and protecting them in various respects and that it could not be considered disproportionate to those aims. The union also claimed that a general principle of proportionality, as invoked by the applicant, could not be used to limit the constitutional right to take industrial action. Allegedly, the right to take such action against employers not bound by collective agreements is in principle unlimited under Swedish law.

By a judgment of 11 February 1998 the Labour Court found in favour of the union. Noting at the outset that the parties agreed that the industrial action in question was not unlawful under the 1976 Act, it went on to examine in detail whether it could involve a violation of the applicant’s right to negative freedom of association under Article 11 of the Convention which is part of Swedish law since its incorporation on 1 January 1995. First, the Labour Court rejected the union’s preliminary objections as to the applicability of the Convention, as such, to the dispute at hand. It noted, inter alia , that the rules on industrial action in the 1976 Act – being based on the constitutional principle that the right to take such action is unlimited unless otherwise provided by law – prescribed in which situations such action would be unlawful. Thus, it could not be excluded that further restrictions on the right to take industrial action could follow from other legislation, including the Convention. The provisions of the 1976 Act, therefore, did not hinder the application of Article 11 of the Convention. The Labour Court then went on to examine whether the industrial action at issue violated Article 11. It noted that the rationale behind the union’s action was not to force the applicant to join an employers’ association but to conclude a collective agreement with the applicant which, according to the union, would promote the economic interests of its members. Among other things, the proposed agreement prescribed that compensation be paid for overtime work which, indisputably, was not the case under the terms of employment prevailing at the applicant company. Having regard, inter alia , to the above-mentioned judgment in the case of Gustafsson v. Sweden , the Labour Court concluded that the industrial action in question did not violate the applicant’s rights under Article 11. It found also that there was no basis in law for the applicant’s contention that a general principle of proportionality was applicable in labour conflicts.

Seven members took part in the Labour Court’s hearing and its judgment . In accordance with the 1974 Act, the Labour Court was composed of two legally trained and qualified judges and five lay assessors. One assessor had been appointed due to her special knowledge of the labour market. However, she did not represent employers’ or employees’ interests. Of the other four assessors, two had been nominated by employers’ associations (a director in the Swedish Employer’s Confederation ( Svenska Arbetsgivareföreningen ; hereinafter “SAF”) and an employee of the Ministry of Finance representing the State employers) and two by employees’ associations (ombudsmen in LO and the joint Central Organisation of Salaried Employees and Central Organisation of Swedish Academics ( Tjänstemännens Centralorganisation and Svenska Akademikers Centralorganisation ; hereinafter “TCO/SACO”), respectively).

The member nominated by SAF disagreed with the Labour Court’s judgment and considered that the industrial action in question violated Article 11 of the Convention as the union had failed to show that the terms of employment stipulated by the IG agreement were more favourable than those applied by the applicant.

Following the Labour Court’s judgment , the union again approached the applicant with a view to conclude a collective agreement. The applicant refused anew and informed the union that the IG agreement’s rules on overtime work had been introduced at the company.

On 23 February 1998 the union applied to the Labour Court to have a declaratory judgment establishing the union’s right to take immediate industrial action against the applicant. It requested also that the Court take an interim decision on this matter.

The applicant opposed the union’s claims and again made an objection as to the composition of the Labour Court. The applicant requested also that the union be ordered to provide security for the damage possibly inflicted on the applicant.

By a decision of 9 March 1998 the Labour Court, composed of members not representing labour market interests, rejected the applicant’s challenge to its impartiality on the same grounds as its decision of 14 January 1998.

Following a hearing on 12 March 1998, the Labour Court, by a decision of 13 March, granted the union’s request for an interim declaration that the envisaged industrial action was lawful. It thus rejected the applicant’s claims that the union’s application was res judicata on account of its previous judgment and that the requirements under Swedish law for a declaratory decision – whether final or ad interim – were not met. It also rejected the applicant’s claim that the envisaged action should be deemed unlawful as the IG agreement’s rules on overtime work had been introduced at the company – an assertion which was not confirmed by the union – and as the two union members had been dismissed due to scarcity of work at the company. Referring to its established case-law, the Labour Court also found that the union, being an organisation, did not have to provide security.

The Labour Court hearing and examining the union’s claims was composed in the same manner as before, including two assessors nominated by employers’ associations (another SAF director and the same employee of the Ministry of Finance) and two by employees’ associations (a former vice-president of a trade union affiliated to LO and a former head lawyer of a trade union affiliated to TCO/SACO).

The member nominated by SAF submitted a dissenting opinion to the Labour Court’s decision, finding that it was not perfectly clear that the envisaged industrial action was lawful, for which reason the union’s interim request should be rejected.

The applicant complained to the Supreme Court ( Högsta domstolen ), requesting that the Labour Court’s decision of 13 March 1998 be set aside due to a grave procedural error ( domvilla ) having been committed. Allegedly, the Labour Court could not rule on the Union’s request unless security had been furnished for the applicant’s potential loss. Alternatively, the applicant’s negative freedom of association had been breached as a consequence of the union having been afforded procedural privileges in its capacity of an organisation. On 26 March 1998 the Supreme Court denied the applicant’s request, finding that it had not presented any circumstances that would give reason to quash the Labour Court’s decision.

Apparently, the union’s industrial action was put into effect on 6 April 1998. Sympathy industrial action was taken by other trade unions. On 8 April the applicant joined an employers’ association, the Swedish Textile and Clothing Industries’ Association ( Tekoindustrierna ), and thus became bound by a collective agreement. The union’s own industrial action was immediately withdrawn whereas the sympathy action by another trade union lasted over the Easter weekend until 13 April.

On 30 April 1998 the Labour Court struck out of its list the case lodged by the union on 23 February 1998 following a settlement between the applicant and the union and the latter’s withdrawal of the court action against the applicant.

Due to declining profitability the applicant, in June 1998, filed for bankruptcy. By a decision of 17 June the District Court of Nacka declared the applicant bankrupt. On 30 March 2001 the bankruptcy proceedings were terminated and the applicant company dissolved.

B. Relevant domestic law

1. The relations between employers and employees

The right to take industrial action is guaranteed under the Swedish Constitution. Chapter 2, section 17 of the Instrument of Government ( Regeringsformen ) provides the following:

“Any trade union or employer or association of employers has a right to take industrial action unless otherwise provided by law or by agreement.”

The law referred to is the Act on Co-Determination at Work (“the 1976 Act”). The right of association is defined in section 7:

“Right of association means the right of employers and employees to belong to an organisation of employers or employees, to benefit from their membership as well as to work for an organisation or for the founding of one.”

This right is further regulated in section 8:

"The right of association shall not be violated. A violation ... will occur, if anyone from the employer’s side or the employee’s side takes any action to the detriment of anybody on the other side by reason of that person having exercised his right of association, or if anybody on either side takes any action against anybody on the other side with a view to inducing that person not to exercise his right of association. A violation will occur even if the action so taken is designed to fulfil an obligation towards another party.

An employers’ or employees’ organisation shall not have to tolerate a violation of its right of association encroaching upon its activities. Where there is both a local and a central organisation, these provisions shall apply to the central organisation.

If the right of association is violated by termination of an agreement or another legal measure or by a provision in a collective agreement or other contract, that measure or provision shall be void."

Section 10 provides a right of negotiation:

"An employees’ organisation shall have the right to negotiate with an employer regarding any matter relating to the relationship between the employer and any member of the organisation who is or has been employed by that employer. An employer shall have a corresponding right to negotiate with an employees’ organisation.

A right of negotiation ... shall also be enjoyed by the employees’ organisation in relation to any organisation to which an employer belongs, and by the employer’s organisation in relation to the employees’ organisation."

Under section 41 there is an obligation for parties bound by a collective agreement to maintain peaceful industrial relations. The provision states as follows:

“Employers and employees who are bound by a collective agreement may not initiate or take part in the stoppage of work (lockout or strike), blockade, boycott or other comparable industrial action, if the agreement has been concluded by an organisation and that organisation has not decided on the measure in due order, if the measure is contrary to a provision on peaceful industrial relations in a collective agreement or if the measure is designed

1. to exert pressure in a dispute concerning the validity, continuance or meaning of the collective agreement or in a dispute whether certain conduct is contrary to the agreement or this Act,

2. to bring about changes in the agreement,

3. to realise a provision which is intended to be applied once the agreement is no longer valid, or

4. to support somebody else, when that person has no right to take industrial action.

Industrial action taken in contravention of the first paragraph is unlawful.

...”

2. Litigation in labour disputes

Labour disputes are generally governed by the provisions of the Code of Judicial Procedure ( Rättegångsbalken ). However, the Act on Litigation in Labour Disputes (“the 1974 Act”) contains specific rules relevant to disputes concerning the application of the 1976 Act and other labour disputes. The competence of the courts is laid out in chapter 2 of the 1974 Act. Section 1 provides the following:

“The Labour Court shall, as a court of first instance, receive and decide a dispute which is introduced by an employers’ or employees’ organisation or by an employer who himself has concluded a collective agreement, if the case concerns

1. a dispute on a collective agreement or another labour dispute referred to in [the 1976 Act],

2. another labour dispute on condition that there is a valid collective agreement between the parties or that an individual employee concerned by the dispute is employed in work covered by a collective agreement by which the employer is bound.

The Labour Court is the competent court under the first paragraph also when a collective agreement is temporarily not valid.

Also another labour dispute between the same or other parties may be heard together with a labour dispute under the first and second paragraphs, if the Court finds it expedient on account of the investigation or other circumstances. When appropriate, the cases may be separated again.

The Labour Court is always competent, as a court of first instance, to receive and decide a dispute referred to in section 41 of [the 1976 Act]”.

Other labour disputes are brought before the District Court (section 2) and appeals lie to the Labour Court (section 3). The Labour Court’s judgments and decisions are final (section 4).

The composition of the Labour Court is regulated in chapter 3 of the 1974 Act. Sections 1-3 contain rules on the number of members in the Labour Court, the criteria for and term of office and the nomination and election of members. Section 1 states as follows:

“The Labour Court is composed of no more than four presidents, no more than four vice-presidents and seventeen other members.

A member shall be a Swedish citizen and may not be a minor or in a state of bankruptcy or under guardianship ... . Before taking up office in the Labour Court, he shall take the judicial oath.

...

Members ... are appointed by the Government for a period of three years.”

Section 2 provides:

“The presidents, the vice-presidents and three other members shall be elected among persons who cannot be considered to represent employers’ or employees’ interests.

The presidents and the vice-presidents shall be legally qualified and experienced in the judicial profession.

The three other members shall have special knowledge of the conditions on the labour market.”

Section 3 reads:

“Of the other fourteen members, four are elected on the proposal of the Confederation of Swedish Enterprise [ Föreningen Svenskt Näringsliv ; until 2001 the Swedish Employer’s Confederation], one on the proposal of the Swedish Association of Local Authorities [ Svenska Kommunförbundet ], one on the proposal of the Federation of County Councils [ Landstingsförbundet ], one on the proposal of the Swedish Agency for Government Employers [ Arbetsgivarverket ; until 1 July 2001 the text read “one as a representative of the State as employer”], four on the proposal of the Swedish Trade Union Confederation, two on the proposal of the Central Organisation of Salaried Employees and one on the proposal of the Central Organisation of Swedish Academics.

...”

Section 6 regulates the composition of the Labour Court in a particular case. It reads as follows:

“The Labour Court sits with a president as well as no more than six and no less than four other members. Of the members referred to in section 2, no more than three and no less than one take part. Of the members referred to in section 3, no more than four and no less than two take part, in equal numbers for the employers’ side and the employees’ side.

The Labour Court may also sit with a president and one member each for the employers’ side and the employees’ side

1. at a main hearing in a case which has no precedential significance and which is also in other respects of an uncomplicated nature,

2. in the determination of a case without a main hearing,

3. in other proceedings not conducted at a main hearing.

The Labour Court may further sit with three professional judges in proceedings referred to in subsection 2 (2) and (3), if the examination essentially concerns other than labour law matters.

...”

Chapter 11, section 2 of the Instrument of Government, safeguarding the independence of the judiciary, is applicable to the members of the Labour Court. It provides as follows:

“Neither a public authority nor the Parliament may decide how a court should adjudicate an individual case or otherwise apply a rule of law in a particular case.”

COMPLAINTS

1. The applicant complains that its right to negative freedom of association under Article 11 of the Convention has been violated. It argues that the action taken by the Industrial Union was not proportional to the aims pursued. Further, the Labour Court allegedly failed to make an overall assessment of the terms of employment applied at the company and those stipulated by the IG agreement and the consequences for the applicant caused by the union’s action. Moreover, the union was given preferential treatment as an organisation when the Labour Court, in its decision of 13 March 1998, refused to demand security for the union’s interim request.

2. The applicant also claims that it did not have a fair hearing by an impartial tribunal, as required by Article 6 § 1 of the Convention. The applicant refers to the composition of the Labour Court which included four members representing labour market associations and maintains that, as the cases heard by that court, inter alia , concerned the right to negative freedom of association, these four members must be deemed to have had interests opposed to the applicant’s claims. The applicant asserts also that the requirements under Article 6 § 1 were not met as the majority of the Labour Court’s members were not professional judges.

3. Finally, the applicant states that it did not have an effective remedy under Article 13 of the Convention against the alleged violation of Article 11, as its request for an interim order was rejected by the District Court on 13 November 1997 and it thus had to await the final outcome of the case, which involved a threat to the company’s continued existence.

THE LAW

The respondent Government, in their observations, questioned whether the applicant company had legal standing in the case following the end of the bankruptcy proceedings on 30 March 2001 when the company ceased to exist.

The applicant stated that no bankruptcy proceedings were pending at the time of its introduction of the present application and that the bankruptcy receiver had assigned to the applicant the right to proceed with the application.

The Court reiterates that the present application was introduced on 20 February 1998, at which time there were no bankruptcy proceedings concerning the applicant company. It was declared bankrupt about four months later, on 17 June 1998, and dissolved on 30 March 2001. Further, the previous share holder of the company has expressed the wish to pursue the case. In these circumstances, the Court considers that the applicant company has legal standing to pursue its application before the Court and thus decides to continue the examination of the case.

A. Alleged violation of Article 11

The applicant complains that its right to negative freedom of association has been violated. It relies on Article 11 of the Convention which provides the following:

“ 1. Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests.

2. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others. This Article shall not prevent the imposition of lawful restrictions on the exercise of these rights by members of the armed forces, of the police or of the administration of the State.”

1. Applicability of Article 11

The Government submit that Article 11 is not applicable in the present case. Citing the opinion of the minority in the case of Gustafsson v. Sweden , they claim that there is no basis for concluding that “compulsion aimed at making an employer enter into a collective agreement in itself – that is to say, in the absence of compulsion to join an association – come within the safeguard afforded by Article 11” (see the partly dissenting opinion of Judges Ryssdal , Spielmann , Palm, Foighel , Pekkanen , Loizou , Makarczyk and Repik , judgment cited above, p. 662). In this connection, the Government state that the applicant in the present case could have avoided industrial action by merely signing a collective agreement that was specially conceived by the union in order to suit employers who were not members of any employers’ association. Furthermore, the Government assert that the element of personal conviction – like Mr Gustafsson’s professed aversion to participation in the Swedish collective-bargaining system – is clearly absent from the present case.

The applicant company contends that Article 11 is applicable in the present case. It argues that the Industrial Union threatened with industrial action unless the applicant either joined an employers’ association or signed the IG agreement. The applicant found that that collective agreement was poorly adapted to the special nature of the business conducted by the company, in contrast to the employment contracts already applied. Having in no way participated in the drafting of the terms and conditions of the agreement, the applicant was placed in a situation where its only possibility of – indirectly – influencing those terms and conditions was to join an employers’ association. The applicant asserts that it was principally opposed to membership in such an association, as it did not wish to transfer the right of determination over central aspects of its business to an association whose aims did not correspond with those of the applicant and waive the right to negotiate itself with its employees regarding the terms and conditions governing their employment.

The Court considers that it is not decisive whether the applicant expressed a clear aversion to participate in the Swedish collective-bargaining system as such; it accepts that the applicant wished to retain the possibility of negotiating the terms of employment directly with its employees and that it, to this end, opposed to joining an employers’ association or signing the collective agreement proposed by the Industrial Union. Facing industrial action, the applicant was placed under considerable pressure to meet the union’s demand that it accept one of these alternatives. In these circumstances, the Court finds that, to a degree, the applicant’s enjoyment of its freedom of association was affected and that, thus, Article 11 is applicable in the present case (see Gustafsson v. Sweden , judgment cited above, p. 652, § 44).

2. Compliance with Article 11

The Government maintain, in the first place, that there has been no interference with the applicant’s rights for which the respondent State can be held responsible. Referring extensively to the Court’s conclusions in the case of Gustafsson v. Sweden ( judgment cited above, pp. 652-53 and 655-56, §§ 45 and 52-53), the Government assert that there is no right under the Convention not to enter into a collective agreement, that the system prevailing on the labour market in Sweden has special features that should be taken into account – including the principle of non-interference by public authorities to the largest possible extent –, that the applicant in the present case has not substantiated that the terms of employment offered by it were more favourable to the employees than the IG agreement proposed by the union, that the industrial action taken was of a very limited duration and that the national authorities enjoy a wide margin of appreciation in its choice as to the means to be used when achieving a proper balance between the competing interests involved in this particular area. Allegedly, should the respondent State be held responsible for what has occurred in the present case, it would be obliged to regulate in law the conditions for industrial action. This would entail a limitation on the constitutional freedom of trade unions to take such action and have a bearing on Sweden’s obligations under several international instruments.

In the event that the Court would find that there has been an interference with the applicant’s rights under Article 11, the Government assert that that interference was justified under the terms of the second paragraph of the Article, as it was prescribed by law, served a legitimate aim and was proportionate to that aim.

The applicant maintains that its rights under Article 11 were interfered with and claims that, although Swedish law provides for the possibility of taking industrial action with the aim of concluding collective agreements, there is no right for a labour association to determine unilaterally – and without negotiations – the terms of such agreements in relation to non-organised employers. Rather, the Swedish system is based on the idea that the parties jointly negotiate such terms, for instance by concluding so-called substitute agreements containing local adaptations to a centrally negotiated collective agreement. The applicant submits that that possibility is protected by Article 11. It also claims that the industrial action was not proportional to the aim sought to be achieved, as it threatened the existence of the company, as only two of the company’s employees were union members – who, moreover, did not support the Industrial Union’s action – and as the IG agreement was not more favourable to the employees than the existing employment contracts which, allegedly, contained better terms and conditions for the employees.

The Court reiterates that Article 11 of the Convention encompasses not only a positive right to form and join an association but also the negative aspect of that freedom, namely the right not to join or to withdraw from an association, and that State responsibility may be engaged by a failure to secure the effective enjoyment of those rights. It should be recalled, however, that, in view of the sensitive character of the social and political issues involved in achieving a proper balance between the competing interests and, in particular, in assessing the appropriateness of State intervention to restrict union action aimed at extending a system of collective bargaining, and the wide degree of divergence between the domestic systems in the particular area under consideration, the Contracting States should enjoy a wide margin of appreciation in their choice of the means to be employed (see Gustafsson v. Sweden , judgment cited above, p. 652-53, § 45).

In the present case, the Court notes that the applicant was not compelled by the union action to join an employers’ association, as it could have avoided that action by accepting to sign the collective agreement, the so-called IG agreement, proposed by the union. It appears that the terms and conditions of that agreement could be adapted to some extent to meet the special requirements of the applicant company. Furthermore, there is no evidence that the applicant was, in effect, compelled to opt for membership of an employers’ association because of economic disadvantages attached to the IG agreement. The Court reiterates that Article 11 of the Convention does not guarantee a right not to enter into a collective agreement unless the measures taken with the aim of reaching such an agreement would impinge on freedom of association. Compulsion which, as in the present case, does not significantly affect the enjoyment of that freedom, even if it causes economic damage, cannot give rise to any positive obligation of the State under Article 11.

The Court has further regard to the judgment of the Labour Court of 11 February 1998, according to which the collective agreement proposed by the union contained a clause on compensation for overtime work which had no parallel in the terms of employment prevailing at the applicant company. There is no evidence that the Labour Court did not make an overall assessment of the terms of employment applied at the company and those stipulated by the IG agreement. It is true that the applicant claimed, in the later proceedings before the Labour Court, that the IG agreement’s rules on overtime work had been introduced at the company. However, the union did not confirm the applicant’s assertion. As the parties subsequently reached a settlement, the Labour Court had no reason to examine this case on the merits but struck it out of its list of cases on 30 April 1998. Bearing in mind the special role and importance of collective agreements in the regulation of labour relations in Sweden, the Court sees no reason to doubt that the union action pursued legitimate interests consistent with Article 11 of the Convention (see Gustafsson v. Sweden , judgment cited above, p. 655-56, §§ 52-53).

Moreover, the fact that the Industrial Union, in accordance with the Labour Court’s established case-law, was not asked to provide security for damage possibly inflicted on the applicant cannot be considered to have had any bearing on the applicant’s rights under Article 11.

In view of the above, and having regard to the margin of appreciation to be accorded to the respondent State in the area under consideration, the Court does not find that Sweden failed to secure the applicant’s rights under Article 11 of the Convention.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

B. Alleged violation of Article 6 § 1

The applicant, referring to the composition of the Labour Court, claims that it did not have a fair hearing by an impartial tribunal, as required by Article 6 § 1 of the Convention. In relevant parts, Article 6 § 1 provides the following:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”

1. Applicability of Article 6 § 1

The Government contest that there was, in the proceedings before the Labour Court, a dispute over a “right” recognised by national law and thus assert that what has occurred in the present case falls outside the scope of Article 6 of the Convention. They argue that a right for the applicant company not to enter into a collective agreement but instead be protected against pressures in that direction could not be derived from either Article 11 of the Convention or any other part of the domestic legal order. The situation in the present case is thus in this respect the same as the one at issue in the case of Gustafsson v. Sweden , in which the Court concluded that there was no right recognised under Swedish law to attract the application of Article 6 § 1 (see judgment cited above, p. 659, § 66). The Government claim that the subsequent incorporation of the Convention into the Swedish legal order makes no difference in this regard, as the right claimed by the applicant in the domestic proceedings – to have the union’s industrial action stopped – could not be derived from Article 11.

The applicant contend that the concept of “civil rights and obligations” under Article 6 § 1 of the Convention must be given a broad interpretation. It emphasises that the Labour Court did not dismiss the applicant’s claim in the first case or its objections in the second case. Instead, the Labour Court’s rulings involved a substantive determination of the arguments presented, for which reason Article 6 § 1 must be deemed applicable.

The Court reiterates that for Article 6 § 1, in its “civil” limb, to be applicable there must be a dispute over a “right” that can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious. It may relate not only to the actual existence of a right but also to its scope and the manner of its exercise. Moreover, the outcome of the proceedings must be directly decisive for the civil right in question (see, among other authorities, Frydlender v. France [GC], no. 30979/96, § 27, ECHR 2000-VII).

The Court notes that the parties to the domestic proceedings in the case at hand agreed that the industrial action in question was not unlawful under the 1976 Act. Consequently, in seeking to have the union’s industrial action stopped, the applicant did not rely on any provisions of Swedish acts but based its claims mainly on the right to negative freedom of association under Article 11 of the Convention. The Convention forms part of Swedish law since its incorporation on 1 January 1995.

It is true, as has been mentioned above, that Article 11 does not as such guarantee a right not to enter into a collective agreement. However, the circumstances of a particular case may give rise to a positive obligation incumbent on the State under Article 11 if treatment connected with the operation of a collective-bargaining system impinges on freedom of association (see Gustafsson v. Sweden , judgment cited above, p. 656, § 52).

The Court further notes that the Labour Court, in examining the applicant’s claims, found Article 11 of the Convention applicable to the dispute at hand and noted that it could not be excluded that further restrictions on the right to take industrial action than those laid down in the 1976 Act could be derived from Article 11. Concluding that the industrial action at issue did not violate the applicant’s rights under that Article, the Labour Court explained in some detail why it did not agree with the applicant’s arguments.

In these circumstances, the Court considers that the applicant had, at least on arguable grounds, a claim under domestic law. Further considering that the right claimed was of a “civil” nature, that the dispute at issue was genuine and serious and that the outcome of the domestic proceedings was directly decisive for the civil right in question, the Court finds that Article 6 § 1 is applicable in the present case.

2. Compliance with Article 6 § 1

The Government, noting that the applicant company has not disputed the Labour Court’s independence or the impartiality of its professional judges, firstly submit that the applicant, before that court, challenged only the objective impartiality of the lay assessors and maintain that, in any event, it has failed to substantiate that the lay assessors were not impartial in the subjective sense.

The Government then claim that the balance of interests, inherent in the Labour Court’s composition, was not liable to be upset when the court came to determine the dispute between the applicant and the union, nor could the applicant legitimately fear that this was indeed the case. They submit, generally, that the lay assessors – in equal numbers from the employers’ and employees’ sides – contribute to the Labour Court with their special knowledge and experience of the labour market and that they should not in any sense be viewed as representatives or spokesmen for the parties in an individual case.

The Government further maintain that the present case can be distinguished from the case of Langborger v. Sweden ( judgment of 22 June 1989, Series A no. 155) in which the Court found a violation of the requirement of objective impartiality on the part of the lay assessors participating in proceedings before the Swedish Housing and Tenancy Court. Although the two lay assessors nominated by LO and SAF, respectively, could be said to have been linked to associations which were interested, generally speaking, in the system of collective agreements established by them on the labour market, that does not mean, in the Government’s opinion, that they had a common interest contrary to that of the applicant or an interest otherwise opposed to that of the applicant company. The fact that in each set of proceedings the lay assessor nominated by SAF did not agree with the majority view demonstrates that there were no such common or opposing interests at hand. Furthermore, only two of the lay assessors were in any way linked to LO or SAF. Thus, in the hypothetical situation that these lay assessors should have had a common interest in the widespread acceptance of the particular collective agreement in question, they would easily have been outnumbered by the other five members of the Labour Court. In this connection, the Government submit that the applicant company could not legitimately fear that the other two lay assessors had any interests that were opposed to its own, as they had no links to the associations which could, generally speaking, have an interest in the system of collective agreements pertaining to the applicant company’s business sector.

Finally, the Government contend that the fact that a majority of the Labour Court’s members were not professional judges is of no consequence in the context of the compatibility of the court’s composition with Article 6.

The applicant questions the impartiality of the Labour Court sitting in the present case. While primarily challenging the court’s objective impartiality, it also calls into question whether it was compatible with the requirement of subjective impartiality that a member of LO participated in the proceedings, given the fact that the Industrial Union is affiliated to that organisation.

As regards the objective impartiality of the Labour Court, the applicant claims that the lay assessors, who together formed a majority of the court’s members, may have had either a common interest which conflicted with that of the applicant or, in any event, interests which were not common but which conflicted with those of the applicant. It states that its primary argument in both sets of proceedings was that its right to remain outside of the labour market organisations had been infringed by the union action. Irrespective of whether the argument was justified or not, the applicant submits that a court whose majority is composed of representatives of these very organisations does not fulfil the requirements of impartiality under Article 6. It argues that the conclusions drawn by the Court in the case of Langborger v. Sweden ( judgment cited above) are applicable also in the present case.

The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

C. Alleged violation of Article 13

The applicant finally complains that it did not have an effective remedy under Article 13 of the Convention against the alleged violation of Article 11, as its request for an interim order was rejected by the District Court on 13 November 1997. Article 13 reads as follows:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

Leaving aside the question whether the applicant had an “arguable claim” of a violation of the Convention in connection with its request for an interim order, the Court notes that the request was in fact determined by the District Court and that there is nothing to suggest that that determination did not constitute an effective remedy.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares admissible, without prejudging the merits, the applicant’s complaint concerning the impartiality of the Labour Court ;

Declares the remainder of the application inadmissible.

Michael O’Boyle Nicolas Bratza Registrar President