Freight forwarding sector, sympathy strikes and a precautionary measure

Precautionary measure and sympathy strikes applied on freight forwarding sector

FINLAND – The Finnish Supreme Court has handed down a verdict (KKO 2020:50) affecting Finnish freight forwarding sector (DHL -case). In the verdict the Finnish Supreme Court stated that the group of companies (DHL group) were not able to proof that the sympathy strike actions informed by several unions would have been discriminatory or unlawful. Therefore, there were no grounds to give a temporary security decision (special protective measure/ precautionary measure) against unions as enacted in the Finnish Procedural Act.

Background | District Court

DHL group companies requested in the District Court in a petition that the District Court oblige every union on the basis of EUR 1 000 000 fine to terminate and not to participate to a supporting strike informed to begin on 30.11.2015 on the part that the supportive strike would prevent shipping and loading of the applicants’ transport units to and from ships as well as cargo handling in the harbors in Finland. Furthermore, DHL requested that the decision is given without hearing the other parties (unions).

The District Court provided preliminary securing decision (precautionary measure) as requested without hearing the other parties, however, imposed fine was that of EUR 500 000 to each union. After the decision was given the District Court reserved to the unions right to provide a response. The unions requested in their response that the decision is rejected.

However, as the unions cancelled their supportive strike after the preliminary securing decision was handed down, the District Court imposed that the preliminary securing decision was to be cancelled and the case to be dropped.

Appeal Court | When strike can be understood to be unlawful

The unions appealed to the Appeal Court and requested that the preliminary securing decision is to be dismissed and the decision of the District Court is also on this basis cancelled. Secondary, the unions requested to be confirmed that there was no basis to the decision given even on the part of the preliminary securing decision. DHL group on their response requested that the appeal is dismissed.

The Appeal Court argued in their decision that based on the current legal praxis industrial action (union strikes) based on embargo can be forbidden based on a securing decision in case the applicant proofs probable that the strike is unlawful. A strike is considered to be unlawful in case based on its execution, aim or its consequences it is considered to be against ordre public or principles of morality or unreasonable.

The Appeal Court stated that as the consequences of the sympathy strike would have led to a situation where business activity of DHL group would have been stopped and as the sympathy strike was focused only to one group (DHL) therefore the intended sympathy strike was not proportionate when considering the aim of the sympathy strike. Therefore, the Appeal Court decided that the considered sympathy strike was to be seen as misuse of right to strike and unreasonable for the group of companies and therefore considered as against good behavior.

Decision of the Finnish Supreme Court | Burden of proof on the applicant

The Supreme Court stated in the decision that the applicant has had a burden of proof to indicate that grounds for the preliminary securing decision have been fulfilled. Furthermore, the Supreme Court indicated that the group of companies (DHL) did not prove that the impact of the informed sympathy strike to a party participating to a collective agreement negotiation as a representative of the employer and based on the limited focus of the actions were ineffective with respect to the pursued pressure effect. Therefore, the Supreme Court found no reason to consider that the actions would have been excessive with respect to the aim and that these actions could therefore be forbid.

Furthermore, no other facts were presented that would have supported the claim of the group of companies (DHL) that their business operations were severely endangered by the informed sympathy strike. Therefore, the Finnish Supreme Court considered that in the matter was not proven that the sympathy strike could be viewed even on this basis unlawful or against good behavior or unreasonable.

The group of companies (DHL) was not able to prove on the basis of probabilities that they had a right on the basis of the Finnish Procedural Act for the provided preliminary securing right. Therefore, the District Court did not have prerequisite to impose a preliminary securing right and the application of the group of companies (DHL) should have been rejected in the first place.

However, as the District Court has withdrawn its preliminary securing right decision the Supreme Court shall not provide any further statement in the matter.

The Finnish Supreme Court annulled the decisions of the District and Appeal Court and confirmed that there were no grounds for providing a preliminary securing right in the matter.

Conclusion | Recommendations | Freight forwarding sector

When considering to apply a preliminary securing right in an industrial action we recommend that the legal basis for the application is thoroughly reviewed. We point out that there are numerous Finnish Supreme Court Decisions clarifying the possibility to succeed for the petition. However, justification of the applied preliminary securing right must be reviewed and considered with due care. As there are no clear and exact justifications for securing a preliminary securing right in the Procedural Act we are certain that this right is seek in the possible future strikes as well.

We point out that, the Finnish Supreme Court has previously indicated that an embargo directed to a foreign vessel was unlawful as the aim of the embargo had been to solicit a collective agreement which would not have been binding to the employment contracts of the sailors based on the applicable law and would not therefore provided to the sailor’s rights intended in the contract in the first place.

Therefore, to prove the aim of the union in the possible future application for preliminary securing right is of essence. Moreover, as the aim of the union can be challenging to know beforehand legal and business-based argumentation as well as efficient use of right of edition can be argued to be of essence to succeed in such petition in the future. Please notice that precautionary measures have been used successfully in freight forwarding and maritime sector previously in Finland and therefore this tool must be remembered in the future as well.

* * *

LKOS Law Office’s lawyers are available to assist and to clarify any questions you may have regarding the above case or your current business law issues. Please feel free to contact our Specialist Partner Oscari Seppälä in respect to international trade or transport law matters.

About | LKOS Law Office

LKOS Law Office is a boutique business law firm located in Helsinki. We provide high quality legal services to foreign and domestic companies. We are specialised in transport, insurance-, customs- and international trade law issues. Our office is elected as transport law office of the year 2019 and 2020 in Finland.

Furthermore, our NewLaw -concept secures that we serve all of our clients individually and by way of exceeding their preliminary expectations regarding business law services.

Moreover, we are a reliable partner in a rapidly changing business environment.

In case you are interested in hearing more about our services and personnel, please do not hesitate to contact us by email or visit LKOS Law Office webpage for further information. Our specialist in this subject matter is Oscari Seppälä. For further information please contact our specialists by email or by phone (+358 40 672 4285).

Should you wish to hear and read our latest news directly please follow us on LinkedIn.

*This article is for general information purposes only and does not constitute a legal advice.