Staff strike not an exceptional circumstance exonerating airline from compensation

Author: Filip Dorssemont (Université catholique de Louvain)

Regulation

The Regulation (EC) No 261/2004 protects airline customers who are denied boarding against their will, or whose flights are cancelled or delayed, but who finally reach their destination by being transferred to another flight. Under certain conditions, these passengers can count on compensation for the inconvenience suffered. The regulation provides for a flat-rate compensation scheme based on the number of kilometres travelled on the initial scheduled flight. This conditional right to compensation is subject to an exception where the air carrier can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

In this regard, an important consideration identifies 'strikes that affect the operation of the operating air carrier' as an example of such extraordinary circumstances.

The Court of Justice has consistently clarified that these extraordinary circumstances concern events which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control. Those are two cumulative conditions that are the subject of case law. Strikes, too, must satisfy those conditions.

ECJ 23 March 2021, Case C-28/20 (Airhelp Ltd – v – SAS)

The preliminary ruling procedure formally concerns a scheduled flight on 9 April 2019 of one person whose flight between Malmö and Stockholm was cancelled. The subject of the proceedings is compensation of EUR 250. Behind that one person is a manoeuvre by the organisation Airhelp, which represents the interests of travellers. The cancellation was the result of a collective labour conflict that was doomed to happen. written in the stars. A year earlier, the SAS pilots' unions had terminated the collective Negotiations were very difficult and the pilots' unions announced a work strike in good time (with at least seven days' notice) that ran from 26 April to 2 May 2019. This strike was a success. Still on 2 May 2019, a collective agreement was signed which improved the pilots' working conditions. The pilots' union obtained a wage increase of 10.5 percent over a three-year period. This was slightly below their initial demand of 13 per cent, but well above the 6.9 per cent that the social mediator wanted them to swallow. The same airline that signed up for 10.5 per cent will later claim, by all means, that the unions' initial demand was totally unreasonable and ask the Court to take this question of opportunity into account.

The airline refused to pay the 250 euros to Airhelp, to whom the injured party's claim had been transferred, after which the former instituted proceedings in Sweden. The airline defends itself by arguing that this perfectly regular and lawful internal strike under Swedish law constituted an extraordinary circumstance which would have an exonerating effect. The Swedish court referred a number of questions for a preliminary ruling, which the Court reduced to one: does a strike by an essential category of the staff of an airline company, which is lawful and regular under Swedish law, constitute an exceptional circumstance? The national court explicitly asked that the reasonableness of the demands be taken into account, as well as the fact that the unions had rejected a proposal made by the mediator.

The Court ruled that such a strike could not in any way be regarded as an exceptional circumstance exonerating the airline. What is decisive is that an internal strike is a phenomenon which constitutes, for the airline, an inherent risk in the normal running of its business. The recognition of the right to collective action in Article 28 CFREU is decisive. This fundamental right recognises the right to collective action on behalf of employees. The Court indicates that this certainly applies to strikes relating to working conditions as well as to strikes that break out in the context of a planned restructuring, based on an earlier judgment.

The Court considers that the strike was perfectly foreseeable. It was in the air as soon as the old collective labour agreement was terminated by the unions and a fortiori when a strike notice was given. The Court of Appeal rightly observed that the strike was not inevitable either. The decisive factor is not whether the employer had full control over the order word, but whether he could not prevent the strike in any way. As the strike was part of a negotiation about the labour conditions in which he himself participated, it did have some impact. Nor could it be seriously argued that the strike within the company constituted an external cause for the airline. The Court clarified that the reference to the strike in the recital refers to strikes that are external to the airline but nevertheless crippling.

The Court fully weighs the Charter of Fundamental Rights of the European Union. It does weigh the right to strike against the freedom to conduct a business (Article 16 CFREU) and the right to the protection of property (Article 17 CFREU). The Court also takes into account the freedom of collective bargaining. It demonstrates a correct understanding of the dialectics of collective bargaining and strikes. Collective pressure on a bargaining partner and bargaining freedom are not irreconcilable. There is always the possibility of compromise. In this case, this compromise was reached afterwards. Both parties put water in their wine.

Consumers and workers equally protected

In strikes affecting the transport of persons, consumers are often pitted against the striking workers in what is supposed to be the public opinion. This overlooks the fact that, behind the consumers, there are often workers as well. The Court overrules this contradiction, because in this dispute the interests are perfectly aligned. If the Court  had considered the strike as an extraordinary circumstance, the consumer would have been left out in the cold and the economic pressure generated by the strike on the employer would have been considerably lighter. The Court also demonstrates a correct understanding of the dialectics of collective labour disputes. In my opinion, the use of the strike weapon only amounts to an intelligent exercise of economic power. There is no reason why only trade unions, as economic actors, should not be allowed to play that economic power in a negotiation. Indeed, it is precisely because a strike exerts economic pressure that negotiations are concluded with a collective agreement. Nor does the Court allow itself to be tempted to assess the excessive nature of the trade union demands. If the Court had taken this into account, it would actually have had to give an opinion on the appropriateness of the strike action in place of the trade unions. The European Committee of Social Rights has noted in a number of conclusions that it is not for the court to substitute itself for striking workers when assessing the appropriateness of a strike. It unmasked and condemned on that ground a certain (Belgian) application of the doctrine of abuse of rights and a certain (Dutch) application of the ultimum remedium principle.

PIL and strike types

In an important consideration (28), the Court indicates that in assessing the exceptional nature of a "strike" it must make abstraction of the national law applicable to that strike. I find this a fortunate case. After all, the strike affected passengers of a multitude of nationalities and it concerned a transnational strike affecting Norway, Denmark and Sweden. As a result, the Court is actually developing a kind of alternative typology of strikes that is autonomous and separate from the question of a national law typology of lawful and unlawful strikes. For instance, the Court cites the Krüsemann judgment (C‑195/17), in which a "wildcat strike" in Germany was central, as an example of a strike that did not constitute an extraordinary circumstance either. Conversely, in an obiter dictum (recital 45), the Court states that a strike directed against the government but directed against an airline would constitute an exceptional circumstance. It should not be derived from this that the Court would impose a national strike typology here. Such a protest strike of which the stakes are socio-economic would be perfectly legitimate under Belgian law, even if some politicians would qualify it as a political strike. From the outset, one should therefore warn against this kind of spill-over use, to which the Viking and Laval judgments gave rise. The latter judgments could only apply to strikes that conflict with transnational economic freedoms.