A staff strike cannot be considered as an ‘extraordinary circumstance’ for the purposes of exonerating an air carrier from its obligation to pay compensation to passengers whose flight has been cancelled, the Court of Justice (CJEU) has recently affirmed.
EU law makes provision for various rights in so far as air passengers are concerned. One such right relates to the payment of flat-rate compensation by an airline to passengers whose flights are cancelled or largely delayed. The entitlement of passengers to such compensation is, however, subject to the fulfilment of certain criteria.
In the eventuality of a cancellation, compensation is to be paid only if the passenger has not been informed of such cancellation sufficiently in advance. Similarly, no compensation will be paid if the airline can prove that the cancellation was caused by extraordinary circumstances which could not have been avoided, even if all reasonable measures had been taken.
What constitutes ‘an extraordinary circumstance’ has been the subject of much debate, with the CJEU pronouncing itself on the matter in various cases.
The facts of this most recent case on the subject matter were briefly as follows. A passenger had booked a seat on a flight from Malmö to Stockholm but the flight was cancelled on the day of the flight. The cancellation was due to a pilot strike called by a pilots’ trade union in accordance with national law, after all negotiations with the airline in relation to a new collective agreement failed. As a result of the strike, various flights by the airline were cancelled.
Proceedings were filed by passengers’ representatives to claim the compensation provided for by EU law. However, the relevant airline refused to pay the compensation, claiming that the strike by the pilots constituted an ‘extraordinary circumstance’ in terms of EU law. The claimant disagreed since, in its view, industrial action which is liable to take place when collective agreements are negotiated and concluded, falls within the ordinary course of business of an airline. The adjudicating body seized of the case filed a preliminary reference before the CJEU requesting guidance on the matter.
The CJEU observed that the concept of ‘extraordinary circumstances’ in terms of EU law refers to events which meet two cumulative conditions - they must not be inherent, by their nature or origin, in the normal exercise of an air carrier’s activity, and they must be beyond its actual control. It maintained that the concept must be interpreted strictly since this is an exception to the general rule that passengers are entitled to compensation should their flight be cancelled without sufficient notice.
A strike must be regarded as an event inherent in the normal exercise of the employer’s activity
Applying the two conditions to the cause of the cancellation in this particular case, that is, a strike of staff whose presence is necessary to operate a flight, the court noted that the right to take collective action, including strike action, is a fundamental right, provided for by the Charter of Fundamental Rights of the European Union. Hence, a strike must be regarded as an event inherent in the normal exercise of the employer’s activity, irrespective of the specific features of the relevant industry or of any national laws regulating the implementation of such a right. Such an interpretation also applies to the airline industry since measures relating to the working conditions and remuneration of staff fall within the normal management of an airline’s activities.
In so far as the second condition is concerned, namely, whether the strike in question could be entirely beyond the airline’s actual control, the court observed that since the right to strike is a right of workers guaranteed by the Charter, a strike’s launch is foreseeable for any employer, even more so when notice of the strike is given. Hence, the employer retains control over events since, in principle, it has the means to prepare for the strike and, possibly, mitigate its consequences. This applies also to the airline industry.
The CJEU went on to distinguish between events whose origin is ‘internal’ to the operating air carrier and those events whose origin is ‘external’ and hence, cannot be controlled by the relevant airline.
In the latter category fall events which arise from a natural event or an act of a third party, such as another air carrier or a public or private operator interfering with flight or airport activity. This means that strikes ‘external’ to the activity of the air carrier, such as strikes by air traffic controllers or airport staff, could qualify as ‘extraordinary circumstances’.
On the contrary, a strike set in motion and observed by members of the relevant airline’s own staff is an event internal to the undertaking, even though called by trade unions, since the latter represent the airline’s employees’ interest. However, the court also observed that, if such a strike originates from demands which only the public authorities can satisfy, then it could constitute an ‘extraordinary circumstance’ since it is beyond the air carrier’s actual control.
The court went on to examine the airline’s allegation that an interpretation to the effect that a strike is not to be considered as an ‘extraordinary circumstance’ could impact its freedom to conduct a business, its property rights and its right of negotiation.
It noted that the fact that an airline may be compelled, due to such strike, to pay compensation to passengers for flight cancellation, does not mean that it must accept, without discussion, the strikers’ demands in their entirety. The air carrier remains able to assert the undertaking’s interests in order to reach a compromise that is satisfactory for all the social partners involved.
The airline’s freedom to conduct a business and right to property are not absolute rights, the CJEU affirmed. Indeed, the overriding objective of consumer protection may justify even substantial negative economic consequences for certain economic operators.
Consumer protection is definitely not taken lightly by the EU institutions. A strict interpretation of exceptions to the general rule by the EU judiciary, serves to highlight the fact that the overriding objective of the EU’s consumer acquis remains invariably the protection of consumer interests, even in those cases where the other contracting party may be in a situation between a rock and a hard place.
Mariosa Vella Cardona, M’Jur, LL.D., is a freelance legal consultant.