EU passenger rights: Swedish court ruling
24 March 2021: A Swedish court has stated that a strike organised by pilots’ trade unions does not constitute an extraordinary circumstance. By its judgment, the Court held that strike action which is entered into upon a call by a trade union of the staff of an operating air carrier, in compliance with the conditions laid down by national legislation, in particular the notice period imposed by it, which is intended to assert the demands of that carrier’s workers and which is followed by a category of staff essential for operating a flight, does not fall within the concept of an ‘extraordinary circumstance’ within the meaning of the Air Passenger Rights Regulation.
Background
The passenger had a confirmed booking for an SAS flight from Malmö to Stockholm. The flight, which was scheduled on 29 April 2019, was cancelled the same day due to a strike of the SAS pilots in Norway, Sweden and Denmark.
The strike was organised by the pilots’ trade unions after those trade unions terminated the collective agreement previously concluded with SAS. Negotiations regarding a new agreement had been ongoing since March 2019. The strike lasted seven days and led SAS to cancel more than 4,000 flights, affecting around 380,000 passengers. If each passenger were entitled to lump-sum compensation, this would result, according to SAS’s calculations, in a cost of around €117,000,000.
A claim agency (Airhelp Ltd.) has requested the local court to rule that SAS must pay compensation as provided for in Regulation 261/2004.
Referral to the CJEU
The referring court asked the CJEU whether a lawful strike by pilots who are needed to carry out a flight constitutes an ‘extraordinary circumstance’ within the meaning of Regulation 261/2004, when the strike is initiated by workers’ organisations as an industrial action.
Opinion of the Advocate-General
In his Opinion, delivered on 16 March 2021, the Advocate-General considers that a strike as described in the referral, constitutes an ‘extraordinary circumstance’, exempting the air carrier from liability.
Such strikes according to the Advocate-General are indeed not ‘inherent to the normal exercise of the activity’ of the air carrier and is beyond its actual control. On the contrary, the aim of such strikes is to disturb the activity of the airline.
The Advocate-General has confirmed that, as an employer, the air carrier not only has the right to negotiate an agreement with employees by virtue of the right to collective bargaining, but also a responsibility to do so.
Otherwise, the right of air passengers to compensation could be ‘exploited’ by social movements for their own ends, which needs to be avoided.
Decision of the Court
First of all, the Court points out that the concept of ‘extraordinary circumstances’ in the Air Passenger Rights Regulation refers to events which meet two cumulative conditions, first, they must not be inherent, by their nature or origin, in the normal exercise of an air carrier’s activity and, second, they must be beyond its actual control.
It also explains that that concept must be interpreted strictly, in view of the fact that, first, the regulation has the objective of ensuring a high level of protection for air passengers and, second, the exemption from the obligation laid down by the regulation to pay compensation constitutes a derogation from the principle that air passengers have the right to compensation.
As regards, in the first place, the question whether the strike at issue might be categorised as an event which is not inherent in the normal exercise of an air carrier’s activity, the Court observes that the right to take collective action, including strike action, is a fundamental right, laid down in Article 28 of the Charter of Fundamental Rights of the European Union (‘the Charter’). In that regard, the Court states that a strike, as one of the ways in which collective bargaining may manifest itself, must be regarded as an event inherent in the normal exercise of the employer’s activity, irrespective of the particular features of the labour market concerned or of the national legislation applicable as regards implementation of that fundamental right. That interpretation must also apply where the employer is an operating air carrier, as measures relating to the working conditions and remuneration of the staff of such a carrier fall within the normal management of its activities.
So far as concerns, in the second place, the question whether the strike in question could be entirely beyond an air carrier’s actual control, the Court points out, first, that, since the right to strike is a right of workers guaranteed by the Charter, a strike’s launch is foreseeable for any employer, in particular where notice of the strike is given. Second, since a strike is foreseeable for the employer, it retains control over events in as much as it has, in principle, the means to prepare for the strike and, as the case may be, mitigate its consequences. In that respect, like any employer, an operating air carrier faced with a strike by its staff that is founded on demands relating to working and remuneration conditions cannot claim that it does not have any control over that action.
Therefore, according to the Court, a strike by the staff of an operating air carrier that is connected to demands relating to the employment relationship between the carrier and its staff that are capable of being dealt with through management-labour dialogue within the undertaking, including pay negotiations, does not fall within the concept of an ‘extraordinary circumstance’ within the meaning of the Air Passenger Rights Regulation.
The Court notes that, unlike events whose origin is ‘internal’ to the operating air carrier, events whose origin is ‘external’ are not controlled by that carrier, because they 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. Thus, it points out that the reference in the Air Passenger Rights Regulation 4 to extraordinary circumstances that may, in particular, occur in the case of strikes that affect the operation of an operating air carrier must be understood as relating to strikes external to the activity of the air carrier concerned, such as strikes by air traffic controllers or airport staff.
However, the Court states that, if such a strike originates from demands which only the public authorities can satisfy, it is capable of constituting an ‘extraordinary circumstance’ since it is beyond the air carrier’s actual control.
As regards the right of negotiation, the fact that an air carrier, because of a strike by members of its staff that is organised within a legal framework, is faced with the risk of having to pay the compensation due to passengers for flight cancellation does not compel it to accept, without discussion, the strikers’ demands in their entirety. The air carrier remains able to assert the undertaking’s interests, so as to reach a compromise that is satisfactory for all the social partners.
So far as concerns an air carrier’s freedom to conduct a business and right to property, the Court points out that these are not absolute rights and that the importance of the objective of consumer protection, including the protection of air passengers, may therefore justify even substantial negative economic consequences for certain economic operators.
Conclusion
The advocate general had argued the previous week that if strikes of flight crews organised by trade unions, cannot be considered as constituting an ‘extraordinary circumstance’, airlines are facing extremely important costs when negotiating with employees by virtue of the right to collective bargaining. This may then not only harm the airlines’ fundamental right of collective bargaining and freedom to conduct a business and the equality between social partners, it would also conflict with the aim of Regulation 261/2004 (reducing trouble and inconvenience to passengers) as in the long run the passengers may suffer adverse consequences from their rights being ‘exploited’ by certain movements.
The Opinion of the Advocate-General and the opposite decision of the Swedish Court of Justice show how it is important to clarify the passenger rights case law.