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A striking decision? Industrial action ruled not extraordinary by European Court

24-April-2018
24-April-2018 11:09
in Aviation and Travel
by Christopher Loxton

The CJEU holds that compensation under Regulation 261/2004 is payable by carrier for delays or cancellations caused by its own employees’ wildcat strike

1. On the 17 April 2018, the Court of Justice of the European Union(“CJEU”) handed down judgment in the joined cases of Helga Krüsemann and Others v TUIfly GmbH (“Krüsemann”) [1,2].

2. The applicants in the proceedings all had bookings with TUIfly for flights provided by the carrier between 3 and 8 October 2016. All those flights were cancelled or subject to delays equal to or in excess of three hours upon arrival due to an exceptionally high number of absences on grounds of illness amongst TUIflystaff, following the carrier’s notification to its staff of company restructuring plans.

3. The CJEU noted that whilst absenteeism due to illnessa mong TUIflystaff was typically around 10% of the workforce,between 1 and 10 October 2016 that rate increased to between 34% to 89% in the case of cockpit crewstaff and of 24% to 62% in the case of cabin crewstaff.

4. Accordingly, from 3 October 2016 TUIfly fully abandoned its initial schedule offlights, while making sub-chartering arrangements with other air carriers and recalling staff members who were on leave. Despite these measures, however, over 50 flights between 3 and 6 October 2016 were cancelled and all flights departing from Germany were cancelled on 7 and 8 October 2016.

5. On the evening of 7 October 2016, TUIfly’s management informed its staff that an agreement had been reached with the staff representatives and thereafter the strike ended.

6. The European Court was therefore asked to rule on whether the situation between 1 October and 8 October 2016 could be classified as “extraordinary circumstances” within the meaning of Article 5(3) of Regulation (EC) No. 261/2004 (“the Regulation”), such that compensation provided for in Article 5(1)(c)(iii) and Article 7 of the Regulation was not payable.

The Court’s decision

7. After tackling a challenge to the admissibility of the references, the Court gave short shrift to the idea that the industrial action on the part of TUIfly’s staff amounted to extraordinary circumstances within the meaning of the Regulation.


8. Whilst noting that Recital 14 of the Regulation stated that extraordinary circumstances may occur ‘in cases of strikes that affect the operation of an operating air carrier’, the CJEU referred to it having previously held that the circumstances referred to in Recital 14 were ‘not necessarily and automatically grounds of exemption from the obligation to pay compensation’ (referring to Wallentin-Hermann, C-549/07, paragraph 22), consequently, it was necessary ‘to assess, on a case by case basis, if it fulfils the two cumulative conditions’ as confirmed in Pešková and Peška (C-315/15), namely whether the events in question were, by their nature or origin, not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control [3].

9. Having repeated the well-established principle that, as a derogation from a regulation offering a high level of protection for passengers, Article 5(3) must be interpreted strictly, the CJEU observed that the spontaneous nature of the industrial strike – a “wildcat” strike [4] – had its origins in the carrier’s ‘surprise announcement of a corporate restructuring process’ [5].

10. The CJEU took the view that such 'restructuring and reorganisation of undertakings are part of the normal management of those entities' [6] and that carriers ‘as a matter of course, when carrying out of their activity, face disagreements or conflicts with all or part of their members of staff’ [7]. Accordingly, such events were inherent in the normal exercise of TUIfly's activities and were within the actual control of the carrier because the strike ceased following an agreement that it concluded with staff representatives [8].

What impact?

11. Prior to this decision it was commonly considered that wildcat strikes, even amongst a carrier’s own workforce, could be regarded as “extraordinary circumstances”. Now it is clear that only industrial action by third parties, caused as a result of actions also taken by third parties, might be capable of falling within the example found in Recital 14. However, as always, much will depend on whether a carrier is able to show that such events are not inherent in the exercise of its normal activities and were beyond its actual control, and that no reasonable measures taken by the carrier could have avoided the strike or the cancellation/delays caused.

 

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Christopher Loxton © cl@whitestonechambers.com

 

[1] Joined Cases C-195/17, C-197/17 to C-203/17, C-226/17, C-228/17, C-254/17, C-274/17, C-275/17, C-278/17 to C-286/17 and C-290/17 to C-292/17.

[2] http://eur-lex.europa.eu/legalcontent/EN/TXT/?qid=1395932669976&uri=CELEX:62017CJ0195 

[3] Paragraph 32 of the judgment. 

[4] The phrase having been adopted by the CJEU in its judgment.

[5] Paragraph 38.

[6] Paragraph 40. 

[7] Paragraph 41.

[8] Paragraph 44.