Air passenger rights: a staff strike is not an “extraordinary circumstance” to avoid compensation to passengers

Europe
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In its judgment delivered on 23 March 2021 in case C-28/20 Airhelp v. SAS, the Court of Justice of the EU has ruled on the notion of “extraordinary circumstance” within the meaning of Regulation n° 261/2004 concerning compensation to passengers, in particular in the event of cancellation or long delay of flight. The Court held that a strike did not constitute such a circumstance and that therefore the compensation of passengers as provided in the said Regulations applied in such a case.

The facts of this case date back to April 2019, when a SAS passenger had his flight from Malmö to Stockholm canceled due to a strike by SAS pilots (in Denmark, Sweden and Norway). The strike was part of the negotiations for a new collective agreement and was intended, among other things, to obtain a salary increase. The strike notice had been lodged, in accordance with Swedish law, one week before the start of the strike.

 

The passenger had ceded his possible right to compensation to Airhelp, an international company for the defense of the rights of air passengers, and the latter had then brought before the Swedish courts a request to obtain the compensation provided by Regulation n° 261/2004 on rights of air passengers, in the event of flight cancellation.

The airline SAS refused to grant this compensation considering that the strike of their pilots fell within the concept of “extraordinary circumstance” within the meaning of Article 5, paragraph 3 of Regulation n° 261/2004. This provision indeed specifies that if the air carrier proves that the cancellation results from extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, it is not obliged to pay compensation under the regulation.

SAS claimed that the strike fell within this provision because it was an event satisfying the conditions highlighted by the CJEU in its case law to benefit from the exemption, namely that the circumstance in question “is beyond the actual control of the air carrier” and that it is not “inherent in the normal exercise of an air carrier’s activity”. Conversely, Airhelp argued that a strike did not constitute such a circumstance allowing exemption from the payment of compensation since the strike had taken place within the framework of negotiations concerning the conclusion of a collective agreement, which is part of the ordinary course of an airline's business.

Following a request for interpretation submitted by the national judge seized in this case, the Court of Justice ruled on the question and found that a strike movement, carried out in compliance with national legislation, initiated by the staff of an air carrier and linked to claims, concerning the labour relations between the said carrier and its staff, that are most likely to be dealt with through management-labour dialogue within the company, does not fall under the concept of “extraordinary circumstance”, within the meaning of Regulation n° 261/2004.

The Court's reflection is based on two afore-mentioned cumulative case-law criteria , for the exemption provided for in Article 5 paragraph 3 of Regulation n° 261/2004:

  • The extraordinary circumstance must not be inherent in the normal exercise of the activity of an air carrier; and
  • It must be completely beyond the actual control of an air carrier.

The Court held, with regard to the first criterion, that the strike was an event inherent in the normal exercise of the activity of any employer, including an air carrier. Indeed, the Court recalled that the right to take collective action, in particular in the form of a strike, is a fundamental right laid down in the Charter of Fundamental Rights of the EU and that, therefore, action carried out within a legal framework against an air carrier with a view to obtaining in particular better salary conditions is an activity inherent in the normal management of its activities

Regarding the controllability of such union action for the air carrier, the Court ruled that the fact that the right to strike is laid down in the Charter of Fundamental Rights makes the launch of a strike by workers foreseeable for any employer, in particular when  notice is given. Consequently, an air carrier faced with a strike announced by lawful notice retains control over that event inasmuch as it has, in principle, the means to prepare in advance, and as the case may be, mitigate its consequences.

 

The Court also clarifies the scope of point 14 of the preamble to Regulation n° 261/2004, which states that: “obligations on operating air carriers should be limited or excluded in cases where an event has been caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Such circumstances may, in particular, occur in cases of […] strikes that affect the operation of an operating air carrier”. The notion of strike used in this paragraph does not refer to strikes “internal” to the air carrier but to strikes external to the activity of the latter, such as strikes by air traffic controllers or airport staff.

 

A nuance concerning the so-called “internal” strikes is however made by the Court. Indeed, a strike originating from demands which only can be satisfied by public authorities could constitute an “extraordinary circumstance”, in so far as it would in this case be beyond the effective control of the air carrier.

 

The Court also recalls that the clarification of the notion of extraordinary circumstance, by which this qualification is ruled out for strikes by the staff of an air carrier, does not force the latter to agree without negotiation to all of the strikers' demands. The air carrier remains in a position to assert the interests of the company, so as to reach a compromise satisfactory for all the social partners.

 

Finally, as regards the balance of interests between the freedom to conduct a business and the right to property of the air carrier on the one hand, and consumer protection on the other, the Court recalls that due to the importance of the latter's objective, consumer protection is likely to justify negative economic consequences, even considerable, for certain economic operators, thereby rejecting SAS's argument concerning the amount of compensation that should be disbursed in the event of a request from all passengers who had their flights canceled during the said strike which lasted no less than seven days.

 

It is interesting to note that the Court’s ruling runs counter to the findings of Advocate General Priit Pikamäe, who concluded that the strike by SAS staff met both of the Court’s case-law criteria.

 

This judgment supports the already abundant case-law of the Court on this subject and provides useful details for determining the exact scope of Regulation n° 261/2004.

 

Let us recall on this occasion that the European Commission published in 2016 interpretative guidelines relating to this Regulation aimed at consolidating the relevant European case law.