Foreseeability and controllability of strikes - CJEU in Airhelp (C-28/20)

On 23 March 2021 the CJEU issued its judgment in the case Airhelp (C-28/20), interpreting provisions of Regulation 261/2004 on air passenger rights. Specifically, this judgment confirms that in most cases the airlines will not be able to invoke strikes (industrial actions) as an extraordinary circumstance that would release them from their obligation to pay compensation to passengers of delayed or cancelled flights under Article 5 Regulation 261/2004.

This case pertained to one of many flights cancelled due to a strike of SAS pilots, which strike took place between 26 April 2019 and lasted until 2 May 2019, with more than 4000 flights having been cancelled. The strike was part of the negotiations of a new collective agreements between the pilots' trade unions and SAS. The airline considered this to be an extraordinary circumstance, i.e. a situation not falling within the normal exercise of their activity, which is the provision of air services. Arguments raised by the airlines relied on the rare occurrence of strikes in Sweden, unusual coordination between 4 trade unions to hold a simultaneous strike, which led to one of the biggest strikes ever recorded in the air transport industry (para 14). The strike was lawful, thus employees could not be ordered to return to work. Due to its scale, SAS could not reorganise its activity, either.

The CJEU reminds that the right to take collective action is one of the fundamental rights (Article 28 of the Charter), through which workers and employers may conduct collective bargaining of their working conditions, and, therefore, strikes should be seen as inherent in the normal exercise of the activity of airlines (paras 27-29). This follows the previous judgment in the case Krüsemann (see our previous post Joined cases...). Further, this strike was foreseeable, both long term, due to the fact that the previous collective agreement was terminated, and short term, after a notice was served. And if a strike is foreseeable, airlines could have taken some measures to alleviate its serious consequences, retaining some control (paras 34-35). It is irrelevant in this assessment whether the pilots' demands were reasonable or proportionate (para 38). National courts should interpret Recital 14 Regulation 261/2004, mentioning strikes as an example of an extraordinary circumstance, as requiring that a strike is external to the activity of the air carrier concerned, e.g. strike of air traffic control (para 42). If the staff of the air carrier starts a strike, this could only be classified as an extraordinary circumstance, if their demands could only be met by a public authority and not by air carriers (para 45). The last point made refers to the fact that air carriers may be expected to suffer even 'substantial negative economic consequences' when protecting consumer rights (paras 47-50), and that this should not be perceived as putting them in a weaker bargaining position with trade unions.

This last point of the judgment does not ring true, considering that any economic assessment made by the airlines as to the reasonableness of the employees' demands will need to account for the negative financial consequences to the airline of not meeting their demands. This will now undoubtedly include calculation of compensations that need to be paid out to passengers of cancelled flights. Ironically, whilst asserting that airlines retain some control over strikes, the CJEU seems to be shifting some of that control towards trade unions with this judgment.