Report: German Federal Labour Court orders compensation for illegal strike

Abstract

In its ruling of 26 July 2016, the German Federal Labour Court (Bundesarbeitsgericht, BAG) held1 that the Air Traffic Controllers Union (Gewerkschaft der Flugsicherung, GdF) has to pay FRAPORT AG high compensation (possibly euro 5 million) for the strike action it organised at Frankfurt Airport in February 2012. The exact amount of damages will now be determined by the Regional Labour Court of the State of Hesse (Landesarbeitsgericht Hessen, LAG). Contrary to the previous instances ruling in the principal proceedings, the BAG found the strike action to be illegal, as the obligation of the collective agreement to keep the industrial peace still applied to some of the union demands. The BAG did however dismiss the damage claims brought against the GdF in the same proceedings by third-party aviation companies for flights cancelled as a result of the collective action. In the previous instances, the Frankfurt/Main Labour Court (Arbeitsgericht Frankfurt am Main, ArbG) and the LAG had ruled that FRAPORT did not have any justified damage claims. Both previous instances were convinced that GdF would have undertaken the strike action at the same place, the same time, and with the same extent even without the ancillary demands violating its obligation to keep the industrial peace, so that the damage would also have occurred with a lawful alternative action by the GdF. Because of this lawful alternative action, GdF would therefore not be liable for the damages claimed by FRAPORT. In the principal proceedings, the previous instances had also dismissed the action insofar as it concerned the damage claims of thirdparty aviation companies, because – as the BAG afterwards confirmed in its final ruling – third parties may not claim damages from the trade union undertaking the strike, even if the strike was unlawful, as it did not constitute a direct intervention in their business activities. The BAG ruling of 26 July 2016, which has only been released as a press statement, constitutes another restriction of the unions’ right to collective action, insofar as it concerns the damage claims awarded to FRAPORT. According to the BAG press statement and contrary to the previous instances, the BAG did not uphold the principle of lawful alternative action, as it did not follow the GdF view that the same damages would have occurred in a strike action without any demands violating the obligation to keep the industrial peace2. The BAG decision is negative for the trade unions and illustrates the risk unions are exposed to in all their strikes. To enforce their bargaining claims and to exercise their right to free collective bargaining enshrined in Article 9 Section 3 of the German Constitution (Grundgesetz), trade unions depend on strike action. Even now, the German unions’ right to strike is subject to multiple restrictions starting with the rulings of the European Court of Justice (ECJ) in the cases of Viking/Laval3, on the employers’ option to be members of an employers’ association without being committed to a collective agreement (OT Membership)4, or the legitimacy of so-called ‘flash’ resignations/changes of membership to an OT membership5, or the requirement that a legitimate strike must have an objective which is suitable for regulation by collective agreement. Furthermore, the coverage of collective agreements has registered a downward trend for years; just short of one third of all companies in Germany are bound by collective agreements (West Germany: 31 percent; East Germany: 21 percent); these same companies employ close to 60 percent of all employees (East Germany: 49 percent)6. Further restrictions of the right to strike are therefore highly problematic. The BAG must be commended for confirming an earlier ruling of 2015 saying that third parties not involved in a strike action cannot claim damages from the striking trade union, as there is no relation of their intervention to the business of said third party. This means for the present case that there was no direct intervention in the business activities of the aviation companies suffering cancelled flights7. Background to the strike The BAG decision of July 2016 was based on the following events: the claimant company FRAPORT AG and GdF had concluded a bargaining agreement for the employees working in apron control and central air traffic...