Compensatory Damages for Unlawful Strike
Unlike some other European countries, Germany does not have a tradition of intensive labour disputes between unions and employers. Even though wages are still largely determined by collective bargaining agreements, labour unions in Germany are relatively reluctant to force employers into collective bargaining agreements by means of long-lasting strikes. However, there have been some severe strikes in recent years in Germany initiated by unions representing a relatively small group of key employees with tremendous bargaining power (e.g. in the air and rail traffic sector). Very recently, the Federal Labour Court (the court of last resort in labour-related disputes in Germany) has rendered a judgement on one of these strikes which has been highly welcomed by the employer community.
Violations against the "Duty to Keep the Peace"
Generally speaking, a labour union in Germany has the right to strike unless the strike violates the so-called Duty to Keep the Peace [Friedenspflicht] or is disproportional. A strike violates the Duty to Keep the Peace where it aims at a goal that is regulated by an effective collective bargaining agreement applying to the parties. Typically, strikes aim at more than just one goal, and often it is anything but obvious whether one of these goals violates the Duty to Keep the Peace. If so, the strike as a whole is tainted due to the so-called Scrambled-Eggs-Doctrine [Rühreitheorie]. And, as a consequence, it can be stopped by a restraining order. Moreover, where an unlawful strike causes financial damages on the employer’s side, the employer can claim for compensatory damages against the union. In the case the Federal Labour court had to decide on, the union in charge of air traffic control [Gewerkschaft der Flugsicherung] ("GdF") called a strike against the company operating Frankfurt International Airport (“FRAPORT”) aiming at a great deal of different goals, one of which was regulated by an effective collective bargaining agreement between the GdF and FRAPORT. This prohibited goal tainted the strike as a whole and made it unlawful. Even though FRAPORT could stop the strike by means of a restraining order quite quickly, the strike caused damages in the amount of EUR 5.17 million. Consequently, FRAPORT sued the labour union for compensatory damages. In court, the GdF argued that the strike would have taken place anyway for goals other than the prohibited one. Thus, the damages would have occurred nonetheless, which is why there was no liability, the union argued.
Compensation in Case the Strike Would Have Happened Anyway?
So, the issue the Federal Labour Court had to decide on was whether a labour union is obliged to pay compensation for damages caused by an unlawful strike in case the strike would have happened anyway for goals other than the one violating the Duty to Keep the Peace. The Court ruled against the union. It held that whether the union would have called a strike anyway for goals other than the prohibited one is not decisive. If so, it would have been a different strike but not the strike the Court had to decide on. The strike at hand, however, was unlawful due to the prohibited goal and it resulted in damages that the union was liable for.
This case demonstrates how crucial it is for an employer who is subject to a strike to carefully examine whether the strike aims at any goal that violates the Duty to Keep the Peace. If so, the employer can do more than just stop the strike by means of a restraining order and prevent more damages from happening. The employer can also sue the union for compensa-tory damages. By doing so, the employer can do more than just compensate for own financial losses. Such lawsuit can rather decrease the probability of the union going on strike again in the future. The union will have less money in its “war chest” for strike pay to its members if it must compensate the employer. Hence, it will probably be more reluctant to call a strike in the future.
If you have questions related to this topic please feel free to contact
Dr. Daniel Hund
(Lawyer, LL.M., Licensed Specialist for Labour Law)
Editor's note: This article has been released similarly in the "Labour Law Magazine" No. 2, 26 September 2016, p. 13 et seq.