Even two years after Air Berlin’s insolvency its liquidation is still occupying the courts with no prospect of an end in the near future. While the insolvency administrator’s claim for damages against the former shareholder Etihad in the amount of EUR 2 billion is currently before the Court of Appeal in London, the German labour courts are busy with the fallout from employment relationships. In a recent ruling, the Federal Labour Court (‘FLC’) had to decide on the compensation claims of former flight attendants. It confirmed the previous instances in which claims were dismissed.
After filing for bankruptcy in August 2017 and suspending flight operations on 27 October 2017, the airline’s insolvency administrator not only had to deal with almost EUR five billion in liabilities, but also terminate thousands of employment contracts. At the heyday of what was once Germany’s second-largest airline, Air Berlin employed over 8,000 people. At the time of writing, only just under 30 are still helping the insolvency administrator to wind up the company. The fact that such downsizing measures have not been achieved without friction is clear from the many court cases that have occupied the German labour courts in the wake of the Air Berlin insolvency. Now these have also reached the FLC. On three dates in January and February 2020, 17 proceedings alone are pending for decision in Erfurt. The first four proceedings were concluded with the decision of the First Senate of the FLC on 21 January 2020.
Background to the 21 January 2020 decision
The 21 January 2020 decision (1 AZR 149/19 and 1 AZR 295/19 among others, so far only available as a press release) dealt with a claim for compensation for the plaintiff flight attendants’ job loss under the collective agreement concluded with ver.di Personnel Representation (‘TVPV’).
For Air Berlin’s cabin staff, a Cabin Staff Committee was established on the basis of the TVPV, comparable to a works council for flight attendants. The TVPV provides for participation rights for the Staff Committee, modelled on the Works Constitution Act. According to its provisions, employees are to be paid compensation for their job loss if a planned change in operations is carried out without having previously attempted to negotiate a so-called ‘reconciliation of interests’ with the Staff Committee and they are dismissed as a result of the change in operations (s 83 paragraph 3 TVPV). A ‘reconciliation of interests’ is an agreement usually between the Works Council (here the Staff Committee due to the special regulations in the TVPV) and the employer on how and in what manner a planned change in operations will be implemented.
At the beginning of October 2017, Air Berlin informed the Cabin Staff Representation about the planned closure of business operations as of 31 January 2018. After negotiations on the ‘reconciliation of interests’ were unsuccessful, Air Berlin called the conciliation body. The conciliation body declared itself not competent on 10 January 2018. At the end of January 2018, the insolvency administrator dismissed the employees in the cabin division for operational reasons. In their legal actions, the plaintiffs, who had previously worked as flight attendants, demanded compensation for their job losses. They claimed that the change in operations (closure of flight operations) had already been implemented with the dismissal of the pilots at the end of November 2017; at that time, the ‘reconciliation of interests’ with the cabin staff had not yet been sufficiently attempted.
The Federal Labour Court’s reasoning
The Federal Labour Court was not convinced by this interpretation of the TVPV and, like the lower courts, dismissed the actions. It reached its decision (according to its press release), based on the scope of application of the TVPV.
It is true that s83 paragraph 3 TVPV sanctions a violation of the Staff Committee’s negotiation right with financial sanctions. However, this refers exclusively to cabin crew-related measures. This follows from a legal understanding of the Cabin Staff Committee’s right of negotiation, which is regulated by collective agreement. According to its scope of application, the TVPV only applies to cabin personnel. If the Staff Committee set up for cabin personnel could negotiate about a change of operations that would also affect cockpit personnel, this would contradict the (scope-related) effect of the norms of a collective bargaining agreement on questions of works constitution law (s4 paragraph 1 of the Collective Agreements Act).
In short, the Federal Labour Court states flight attendants are not pilots. Therefore, if pilots are dismissed, this does not mean that there is a change in operations for cabin crew, who are organised in a separate staff committee.
This interpretation of the TVPV is convincing. Only in this way can the responsibilities of the respective negotiating partners be clearly delineated from each other and contradictory, as well as unsystematic, overlaps be avoided. The decision is therefore to be welcomed and brings welcome legal certainty on the employer’s side.