Ryanair's Encounter with the Danish Labour Market Model
This summer, Ryanair lost the encounter with the Danish labour market model after having refused to negotiate a collective bargaining agreement on working and salary conditions for the crew members (pilots and cabin crew) based in Denmark. The Danish model provides Danish labour unions with extensive rights to initiate industrial actions in favour of the conclusion of a collective bargaining agreement - like for instance a blockade (with the purpose to prevent Ryanair from hiring organised labour while the principal dispute between Ryanair and the labour union is pending) and a sympathy action (with the purpose, in support of the principal dispute, to preclude Ryanair from accessory services like baggage handling, fuel supplies, etc.). The Danish model is based on the fact that working and salary conditions on the Danish labour market are determined by collective agreements concluded between the labour market parties.
Ryanair's refusal to negotiate a collective agreement resulted in a notice of dispute against Ryanair, the lawfulness of which Ryanair contested in the Danish Labour Court. However, the Labour Court ruled that the union has a legal right to give notice of a (principal) labour dispute aimed at Ryanair entering into a collective agreement.
However, the union had neglected to observe some formalities by not providing Ryanair with a list of names of the members comprised by the dispute. This resulted in the dispute actually being unlawful. Therefore, Ryanair received a new notice of dispute which would enter into force in the night of 17 July 2015. Due to the fact that a notice of secondary action requires, inter alia, that the principal dispute has been lawfully initiated, the notified secondary actions were equally unlawful. Apart from establishing this fact, the Labour Court did not take any further position on the notified secondary actions.
According to legal practice of the Labour Court, Danish labour unions have extensive rights to initiate industrial actions against an employer in support of collective bargaining demands. However, in two previous cases the Court has rejected the right to initiate a dispute for the reason that the work was performed for a foreign employer and that the part of the work carried out in Denmark was a natural and secondary element in correlated international railway respectively road traffic. Consequently, the unions' interest in entering into a collective agreement was not strong enough.
Apart from the fact that the Ryanair case involved air traffic, the case also differs from the previous cases by the notice of dispute being intended for employees who were not just passing through Denmark, but were attached to a fixed base in Denmark where their work started and ended.
Precisely these circumstances were decisive for the Court to recognize the union's right to submit a notice of dispute in support of collective bargaining demands.
For one thing, the ruling is based on the grounds that the union's limitation of the notice of dispute to a Danish base entails that the immediate effects of the dispute are limited to Denmark, which means that the lawfulness of the dispute is to be decided according to Danish law.
For another, the ruling established that the Danish location of the employees' base was decisive for the required current interest and strength of the union's demand for the conclusion of a collective agreement. However, in this respect the Court also takes into account that pursuant to the Chicago Convention on International Civil Aviation, the work performed while the aircraft is in a Danish airport/airspace is considered as work carried out in Danish territory. The importance of the base country for the current interest and strength of the dispute is also reflected by the Court emphasizing this fact against the opposite fact according to which the major part of the employees' total work is performed outside Danish territory.
Due to the cross-border aspects of the ruling, the Court weighed between the notice of dispute and its status as a fundamental right pursuant to EU law and the fundamental freedom rights under EU law, including the free exchange of services. Although the right to take industrial action constitutes a restriction in relation to the freedom rights, it does not mean that the notice of dispute is a violation of EU law. Again, the importance of the base being located in Denmark, giving the employees a connection with Denmark, is reflected in the grounds of the ruling, emphasizing, inter alia, the fact that there are compelling general reasons for the union to ensure decent working and salary conditions for work performed by its members in Denmark and to avoid social dumping.
The ruling contributes to a clarification of the question how to delimit the Danish trade unions' right to take industrial action in cases involving international transport. Among other things, the ruling is interesting due to the fact that the Court refers to the recent practice of the European Court of Human Rights regarding Article 11 of the Convention, which seems to give the member states room for a more extensive discretion in regard to weighing between the right to take industrial action and the free exchange of services.
Finally, it is noted that the Danish Labour Court's approval of the notice of dispute has resulted in Ryanair's subsequent shut-down of its bases in Denmark (Copenhagen and Billund).