Fundamental Legal Principle
Hierarchy of Legal Sources – Why EU Law Beats Company Policy
Understanding the hierarchy of legal acts is crucial to comprehending why no company can effectively block an employee's right to compensation.
1. National Constitution
Supreme law of the land
2. European Union Law
EU Regulation 261/2004 – direct effect, takes precedence over national law
3. National Statutes
Employment law, aviation law
4. Implementing Regulations
Secondary legislation
5. Employment Contract
Individual employment terms
6. Company Policy/Handbook
Internal company rules
What Does "Direct Effect" of EU Regulation Mean?
EU Regulations (unlike Directives) have so-called direct effect(also called direct applicability). This means:
- Apply automatically in all EU member states
- Do not require implementation into national law
- Take precedence over conflicting national provisions
- Any citizen can invoke them directly
In practice this means:
As an employee on a business flight, you can invoke provisions of EU Regulation 261/2004 directly against the airline and against your employer. You don't need to find basis in national statute or employment contract.
Company Policy Requiring Compensation Return – Is It Valid?
"Employee agrees to transfer to the Employer all amounts received from the carrier as compensation for a flight paid for by the Employer."
1. Contradicts EU Law
Regulation 261/2004 grants the right to compensation to the passenger. An attempt to revoke this right through company policy is inadmissible.
2. Purpose of Compensation
Compensation has a personal character – it compensates for loss of time and inconvenience suffered by the traveling person. The employer did not suffer this inconvenience.
3. Principle of EU Law Supremacy
According to ECJ case law, national provisions (much less internal policies) cannot limit the effectiveness of EU law.
What Can and Cannot Your Employer Do?
- Request information about claim (for internal documentation)
- Ask about delay/cancellation circumstances (for process improvement)
- Settle additional business trip costs resulting from disruption
- File own claim for ticket refund (if airline failed to transport)
- Demand return of compensation received by employee
- Prohibit employee from filing claim
- Require transfer of power of attorney for claim
- Deduct compensation amount from salary
- Apply disciplinary sanctions for not returning money
Practical Scenarios – How to Respond?
Situation: You received €250 compensation for delayed business flight. HR sends email requesting transfer to company account.
Recommended response:
Politely but firmly decline, invoking European law:
You can attach a link to this article as educational material for HR.
Situation: Before business trip, you must sign statement committing to return any compensation to the company.
Recommended action:
- 1.You can sign – such statement is legally void (contradicts EU law)
- 2.You can refuse – invoking contradiction with European law
- 3.You can sign with reservation: "Signed subject to compliance with EU 261/2004"
Conclusion: Regardless of signature, such statement has no legal force. You are not bound by it.
Situation: Manager suggests that failure to return compensation may affect performance review or future business trips.
Recommended steps:
- 1. Document the situation (save/preserve correspondence)
- 2. Report to compliance/ethics department (if exists)
- 3. Consult with employment lawyer
- 4. Consider reporting to labor authorities
Situation: HR proposes splitting compensation: you keep half, transfer half to company.
Legal assessment: You have full right to entire amount. Accepting compromise is your free decision, but does not arise from any legal obligation.
If accepting compromise: Do so consciously, understanding this is voluntary gesture, not obligation. Don't create precedent for future cases.
Case Law and Legal Interpretations
The ECJ has repeatedly emphasized that:
- The purpose of Regulation 261/2004 is protection of passengers as the weaker party in relation to carrier
- The right to compensation has a personal and inalienable character
- Member states and private entities cannot limit the effectiveness of the regulation's provisions
Employment tribunals consistently recognize that:
- • EU law takes precedence over national employment law
- • Internal policies cannot limit rights under EU law
- • Employee is the party entitled to flight compensation
- • Deduction of compensation from salary is unlawful
Employee FAQs
Legally no. This is a personal matter between you and the airline. In practice, transparency may prevent future misunderstandings. You can inform HR about the claim without providing specific details.
This is unlawful deduction. You can demand immediate reimbursement. If company refuses, consult with lawyer and consider reporting to labor authorities and employment tribunal.
Company can change policy, but cannot effectively revoke rights under EU law. New policy with compensation return clause will be equally void as previous one.
This is your decision. You can voluntarily transfer money to employer. Remember however this is gesture of goodwill, not legal obligation. Don't create precedent for other employees or future cases.
If your business flight was delayed or cancelled, you cancheck your rights onlinein a few minutes. Regardless of outcome, remember: any compensation belongs to you, not the company.