The China Airlines (CAL) flight attendants’ strike has been resolved and the rights and interests of CAL flight attendants have been guaranteed, which is a good thing.
However, responsibility for the NT$300 million (US$9.22 million) in losses that accumulated as a result of the strike should not be borne by the flight attendants, nor should it be borne by the public.
Instead, in the spirit of corporate governance, these losses should be borne by the top CAL decisionmakers who actions led to the strike in the first place.
After the airline has compensated travel agencies and travelers for their losses, claims for compensation should be directed to the chairman and the former president and of the airline in accordance with Article 23 of the Company Act (公司法).
CAL chairman Ho Nuan-hsuan (何煖軒) said that the strike resulted in losses of about NT$200 million in a single day.
It has been estimated that one day of compensation for travelers would cost about NT$100 million. About half of the airline’s NT$300 million loss is likely to be paid for by the public.
An examination of the airline’s ownership structure shows that the China Aviation Development Foundation, a subsidiary of the Ministry of Transportation and Communications, owns 34 percent of the company, which means that together with the Executive Yuan’s National Development Fund and Chunghwa Telecom Co, almost 50 percent of CAL shares are publicly held, meaning that about NT$150 million of the losses caused by the strike are likely to be borne by taxpayers.
According to Article 23 of the Company Act: “The responsible person of a company shall have the loyalty and shall exercise the due care of a good administrator in conducting the business operations of the company; and if he/she has acted contrary to this provision, shall be liable for the damages to be sustained by the company there-from.”
The airline’s top decisionmakers — according to Article 8 of the act, the term “responsible persons” includes the company’s managerial officer and directors — did not consider the rights and interests of the company’s flight attendants, which is what led to the strike.
Executive Yuan officials have said that the relevant authorities worked actively to handle the strike, but that former CAL president Chang Yu-hern (張有恒) was unwilling to cooperate and that he even refused to take a telephone call from Minister of Transportation and Communications Hochen Tan (賀陳旦), which caused losses to increase further.
This is sufficient grounds for saying that the people in charge of the company did not fulfill their duties and therefore should be held liable for the resulting damages.
Tourism industry associations, travel agencies and travelers are also demanding that the airline pay for the damages incurred.
Once the scope of the losses caused by the strike has been assessed, demands should be directed toward the people running the company — who were responsible for causing the strike and the resulting losses — that they pay compensation and meet the requirements in the Company Act that the people running the company “shall have the loyalty and shall exercise the due care of a good administrator in conducting the business operations of the company.”
The top CAL officials whose actions led to the strike, not the public, should be held liable for the losses caused by the strike.
Huang Di-ying is a lawyer.
Translated by Perry Svensson
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