August 5, 2021

Protected species

Legal expert Joanna Kolatsis discusses the intricacies of packaged travel legislation

While duty of care is an ongoing discussion in the business  travel sector, there is another issue that perhaps doesn’t get the attention it warrants.

The exemption of business travel arrangements from The Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs) deserves time in the spotlight.

PTRs, recently revived for the modern age, are primarily aimed at the leisure travel sector and include an exemption for business travellers. But it is important to clarify the basis of the exemption before we look into potential areas of responsibility. 

The EU Package Travel Directive 2015 provided an exemption for business travel arrangements where such arrangements  are made on the basis of a ‘general agreement’ (GA).  However, the Directive  also recognised that  small businesses and independent business travellers may still need PTR protection.

Once implemented in the UK, the PTRs confirmed the exemption and defined a GA as “an agreement…concluded between a trader and another person… for a trade, business, craft or profession, for the purpose of booking travel arrangements in connection with that trade, business, craft or profession”.

The exemption for business travel within the PTRs only takes effect if a GA is in place. It is not an automatic exemption as is frequently and incorrectly assumed. 

When TMCs make arrangements under a GA, they are usually acting as agents for the suppliers of the services. In the event of a problem, most TMCs will do their utmost to assist their customers, so it is likely that businesses and travellers may not fully understand the extent of what this means for them in practice.

As a rule, TMCs will assist in times of disruption and liaise with relevant suppliers concerned. However, the affected customer will have to fund any alternative costs.

For example, if the TMC books flights and accommodation and the airline goes out of business prior to travel, the traveller will not be entitled to a refund for the flight. A large corporate client may have the resource to cover this but a small business or individual traveller may not (which is what the PTRs envisioned). 

Businesses are under increasing pressure to ensure they provide a duty of care to their corporate travellers. Much of this duty is subcontracted to the TMCs under the GA who engage with risk/security management professionals, health and safety providers and business etiquette advisers in order to provide a holistic travel solution.

But the role of the TMC doesn’t change; the brunt of the responsibility lies with the corporate entity itself. The only time this may differ is in the event of the TMC’s negligence in arranging the services. If a GA is not in place, these types of liabilities may garner the protection of the PTRs for smaller entities and independent corporate travellers.

The issue of extended business trips to include leisure arrangements also gives rise to a number of grey areas.

While the corporate entity will ultimately be responsible for their travellers while on business, who is responsible if something goes wrong during leisure time? What happens if the traveller is joined by family? Do these arrangements fall outside the scope of the GA? Will they be covered under the PTRs?

These are all issues which the business should consider when agreeing terms with their chosen TMC, particularly if the intention is also to remain outside the scope of the PTRs.

It is imperative that businesses clearly define the role of their TMC with regards to travellers, the extent of the TMC’s duties, and their ability to provide assistance in time of need.

Joanna Kolatsis is the founding Director of Themis Advisory, a business affairs and strategic advisory consultancy. She has over 20 years’ experience providing legal services to the travel and aviation industries.